
Households Need to Earn $300,000 a Year to Live a Middle Class Lifestyle - gshakir
https://www.financialsamurai.com/living-a-middle-class-lifestyle-on-300000-year-expensive-city/
======
cimmanom
Because this article completely misdefines "middle class"? Being middle class
doesn't mean you can afford absolutely everything you want. It just means
you're financially secure enough not to have to choose between food, clothing,
shelter, and healthcare with every paycheck, and to be able to save up a
buffer in case of emergency.

Example: $2100/mo to feed 3 people is ridiculous. Instead of buying prepared
foods, cook meals. You can feed 3 people on $750/mo. If you're spending
$300/wk on date night dinner, find something less expensive to do for date
night.

Similarly for some of the other budgets. Drive a used Honda instead of a new
Volvo. Find less expensive ways to entertain yourselves. If you insist on
living in an expensive housing market, accept that middle class family living
in a dense city means (and has always meant) a (cramped to midwestern suburban
sensibilities but quite livable) 2BR without outdoor space, not a house with a
lawn; and consider renting instead of buying.

Middle class living means making compromises. If you're not making
compromises, that's upper class living. And yeah, that can cost $300k/yr
easily.

~~~
mratzloff
_$2100 /mo to feed 3 people is ridiculous. You can feed 3 people on $750/mo._

$700/mo/person is $7.65 per meal, which is quite reasonable. $250/mo/person is
about $2.70 per meal, which is not.

"In 2005, sociologists William Thompson and Joseph Hickey estimate an income
range of roughly $35,000 to $75,000 for the lower middle class and $100,000 or
more for the upper middle class."[0]

In 2018 dollars, that's $44,800 to $96,000 for lower middle class and $128,000
for upper middle class.

[0]
[https://en.wikipedia.org/wiki/American_middle_class#Income](https://en.wikipedia.org/wiki/American_middle_class#Income)

~~~
harryh
_$250 /mo/person is about $2.70 per meal, which is not_

It's plenty. I just looked at my mint. I've averaged $678/month on groceries
for my 3 person family over the last year. One of those 3 people is a toddler
so I'm obviously saving some money there. We eat out occasionally (so not part
of this budget item) but rarely more than once a week. And I'm not in a
position where I have to scrimp. My wife and I had lobster last night.

2.70 doesn't sound like much if by "meal" you think of "dinner" but it's a ton
if you're eating eggs or cereal for breakfast and a sandwich for lunch.

~~~
graeme
Do you live in a coastal city and work a professional level job that pay
$150,000 and requires intense hours at the office? And does your partner as
well?

An assumption in the article was that both parents were too busy with work to
cook reliably.

I agree it's plenty for most households. Just may not be for the households
this author is talking about. It's a good illustration of how a higher paid
job may not net that much more: you lose a lot of the income in extra taxes +
extra lifestyle expenses to support the job.

------
tsunamifury
I think we should come up for a new term for working high income households,
something like a "City class".

They make between 250-699k. They have mostly what they need but work very hard
and aren't the leisure or power class that is associated with the upper. They
don't have or really identify with the same money problems as the true middle
class but they certainly don't have enough to spend frivioisly. They give up
some things compared to the middle class in low cost cities though like yards
and larger homes. They also have to pay expenses that other single income lcol
dwellers don't like nannies.

This seems to draw a real.line between the nonworking rich and the working
well off.

~~~
ajmurmann
I think the real issue for it national debate is that the economy in different
places has drifted apart so much. On one hand we have people in big cities
making $300k+ and just living a normal life and we have parts of the South
apparently being in a comparable living situation to the third world according
to the UN. Yet we talk about it as if it's all the same. It's especially
problematic for things like federal taxes.

------
sethammons
I think the key here was costal living in economic hubs. I was looking a
little while back to see if I should move closer to work to reduce my super
commute. For the same price as a stucco 1000sqft house with near zero yard,
bars on the windows, graffiti on the building with a homeless person sleeping
on the sidewalk, and being right next to the freeway, you can pick up a house
literally 3 to 6x larger on 10 acres in Montana that looks like it is out of a
story book. It costs much, much more to live close to the economic-hub costal
cities.

~~~
chomp
Yes but I live in Houston which is coastal, and I guarantee you can live like
a king on much less than this. I have a 3k SQ ft home that I'm paying $1500/mo
on, and that includes interest and escrowed taxes.

~~~
URSpider94
Houston is on a coast, but it’s not “coastal”. In this context, coastal means
being on the Atlantic or Pacific Seaboard,

------
scarface74
How can anyone pay any attention to yet another west coaster who lives in a
bubble?

[https://dqydj.com/income-percentile-calculator/](https://dqydj.com/income-
percentile-calculator/)

If you make $300,000 a year in household income, you are making more than
98.9% of households in the US.

Our household income is a little more than half that, we live in a major
metropolitan city, have a 5 bedroom 3-1/2 bath house in one of the affluent
counties in the country that was brand new build in 2016 that costs $320k. Our
mortgage is around $2000 a month.

We aren't able to max out both of our 401Ks right now, but I do max out mine
and my wife works in the education system with a pension.

We are a family of 3 and our grocery build is around $800 a month.

We explicitly decided not to save for college. We are in a state that has
practically free tuition to any public college as long as you maintain a
3.2(?) GPA. If our child can't keep that GPA in high school, why would we pay
a lot of money for him to go to an expensive college? We can afford to pay
tuition for four years out of pocket for him to go to a public two year
college his first two years and then transfer.

~~~
arbie
> If you make $300,000 a year in household income, you are making more than
> 98.9% of households in the US.

A national percentile calculation does not meaningfully apply when the source
county is on either extreme end of the income spectrum.

In 94129, for example, 40% of households make over $200k and the average
household income is $250k:
[https://www.incomebyzipcode.com/california/94129](https://www.incomebyzipcode.com/california/94129)

~~~
scarface74
And there are plenty of places in the US where the salary/cost of living makes
more sense.

~~~
arbie
Not denying that, but _some_ people must live in cost-of-living bubbles
(otherwise how can such bubbles exist?) and comparisons for such bubbles must
be made _within_ the bubbles.

------
harryh
This post has a bad title. HN should change it to reflect that OP is
specifically talking about living in SF or NYC.

(I still have criticisms of the piece, but it's at least kiiinda
understandable when talking about those two cities.)

------
RhysU
> Yes, their total tax bill is ~$17,000 more a year than today’s median
> household income...

Glad to see the author pointed this out. Regardless of what you think of his
budget, this basic taxation fact remains true.

------
truculation
My idea of middle-class existence is a thrifty but relatively happy family
life with an emphasis on education. The budget could vary enormously depending
on how this is implemented.

------
gshakir
I found it surprising that the budget does not include emergency fund, gifts
to charity. It does say at the end it is missing those things like that.

------
tonyedgecombe
Middle-class is such a meaningless term now. US median household income is
about $60K, that is the middle of the income distribution.

~~~
black6
Middle-class is a function of outlook, not of income, occupation, or status.
Future preference, self-discipline, social conformity, infinitely expandable
material demand, and a general emphasis on externalized impersonal values are
the attributes of someone in the middle class (from Carroll Quigley's 'Tragedy
and Hope' from which an excerpt on the middle class can be found here:
[https://pastebin.com/raw/6iFPbQdp](https://pastebin.com/raw/6iFPbQdp))

------
ohiovr
I’m not middle class but if you are thrifty and can prioritize freedom over
needless expenses ie $5 cup of coffee it isn’t hard to live very comfortably
in many parts of the usa. I understand owning property at all can be much more
challenging in europe than it is in much of the usa mainland.

Coastland and island living is going to be more expensive for various reasons.

~~~
kristianc
> I’m not middle class but if you are thrifty and can prioritize freedom over
> needless expenses ie $5 cup of coffee

I'm not sure how the $5 cup of coffee became the symbol of financial
irresponsibility. An apartment in Midtown NYC runs about $4k a month. LIC is
$2.2k. Yet for some reason we blame the coffee.

~~~
sokoloff
It started from the "Latte Factor": [https://davidbach.com/latte-
factor/](https://davidbach.com/latte-factor/)

I do find it absurd to pay $5+ for a few ounces of hot water poured over
ground beans or chopped leaves and placed into a cup with a mermaid on it, so
I don't do it.

I also don't think it's the _root_ of people's money problems. However it,
combined with 19 other small frivolities, is one _branch_ of their problem in
a lot of cases. (The branch being "unexamined, frequent, persistent leaks in
the bucket".)

~~~
kristianc
Sure - but you're confusing what people are actually paying for when they buy
a Starbucks.

When people buy Starbucks, they're buying 15 minutes of time to sit in a warm
cafe with friends, free WiFi, a space to work, and the labour involved in
having to make the coffee for themselves.

I'm still not sure it amounts to an argument why the $150 a month people would
save on coffee are the root of people's money problems, or why they should
give up that 19 other small frivolities just so they can afford somewhere to
live.

~~~
maxxxxx
"When people buy Starbucks, they're buying 15 minutes of time to sit in a warm
cafe with friends, free WiFi, a space to work, and the labour involved in
having to make the coffee for themselves."

I see a lot of people do drive through. There are no friends involved and they
probably can't even enjoy their drink while stuck in traffic.

~~~
kristianc
> I see a lot of people do drive through. There are no friends involved and
> they probably can't even enjoy their drink while stuck in traffic.

My model doesn't require me prove that every single person makes a perfectly
rational economic decision when buying a Starbucks - merely that people derive
more than the value of the beans and the water from consuming a Starbucks.

~~~
maxxxxx
It's fine. People just should be aware that they are spending a substantial
amount of money on it. A while ago we looked at my girlfriend's Starbucks
receipts and they added up to $1300 a year. That's a nice vacation or a new
camera or something else she thinks she can't afford.

~~~
scarface74
But that cup of coffee may bring her a little joy every morning. That vacation
is maybe a weeks worth of pleasure? I'm not saying either is right, but it is
about priorities.

Because of...reasons...I am having to choose between enjoying time with my
wife now and saving more for retirement and retiring a little bit earlier. We
have only being married 5 years and now have the flexibility to enjoy our
selves more. I'm purposefully making the choice to live for the now. I'm
turning down side contracts that people keep trying to throw at me because I
really enjoy the now.

We all make choices.

------
purplezooey
Ah yes. Starts off with BART salaries. Just revealed his right-wing
intentions.

