Lifestyle creep. When we make more money, we spend more money, and we're VERY good at coming up with non-essentials on which we waste our money. Don't buy the house that the mortgage company says you can afford. Look for a house that is HALF that amount. "I've been approved for $350,000!" That's great! Now, look for a house in the $175,000 range. Smaller, more affordable housing needs to make a comeback. Builders only make houses that will sell, and those houses are driven by what the banks allow people to borrow. Not a lot of people are interested in a new house under 1500 sq/ft these days, so builders don't construct smaller houses. Don't go into debt spending money you don't have to buy stuff you don't need to impress people you don't like.

@BDUBB24

Күн бұрын

I agree, we had a house budget before we ever went to the bank. We didn’t even ask the question, “how much do we qualify for” because that number would sound insane to us. Less than 2000sq ft home, just the two of us, it’s more than enough. Have to keep the Wants/Needs in check.

@9804Dracon

Күн бұрын

When my wife and I purchased our home we decided to price it based which one of us had the lowest income in case the higher income lost their job for an extended period of time. We ended up purchasing a bit higher than we wanted due to just how competitive the market was but still well within our comfort level. I understand many areas you can not do that as the average house is crazy expensive, I am lucky that the Midwest is very affordable.

@SpicyKimchi-

Күн бұрын

Our house is 1900 sqft, but we have a beautiful yard & sufficient lot size for privacy. New constructions in my area are over 2300 sqft, sacrificing lot size for living sqft. No thanks, it’s just two of us with 3 cats, I do not want to pay the utilities to support a bigger house, nor do I want to clean it. 😅

@mikezerker6925

Күн бұрын

Dave Ramsey has entered the chat 😂

@Lazirus951

3 сағат бұрын

I agree, but unfortunately in some areas affordable housing simply does not exist. $350,000 is the entry-level price. As long as people are buying up those homes (which they are), the problem will persist. At this point I think it will take another sub-prime mortgage crisis or something similar.

My wife and I are empty nesters about 5 years from retirement. Our combined annual income is $210k about evenly split between the two of us. We live in a Midwest suburb and have 3 years left on the house mortgage. No other debt. We have a 6 month emergency fund and put 20% toward retirement. We live comfortably but not extravagantly. We own modest vehicles and keep them till the wheels fall off. We lived very frugally when the kids were young and money was tight with much higher expenses. My advice is to develop a detailed budget and control where your money goes. If you are married combine your income and regularly agree on your budget priorities and goals. We have monthly budget meetings to plan for upcoming expenses such as lawn care, vacations, Medical procedures, etc. Don’t carry credit card balances and buy newer used vehicles. We buy most of our clothes at thrift stores such as savers. I regularly find new shirts and pants that were overstocks at prices 70% below retail. Eat at home. We make up meals in advance and limit eating out to 3 or 4 times a month. When we eat out we usually split an entree and add an extra side. Have a plan and stick to it.

Great Video! Thanks for putting it out there. What you said about vehicles is spot on and I wish that more people would realize that this is what keeps you poor. I was speaking with a co-worker of mine a few weeks ago and we started talking about retirement plans. We have both been with the same company for almost 25 years now. I asked her if she had been taking advantage of the company offered 401K plan and she stated that she does not contribute at all and really never has. I asked why and she said that she just cannot afford it. However, I did point out to her that she can afford to "purchase" a new vehicle every 3 years, which she has done since I have known her.

It so, so widely depends. My wife and I spend ~$100k a year (honestly, quite a bit less on any given month, but accounting for major house repairs/car purchases/large medical hits) FIRE-retired. But, $100k living in the midwest with a paid-off house, structured so income tax is like $1500 a year (state and fed combined!) is all entirely unlike the lifestyle of someone *making* $100k W-2 income, paying 1/3 to their mortgage, 7.65% to FICA payroll, ~15% to income taxes, etc. We're probably closer to the spending power of someone making a nominal $200k if not more.

Love the outtakes at the end! 😂🤣😍

I would argue that today's "middle class" has priced themselves out of what once was the middle class. In the 1970s my dad was a scientist/professor at a California university. We had a mortgage and a car loan. Credit cards were for the wealthy. We had a small black and white tv with an antenna on the roof. My mom sewed my sisters clothes and repaired mine. We lived in a middle class neighborhood, and by all accounts at the time, were a middle class family. Like my friends' families and neighbors, we rarely went out to dinner, and it was usually for pizza. We had an 8' X10' camp trailer and camped a lot each summer. Today I see young families driving $50,000 cars (often two cars). The children all have $1,200 Apple iPhones. The camp trailers are now 40' behemoth RVs that cost $140,000. Families spend more on eating out each month than my parents' monthly mortgage payment. Sure inflation has raised the costs of living, but today's families are all trying to live like the rich people. I have a masters degree, own my 4X4 diesel truck, side by side, motorcycle, frontend loader, sawmill and three timber properties in two states. Everything is paid for. I live on roughly $1,150 per month. I do have a credit card, one, and live off the card (food, fuel, Amazon, etc.), and it is paid off in full each month. Even including property taxes, I live on about $18,000 a year. Today's families seem to have lost the term, "live within your means."

@williamandersen1367

Күн бұрын

Very well put! My experience is quite similar..

Ha! My wife and I live quite well on about $75k/year in upstate South Carolina. We drive older vehicles that are both reliable and paid off, our 3 bed 2 bath house cost $155k in fine condition, and we don’t have cable or any other major subscription services. Amazon Prime plus the occasional added subscription on there so we can watch a specific show is quite enough.

@General8675

Күн бұрын

When did you buy your house though? Also, sure, you may be able to get that price in a rural area of SC, but how is your city services? School system? Like she said in the video, child care is huge.

@expensivefreedom

Күн бұрын

@@General8675 we bought in October 2022 and so far we’ve had zero complaints about any city services other than electric reliability. We lose power for a couple hours once a month on average. It’s annoying, but totally livable. School system is roughly 7 out of 10. Our oldest turns 2 this month, so school isn’t really a concern for a couple years except maybe for house resale value. We pay $500/month at a really good place for our two kids’ daycare in the meantime. For this, it’s really important to use your personal network a bit. Ask a few local stay at home moms if they’d be interested in watching your kids and see if you can work out a deal with them. Oftentimes it’s not hard to work out a deal that’s awesome for both sides and your kids will get better treatment than at typical childcare facilities.

@Neerdowellofyesteryear

Күн бұрын

​@@General8675not if you have a stay at home parent. If you stay home, you save 20-25K a year.

@williamandersen1367

Күн бұрын

Well put! A lot of us live quite comfortable on less than 100K

@expensivefreedom

Күн бұрын

@@General8675 we bought in fall of 2022. Our oldest child turns 2 at the end of this month, so school quality (about 7/10 rated) is more of a resale value question than an actually practical concern for us at this point. City services are pretty good except the electric does go out occasionally for a few hours. Annoying, but tolerable. Childcare costs us about $500/month thanks to a deal we worked out with a family we know. The wife is a stay at home mom and their kids love our kids, so we help their budget and our kids have a blast together. It’s genuinely worth looking into deals like that if you possibly can.. Church is often a great place to find them. Definitely get to know the family before trusting them with your kids though. We’ve known this family for over a decade.

If most people would buy a modest home, modest car they could live on 1 income. One person could stay at home with the kids and save on child care. Too many people want to live like Kings but can’t afford it. Live below your means. And move out of CA.

I retired last year at age 64 on a pension and IRAs to tap if I run short. I do NOT yet draw SS. I am waiting till 67 to make sure my also retired wife has the best benefits if I pass on. We have a paid for house but seven insurances take a toll. Considering canceling term life insurance as we have no kids and it is $580 per quarter for a $200k payout. We bring in maybe $60k a year as a couple and so far are making it till SS kicks in. We already took two major road trips and the credit cards are at zero till we load them up again with hotel stays and gasoline. It's a routine to run up $2,500 a month on the card then pay it to zero when the monthly pension comes in. If only to avoid loading up the card again :( We feel middle class even with only $60k and hopefully getting a break on taxes this year as we make less.

@General8675

Күн бұрын

How much is in those IRAs though? Also, if you die, what costs do you need to cover? That will determine whether you want that term life insurance.

@WheresWaldo05

Күн бұрын

You may be both die at 70. Any smart financial person will tell you to take the SS now cause you may not get it at all, or may get it for a short time.

@sakurabahfan

Күн бұрын

That seems high for life insurance, or is that the average?

@leveragedpromise1

Күн бұрын

@@sakurabahfan It was not that high till I turned 65. Its a $100 higher now. Granted the $580 covers 1/4th of the year, or $2,320 for a year. If I live 30 years, I will pay in $70,000 but they will raise the price the older I get. If I live far less than 30 years, I might keep it as I saw the other day, the median mortality in the USA is now under age 70.

@Zeldasmojo

Күн бұрын

This is how I use my credit card. I load it up on a trip but pay the balance down to zero every month.

Erin, continued success with your platform...I have followed your videos for about a year now and your graphics, organization, and flow of information flow better and better each month, and the usability of your financial and life information always deliver. Best...

@ErinTalksMoney

4 сағат бұрын

Thank you so much! 😊

Great information Erin, the first step is to lay out a budget. It sounds easy but I can't tell you how many times I have said this to my kids. (Well they are not kids anymore) I feel lucky that my wife stopped working in 1997 when we had our 2nd of 3 kids, she returned to work in 2006. It just was easier back then. House payment. 1,225.00, property taxes 35% of what it is now and my 100K was more than enough to pay the bills and save 20%. It definitely takes a team effort these days to afford a house and save for the future.

Living in a cheap area is a huge boon. I've been feeling like we're well into the middle class since we hit about $80K a year, up to about $110K a year now. We got really lucky with the interest rates when we bought our most recent home, at less than 3%.

Awesome stuff. Love the endings. It made me smile and that is much needed.

Great video. I’m retired, with adult kids and grands. They make a good income in HCL areas, but they don’t have room for extras. I’d rather them save for their retirement and then plan a few fun trips with the grands. Braces, musical instruments, now I am saving for family clunker cars. Your video says I am on the right track. The “extras” are tough - even with a good income.

I consider the ability to go on a family vacation domestically for around a week every year or two without going into debt as a marker of middle class status. The classic American middle class family vacation is going to Disneyland or Disney World. The cost to do this has gone up dramatically over the years so that fits with the increased income requirement to be in the middle class shown by the calculators in the video. I consider the ability to go on similar family vacations internationally (excluding neighboring countries like Canada or Mexico) as a marker of upper middle class status.

@WheresWaldo05

Күн бұрын

Opinions are subjective

@Playingwithproxies

Күн бұрын

Never been to Disney plenty of better things to do for 1/10th the cost. Visit any other theme park for a single day and you’d have a better time than a week at Disney 😂

@JoeSoCal2303

Күн бұрын

Disney is great, but it's also one of the most expensive vacations you can pay for. The tickets, the food and drink, transportation to the parks (or worse pay the price to stay at the parks), fast pass, etc. A much more attainable vacation for people is to see if people can afford to fly to a place and go on a beach vacation. Far more common on a yearly basis (who wants to go to Disney every year, we're not all children) and going to the beach is a normal yet far cheaper vacation.

I make 110k definitely comfortably fit into the middle class on a single income with 3 kids. You do have to live in the right location but it’s not this hard to get by.

This is incredible - we are Literally median middle class 😂 but we actually feel like we're doing well because we're in a MCOL (are there any LCOLs anymore??)

Should clarify this is $100K HHI. $100K does support individual middle class.

Depends on where you live!

It also depends on what city and state you live in as well I live pretty good as a single male on $36,000 a year the pew said I’m in the middle class I live way down in the south as well unfortunately these sites like pew and the ones you point out other important things like is your house paid off and how much in investments assets do you have to me that you be included

Hi Erin. Thanks for another great video providing a very good discussion and presentation of interesting facts. I will definitely take a look at those two calculators and give them a test drive. Keep up the great content. Larry, Central Valley, Ca.

if you are retired, how do you know if you, a couple, are middle-middle class?

Hi Erin !! Any chance you would start to create a high level of investment videos ?

My family afforded a middle class lifestyle in only my dad's income. But they lived simply and didn't send us children to daycare. But that was also 20 to 30 years ago and prices weren't as inflated back then

I think the middle class is beyond numbers but as you alluded to where financial security should be the metric. However, I will say that the government, banks, car lans, mortgages, and students uses the government’s definition of household members and monetary income. Thanks for this video Erin! Rhode Island.. thats only 20min away from me. We should form a KZread content creation group in this area. 😊

Realistically and this is hard to hear for a lot of people, but if you cannot save close to 30% or higher of your income you are going to struggle.

@JoeSoCal2303

Күн бұрын

I dont think that's realistic at all. Maybe if you don't start investing until your 40, then 30% is the number. But someone who invests 30% from age 21, can probably retire by 50. If you're saving 30% and 30% goes to taxes then you're only living on 40%. If you can save 30% and live on 40% you'll retire in no time. Saving 15-25% depending on how late you start saving should be adequate for most people. But the later you start the higher your investing rate needs to be.

Love your videos Erin! Are the incomes shared here net or gross? Saving 20% of a $100,000 income is not $20,000 but more like $16,600 post federal tax (and not including state and other taxes) - unless of course it’s pretax savings like a 401-k but not everyone has access to one. And car payments and child care expenses are definitely post-tax. Taxes make a big difference in net income. I understand though if you’ve decided to use round numbers to keep the analysis easy.

Really interesting data to consider! Hope you and your fam are doing well Erin!

It is a matter of lifestyle. A lot of people make under 100K and live quite well.

@davidbrooks8809

3 сағат бұрын

I'm single 53/M...Toledo Ohio..401k..IRA..HSA..bring home 60k.. debt free plus a Robin Hood account I rent and I love my life😊

Depends where you live for sure.

After daycare, if you still have 2 working adults in the family, comes after school care. For us, while it was less costly than daycare, after school care is still a big expense. Those expenses went away around middle school and I had more money for a brief period of time. Kids get expensive again in high school due to extracurricular activities, drivers ed, driving, and just being more brand conscious. They start wanting clothes that are expensive.

$100,000 a year doesn’t buy what used to be an upper middle class lifestyle. People simply don’t want to bother with simple chores like cooking, cleaning, fixing up small personal items and things in the house. People want lavish vacations, always new clothes, expensive top end items and new cars. People don’t really budget well and don’t save for purchases to avoid paying interest.

I’m living paycheck to paycheck… my take home is 6k a month, 4K automatically gets transferred to a HYSA and investment account and I live on 2k per month! That way I can be disciplined with my budget and keep my spending within my self-imposed 2k limit.

Middle class is just the area where you worry every day if you are going to move to the upper level or fail miserably and fall into the lower.

Much of Europe has very low-cost or even free childcare, paid for by taxes. If you have kids, try to move to Germany or Sweden, because life is designed for families there. In NJ, a good middle-class lifestyle is probably a household income of around 250-300k

@Neerdowellofyesteryear

Күн бұрын

NJ is a high cost state. I'll take my low cost state.

@WoJackHorseman24

Күн бұрын

@@Neerdowellofyesteryear Sometimes you get what you pay for

I'm 57, divorced, kids gone, live alone, and make 170k/year in Nebraska. I'm not rich, but I know I'm in a good position financially. It's hard out there for a lot of people and I feel blessed to not have to struggle with having enough money. I do miss the days when I was broke raising a family though! lol

@cisium1184

Күн бұрын

I'm 57 and make anywhere from 30K to 60K a year as a self-employed attorney and I easily meet all those middle-class indicia. I've never made more than 88K in a year in my life. I have everything I want - because I've learned to stop wanting everything. I live in an affluent part of Atlanta city proper and I see consumerism up close every day; people buy a lot of crap they don't really need, and buy far more of the things they do need (housing) than they actually need.

@RBzee112

Күн бұрын

I'm 54, no kids, and make 120k/year in Brooklyn. 170k in Nebraska is probably like 250k in NY. I don't know how people starting out today can make it and still save for retirement.

@avengement89

Күн бұрын

@@cisium1184so you work part time?

@ibmtpx24

Күн бұрын

Age 48 making 200k/yr in RI. Never felt rich. Used cars only and visit dollar stores and Walmart most of the weekends. I think money is the freedom of choices. And the only way to get there is to keep expensive choices away from life before retirement.

@tb1951

Күн бұрын

What do you do for work?

50/30/20 Needs/taxes/unexpected needs

So I am a single mom, 2 kids. Single income in a suburb of a big city. How much would I need to earn then? $150,000. Their dad does pay for some things. He pays me child support so I’m including that as my income. Would it be $150,000? That’s impossible for m. I make $40,000 but that’s part time hours. 25 hours a week. And $25,000 child support.

You have an inordinate number of assumptions. Lifestyle has everything to do with the analysis of needs and wants and the discipline to live inside of one’s means. I see colleagues and friends all day every day who will never afford a 350 K home yet they’re living in a 400 K home; house poor; the same people are taking weekend getaways two or three times a year and family vacations in the summer. They can’t afford it, and yet they do it anyway. Debt alert! Many of these same people eat out as though they make three times their actual income. Eat at home! They buy new phones every year, the air condition their homes at 68° in the summer. They have their kids in every ridiculous activity to compensate for the fact that they don’t have the discipline to spend actual time with them. The list goes on and on and on. If you can’t live in an area, move. If you can’t afford childcare, figure out birth control. If you can’t afford the mortgage for a 350 K home, rent a basement apartment somewhere. Here’s the problem. Most people are lazy and undisciplined with their hands out expecting everybody else to empathize with their foolishness. I raised two children with stay at home mother as a wife only a single income, teacher salary in a right to work state, we lived debt-free, still do. We drive older vehicles, we own our home, and we still live below our means today. The middle class hasn’t gone anywhere, but the discipline quotient is antiquated for millennials.

Our wages stay flat but corporate profit all time high, inflation all time high, no one can afford to buy home especially middle class and day care expenses. They build economy to make sure average person can have low wage.

Depends on where and how you live. Our family of four spends $27-$30k a year on basic living in our low cost state. Everything else is invested.

I’m so glad someone is saying being finished with daycare costs will make a big difference. Everyone tries to tell me oh just wait, you’ll spend just as much. I find that hard to believe! We already do extracurricular activities. I can’t imagine having to spend $1400 per kid once daycare is done. We also shouldn’t need after care which we’re lucky for. I work from home mostly so we should be able to manage. I can’t wait to see that payment disappear!

@jessjess1449

Күн бұрын

My kids are driving me crazy right now and I am desperately looking for camp open spots. Two months to go till school starts.

A couple can have a very fulfilling and complete life without children. And we know many couples whose children have derailed their finances or happiness or both.

@greggpurviance7252

Күн бұрын

Says no one in their 70's with no kids & grandkids

Wait for markets to equilibrate and sub 100k will be enough.

Love the bloopers

Thank you for the great info! I hope this inflation calms down, and thank god I have my mom to help watch my son. Child care would be brutal.

@williamandersen1367

Күн бұрын

Latest inflation is 2.6%.. so already down quite a bit. This means prices going up slowly, NOT prices going back down.

@joe62845

23 сағат бұрын

@@williamandersen1367 It went back up in June to 3.2, but yeah sucks that prices wont go back down. We need something to deflate prices, but that's not great either from what I've seen and heard from how other countries have it.

A lot of well made points. This Millennial knows a thing or two !

I don't even make 50k let alone 100k I think things are relative I don't have kids and 100k would be a lot I also don't have a car payment or live in a high cost area

Kid off formula - pay raise. Kid out of diapers - pay raise. Kid can access sports in school vs private teams - pay raise.

According to the MIT calculator I'm doing super well 😂

Child care cost seriously needs to be addressed

@missgui4400

Күн бұрын

Seriously. The $3500 childcare tax credit isn’t enough. The government should cover all the cost because our children are the future.

@Neerdowellofyesteryear

Күн бұрын

Just stay home. You save those childcare costs.

@ericnewman6523

Күн бұрын

@@Neerdowellofyesteryear that’s not a solution

@Neerdowellofyesteryear

Күн бұрын

@@ericnewman6523 yeah it is. Having a parent stay home with the kids saves 20K-25k a year. Not to mention why pay someone to replace you or to do your job? They are YOUR kids. I stay home with mine. So all this that you guys complain about not being able to afford, we do just fine. It's not as bad as the media says.

@ericnewman6523

Күн бұрын

@@Neerdowellofyesteryear you sound like a duck quack quack!

*Household income

I don’t even know what middle class is anymore.

@rayzerot

2 күн бұрын

These days it seems like people consider it "being able to stay out of debt"

@darex0827

2 күн бұрын

​@@rayzerotpeople make 500k/yr and still end up in debt.

@nwj03a

Күн бұрын

@darex Nobody does that unless they are a moron. Outside of mortgages, which don’t really count in debt calculations, or gaming the system for tax reasons. 500k? Now if you said 200k, sure, but again… morons. 500k and you can live very comfortably literally anywhere on the planet. That’s 40k a month.

@mikesurel5040

Күн бұрын

​@@nwj03a I think you underestimate the number of morons out there. I may be cynical.

@Neerdowellofyesteryear

Күн бұрын

It's state to state. Living in places like CA or NY, 100k salary is nothing. That is the equivalent to making less than 50k a year because the state is so expensive. Middle class in my state is 45-70k a year because we are low cost meaning everything is cheaper here. Cheaper insurance, homes, food, bills, etc. Our money goes further. My husband makes six figures we are a one income family of 5.

I earn >$300K part time working remotely. I live here in the Philippines and spend $1500 a month on living and budget an additional $1500 for domestic staycations and luxury international trips every 1-2 months. One month of working is enough to fund a year of my lifestyle here. I dont budget, nor save money. Never believed in the concept.

One can save more still on transportation with a bike(acoustic or electric) and, if available, public transit. Electric bikes in particular increase speed and range over an acoustic bike, and all around cheaper compared to a used car. I couple a bike with public transit and it cuts my usage of my car to generally once a week and I often only spend about $35 in gas, and put less than 1500 miles a month extending how often it needs maintenance.

*Amazing video, you work for 40yrs to have $1M in your retirement, meanwhile some people are putting just $10K into trading from just few months ago and now they are multimillionaires*

@Tonykechel

Күн бұрын

Waking up every 14th of each month to $210,000 it’s a blessing to I and my family… Big gratitude to Andrew Stella 🙌

@HelenCynthia-xf8tp

Күн бұрын

Hello , I am very interested. As you know, there are tons of investments out there and without solid knowledge, I can't decide what is best. Can you explain further how you invest and earn?

@Carsonmaki

Күн бұрын

Same, I operate a wide- range of Investments with help from My Financial Adviser. My advice is to get a professional who will help you, plan and enhance your management skills. For the record, working with Andrew Louis Stella, has been an amazing experience.

@Sheilamakers

Күн бұрын

Hello how do you make such monthly?? I'm a born Christian and sometimes I feel so down 🤦‍♀️of myself because of low finance but I still believe in God

@Sabrinalekota

Күн бұрын

I'm favoured, $90K every week! I can now give back to the locals in my community and also support God's work and the church. God bless America,, all thanks to Ms Louis Stella 😊🎉

I remember somewhere between 2009 and 2011 I had three kids in daycare. That year it cost me a little over $20,000. I put 30% in my 401(k) that year. I’ve virtually brought home what it cost for daycare. But I did not want to give up my job. Luckily my wife’s job became work from home at that time and the kids got to stay home.

Minnesota. Back to back years of 86k gross income. I feel very wealthy.

need the definition of Middle Class life style first.

If you lived in a Western European country like France or Sweden, daycare and college costs could be minimal or non-existent because the state or country pays for most of these expenditures. However, in the United States these services are often considered "extras". If you want or need these additional items or services you have to pay for them. They are not guaranteed in a normal middle class lifestyle here.

@viktorivakhno2244

Күн бұрын

I guess income is lower and taxes are higher in Germany. You could easily pay 400+ euro for daycare after all of it.

@jeffherringa4709

Күн бұрын

@@viktorivakhno2244 $400 to $425 for German daycare would be a steal in the United States. Many U.S. parents pay thousands of dollars per year for adequate daycare for their children with little subsidization beyond a limited tax credit.

$29,000 for 2 kids per year? I don’t know what people are spending that on. Gold plated legos? lol. Also, the food costs are way too low, and people waste so much money on cars…

@viktorivakhno2244

Күн бұрын

1600 per month for daycare I guess? In Raleigh NC this is how much it cost...

@ErinTalksMoney

11 сағат бұрын

Day care is expensive!!

@pixelpoppyproductions

10 сағат бұрын

@@ErinTalksMoney makes sense. It’s unavoidable for some families - I feel bad for them! We were relatively lucky, and never really needed or used daycare. My wife also works at the school, so my kids haven’t needed after school care. That being said, her wages are basically less than what you’d make working full time at a fast food restaurant. So it’s still a trade off.

As someone who made $360k last year and paid over $80k in taxes I can attest that this is true. Currently sitting here in Nassau on a Caribbean cruise that cost me $7k plus. Thirty years ago my father made $120k a year as an attorney in private practice. My quality of life is effectively the same as his but I’m making three times as much yet netting the same result. Anchoring biases are a real thing. Inflation not only steals your purchasing power but it plays tricks with your mind. You “feel” that “x” amount is worth “y” but if you objectively look at it your sense of value and worth for what a set amount should be is anchored at some point in your youth. The value of what $20 is, or $100, or $100,000 is anchored in your mind but it is constantly eroding.

@tb1951

Күн бұрын

What do you do for work?

@scootsmcdoots80

Күн бұрын

Wow, I need more write-offs, I made just under $320,000 last year and paid almost $120,000 in taxes. I live in Canada though, I'm assuming you're in the USA.

@zoraster3749

Күн бұрын

@@scootsmcdoots80 Yeah, US in a state without an income tax.

@zoraster3749

Күн бұрын

@@tb1951 Upper management in a small company (~100 employees, $30 million in annual revenue).

@raybod1775

21 сағат бұрын

I’m retired with a high income, don’t forget IRMA tax penalties which can add up to thousands a year to pat for Medicare. Investing to keep at pace with inflation is a job in itself.

Excellent video...$175,000

I just ran the EPI calculator for my area and $119,000/yr is what came up as middle class for a family of four. I have 5 children and make around $55,000/yr. I don’t pay for housing or health insurance because I’m military. The EPI said that housing in my area should be just under $1300/mo. That is completely inaccurate for what I would need for my family. A 4-bedroom (3 or 4 kids sharing a room) house with a VA loan would still cost me $2,400/mo! I’m glad I’m military because my wife chooses to stay at home due to child care costs. I can afford it because we are frugal, save our money, and have no debts (we own both of our vehicles). I unfortunately see many other service-members who have not been so disciplined and who make far less than I struggle to put food on the table.

Good % Of Middle Class ?How to help 350 Millions Americans.For example Fund Raising From Cities Counties .can helpful if Neighbors have Kindness .Thanks nice Topic.

100k as a household, with 2 kids, paying for child care? Yeah, you’d have to live on the frugal side of life, but that’s 2 people making 50k… literally the median income in the USA. You also picked Rhode Island, not a cheap area. Why not Cheyenne, WY? Spokane, WA? Midland, TX? Nobody lives in Mississippi? Alabama? West Virginia? 100k, as a household of 4, is absolutely middle class. You can’t do whatever you want, but you’re doing pretty well if you budget. Life style creep is the problem… and housing prices.

@novadhd

Күн бұрын

I actually think the median income is more like 70-80K

@nwj03a

Күн бұрын

Feel free to use google.

This EPI calculator has some ridiculous numbers for North Carolina. Like $795 for childcare? Lol $1400 is the actual number. $1500 for housing? Roflmao, good luck with that…

I can’t reduce 401k investment to spend on daycare because the money difference is now taxable income which calculators don’t account for - the triple hit of child care costs, lost long term investment, and higher tax burdens.

Transportation cost of $16k/yr is really high.

@dantheman6607

Күн бұрын

Not really if that includes gas, car payment and insurance.

@williamandersen1367

Күн бұрын

⁠get an economic used car… then average new car payments don’t matter. Insurance tends to be lower too.

I have cash reserves to maintain my life for 5 years, all expenses included It took me a good while to do this and I'll never look back

@SpicyKimchi-

Күн бұрын

You don’t feel like you’re losing out on what that can make you? That’s a lot of years.

@rkw2917

Күн бұрын

@@SpicyKimchi- nope

@wanderingdoc5075

Күн бұрын

​@@SpicyKimchi-Nope. I have 15 years of living costs in cash/cash equivalents. Not missing out on anything

You can probably get away with 100k in my state Louisiana. Biggest reason is housing here is so cheap. 250k for your average home. Louisiana is suffering from brain drain tho which is horrible for the state. It makes sense though, why stay in Louisiana when you can go to Texas you right next door and you get better education better pay no state income tax and just a better life you dont have to deal with the threat of hurricanes as much. I know a lot of Texas suffered from tornadoes. I scared of both of them and dont wanna be there for a hurricane again hearing those winds hot the side of the house is some scary stuff. 120+ winds make some scary sounds

First comment! Thanks Erin. Great video as always

@ErinTalksMoney

11 сағат бұрын

You're the best!

It says that we should need $150k to have a strong middle class existence. We don't spend nearly that much and don't feel deprived at all. My wife home schools our children and we recently paid the house off. We keep entertainment inexpensive. I always tell my kids they are living the idealistic life.

@viktorivakhno2244

Күн бұрын

If you do not have home you bought 3 years ago, then you are broke on 150k

I was so frugal that I used to squeeze that nickel so hard that the buffalo on the back side would squeal.

So the EPI Calculator says that I need $185,607 for a family with three kids at home. I was thinking that we would need closer to $300,000. We do save 15% of our income and have been doing that for almost 27 years now. We own our home so the amount needed for a place to live was lower for us because we own. We never paid child support as we chose to work different shifts at the hospital that we work at. So that worked out well. Now the youngest is 17 and the benefit there is that we end up spending less with our kids making their own money, buying their own clothes and things that they want.

Luckily I'm single with no debts and no dependents. About 60% of my income goes to investments and savings. I have no idea how a family making the median income can even survive these days.

Im not locked in to my mortgage rate of 3%. Im locked in to my homestead exemption for property taxes. Buying a similar home would cost me 100% more in property taxes.

"Health insurance is a basic necessity" Define health insurance. Primary care costs me $80 per month, no insurance needed. And they treat me like a DEITY in that place precisely BECAUSE I'm not using insurance. It's called Direct Primary Care -- look into it. Now, if you want to insure against actual health accidents and not recurring medical expenses, those plans seem to cost under $100 per month (though you can't exactly just get a blind estimate, so it's hard to say). You'll pay a high deductible which you can plan for, but you'll be inoculated against the $50,000 ER bill (which nobody ever pays anyways - they can always negotiate a payment you can afford) But the idea that you need every. stupid. little. thing. covered by insurance is why insurance is so expensive -- it's not insurance. It's subsidized healthcare. So get actual insurance and pay for dumb little doctor visits for the sniffles or to look at a wart out of your own pocket. Your doctor will love you for it.

@Sylvan_dB

Күн бұрын

Exactly right! The beginning of "health insurance" happened in California and was actually a pre-paid hospital subscription. They jumped thru the hoops to call it insurance so it would be more favorably regulated. From there it grew into the monster we know today where you "subscribe" to everything.

NAVSTA Newport.

I’ve told people something similar to this but they get all offended. I said $185k for a family of four, and that is not lavish. If you correct back to 1947 the median household income is 147k in 2013 dollars

@rayzerot

2 күн бұрын

Wow. We're born in the wrong time

@LastOne155

Күн бұрын

@@rayzerot don’t forget in 1947 almost all households were one income and very few people had college degrees. My WW2 grandparents had the most common mortgage back then- 7 years. For a house and a back house and my grandfather had a 6th grade education and worked in a factory

@maximumutility

Күн бұрын

@@LastOne155 This is a littler high. I just look this up, and the median household income in 1947 was $3,000, which is about $42,250 in 2024 dollars.

@LastOne155

Күн бұрын

@@maximumutility show me the people in 2024 buying a house with a back house on a 7 year mortgage making 42k

I just ran the calculator and it said $139K, but the housing budget they set is impossible to find in this city. Even if you could stay within the housing budget they set, add a 20% savings rate and you're at $175K!!!

@fedguy9182

21 сағат бұрын

Consider relocating to a less expensive area. It isn’t easy but unfortunately cost of living varies widely in different parts of the country.

You need at least $120K/year income just to afford a run-of-the-mill median priced house in the USA today, though it does vary a bit up or down from that depending on exactly where you live exactly. The median price individual income today in the USA is around $60K. See the problem? It's the same basic situation with regards to being able to afford a new vehicle today, & that list goes on & on.

*laughs in Southerner*

$100K is low in my expensive county in CA if you have a family and kids. Good luck trying to live on that comfortably while saving, contributing to retirement, etc..... You can be fine if you are single with no kids.

@Neerdowellofyesteryear

Күн бұрын

Okay...I wish people would stop saying this. But fyi bragging that you make $100k a year in CA is the same as someone saying that they make $32k or less elsewhere. You are not a high income earner. You are poor in a high cost state. A high income earner is someone making $100k+ in a low cost state. Their money goes a lot further than yours. Like my husband and I. We are a one income family, living in a low cost state, he makes 6 figures. We are high earner. You are poorer than us.

@IrisP989

Күн бұрын

Haha.. Where did you see that I wrote that my family is making $100K?… smh.. We are making more than $200K in total a year. Single income family with one rental and kids. We crossed 7 figure net worth last year. We are definitely not poorer than you. You have issues thinking that you are better than others because you make 6 figures in a low cost of living area.. That's not a big deal.. You have much lower expenses than us.. Good for you.. A big deal is actually making 6 figures while living in a high cost of living area on one income, having two house while raising kids, having a 7 figure net worth, having an emergency fund, investments, etc. and not struggling. You are the one that wanted to compare and show that you are better than us... So no, we are not poor. Wrong.. Examples: We booked a cruise, plane tickets and Airbnb for our family for $6K in total (not including the drinks that we will buy on board and other things). No issue paying for that. We hired a landscaper for the backyard (that will be around $5,300. In addition, the plants cost more than $1,200. The delivery from the nursery cost $150). That will be paid without an issue. The exterior of our house will be painted soon (got a quote for $7,500. Will look for other quotes so maybe $6K?). That will be paid without an issue.. Tell me that I am poorer than you in CA...

@Neerdowellofyesteryear

Күн бұрын

@@IrisP989 sure... But even if so. That's still not good. Again, with your taxes and cost of living being expensive. You differently would not be. It doesn't go far there. That is math. I don't know you don't see that.

@IrisP989

Күн бұрын

@@Neerdowellofyesteryear You can talk about math but still.. It doesn't change the investments that we have, the amount of money, net worth, etc. Still not poorer than you even though we have higher expenses.. You didn't even ask how much cash we have, how much in retirement, etc. Just because you live in a cheaper place also on a 6 figure income doesn't automatically mean that you have more money in the bank, more in retirement, more in investments, doesn't mean that your home equity is higher than our primary residence and our rental's equities combined and more...

@Neerdowellofyesteryear

Күн бұрын

@@IrisP989 kind of. Yeah you are. We have a really nice house that we own, we have savings, we have decent materialistic things around us but we are comfortable enough to multiply. You said yourself. You have not multiplied. Usually people's main complaint is that it is too expensive to have children. So either you're struggling because you're irresponsible with money or you're selfish. And there's nothing wrong with being a genetic dead end but then why are you here under the video commenting how $100k is low? Bragging?

Today's middle class must have income producing assets!

Lucky me with a 367k mortgage at 7.2%. $2800/month. How liberating to know I can freely abandon that interest rate anytime rates drop.

"Middle class" is no longer middle class

@Neerdowellofyesteryear

Күн бұрын

Yeah depending on your spending habits and location.

@greggpurviance7252

Күн бұрын

@@Neerdowellofyesteryear was basically referring to the reality that the average income can't afford an average house or average car.

@Neerdowellofyesteryear

Күн бұрын

@@greggpurviance7252 literally not true. Even in this video a household income of 114k of both partners means both are earning less than 60k a year. Not to mention the majority of the US, 70-80% of people make less than 65k a year. The housing market hasn't crashed and the car market has not. So people obviously can.

@greggpurviance7252

Күн бұрын

@@Neerdowellofyesteryear I am not sure what you are saying

@Neerdowellofyesteryear

Күн бұрын

@@greggpurviance7252 then read it again and again. Reading isn't hard.

Good thing we only had 4 kids. The MIT site only shows up to 3…

Middle class will vacation on the ISS. Upper middle class will vacation on the moon. The rich will vacation on Mars.

The income tax bracket of 22% for a couple should begin at $125K Not $89,451.

@maximumutility

Күн бұрын

With a standard deduction of $29,200, in 2024 a couple only pays interest on earned income over $123,500.

Why do all,these videos assume no one ever has to pay taxes. 100k means you get like 70k

First time in American history peoples’ kids are worse off financially than they are. If I did the exact same thing my father did. Buy same cars house and have 4 kids with the same exact job. I wouldn’t have enough money to come close to affording it…

This is quite discouraging. 😢

Some people who make over 100,000 are living paycheck to paycheck 😮

@bgoode652

3 сағат бұрын

This is almost always due to poor spending habits.

I don't understand how a family with 2 working adults can only make $114K. $57K each? That's insane. I made more than that 25 years ago waiting tables.

If this girl did only fans she would be RICH!

If a vehicle should only be 10% of your income, then why would anyone need to put 20% down? If you make 100k a year, then that means you can buy a 10k vehicle. Put down 2k and take out a loan for 8k?? Who is purchasing a vehicle for 10k these days??

@USCarolinafan13

Күн бұрын

10% per year, not 10% of 1 year

People don’t think Bidenomics be like it is... but it do.

@dantheman6607

Күн бұрын

Lol 😂 well my 401k loves Bidenomics