What do you suppose the Salary is for middle class? (1 Viewer)

I've always been very curious as to how much money Americans make. What is the salary you receive when you say, Ok this is what I'll retire doing, this is a good wage. Because right now I make $42k a year, and I have GOT to get a better job, because that's not enough.

I know that location plays a part, but on average how much is enough?

Totally depends on where you live. Some places $40K for one income is more than enough to be considered middle class. In others (major metropolitan areas) it is not.

Here is a nice report for you:
http://www.census.gov/prod/2003pubs/p60-221.pdf

How much money one makes vs. how much they "need" is a relative term based on lifestyle. You really only "need" enough money to buy food, clothing and shelter if that is not provided for you by others. Everything on top of that is just gravy.

In reality, we also use money to provide for education, health care, grooming, transportation, and various other items and services that make living easier. Within each category, the quality of goods/services varies greatly. No one "needs" a private school education or a BMW.

It is nice to think that even a "poor" person in America can have a surplus of food.

2-person relationship, one steady job, $21,000/year.


I'd stab puppies for an extra $21,000 a year. Then I'd waste it all on hats.

I think it mostly depends on location. Here in Northern Va (Fairfax County specifically) I think the average household income is somewhere in the mid 80k range.
That is pretty decent but when you consider that new single family homes in this county start at over 500k and new townhomes usually start at 400k it isn't cheap to live here.

Jeff

I don't make enough and others make too much. That pretty much sums up the general attitude of most people.

I mean, having enough for necessities is always the minimum requirement. But that's not why you go to college, and bust your ass for a degree.

I'd like to know how much do you make when you say, "Ok I've made it, I'm making the kind of money to live comfortably until I retire."

Again, nobody can answer that question for you, LaMarcus - read the replies, follow the links. It completely depends on the lifestyle you want, the amount of savings you want for retirement, how much credit you have, the number of children you're going to put through college etc, all wrapped up on where you live in the country.

One thing to note - just because you see people living an opulent lifestyle with lots of toys & nice "things", it doesn't mean they're earning enough to actually afford all those things. Lots of Americans have lots of credit beyond their means.

If you've answered the question, you're not playing the game right.

You can't look at it that way because you're not taking into account the possibility that there may be periods in your life where you have no income, i.e. layoffs, health problems, etc. Depending on how close you are to retirement, don't expect Social Security to be enough. A better approach is to figure out how much money you'll need for the lifestyle you want when you retire and work towards that.

Other than location, the main thing to consider is how many dependents you have. When I was single, I was making much more than I needed. Now I have a house, a fiance (working part time) and a baby girl at home, and I now find myself having to think about money much more than I used to.

Brian brought up a good point about Americans living outside of their means. Practially speaking, most people can't pay cash for a house or even a car, so those usually require a loan. However, I don't know how some people can justify carrying credit card balances for things like clothes and TVs. If I can't pay cash for it, I don't need it right now. I think a lot of people would have a heart attack if they knew what all that interest adds up to; they only see the $20 minimum payment.

I think I read a couple of years ago that the average American family earns $35,000 per year. Seems unreal that some people can live on that, but then again, I guess I could do it if I didn't feel the need to obsessively buy DVDs every Tuesday.

The trick is buying used cars. Assuming you don't buy 2 brand new Ford Dreadnaughts every four years you can easily save $1600/month.

and buying socks at Wal*Mart doesn't hurt.

Well I am 21 yrs old, married, just built our brand new home, paid cash for my vehicle, paid cash for my wifes vehicle, still in college, pay for my own college, pay cash for my HT addiction, and do this all on our measly $35,000 a year. We pay off our credit cards every month, that we use only for gas and other things that require credit to pay for. I budget our money very well and we have extra money to spend on fun stuff like HT.

I have to say that if you budget your money right, anyone can live comfortably and still save for retirement. Even though I am 21, and still in college, I have started saving for retirement.

I see it as: save and invest as early as you can now, that way when retirement comes, it makes life so much easier when it comes time to relax and enjoy life. I by no means live so cheap that I don't have a good time now, it is all in the way you manage your money.

Once I get out of college, our income will more than double and then I will probably spend more also. But if people would learn to save what extra money they get, just think of how many years they could shave off before they retire. My goal is to retire somewhere between the ages of 55-60. My neighbor actually retired at 45. He was one of the biggest tightwads in his early years, and did this off of a $90,000 a year salary. The man and his wife live a nice lifestyle now and do not worry about money now. Anything is possible if you put your mind to it.

Most Americans spend what they make and more. So if you make more, you spend more. If people would just learn how to manage what they have, life would be so much easier. I can say that it is just me and my wife now. When kids come in the future, my extra income will be needed once out of college. So it does also depend on how many kids (people) you are supporting also.

My house is the only debt that I have and that is how it will always be in my future. At least until the house is paid off.

Sorry for the rant. I just see too many people that make so much more money than we do complain about money all of the time.

Reminds me of my first job many moons ago. I asked for a raise and my boss said "Why do you need more money ? The more you make the more you'll just spend." (no joke)

I didn't stay there much longer...... But he did have a point: As you start having more disposable income, the more your "needs" tend to grow. When I was just out of college I was happy with a 1 BR apartment, 19" tv and Sony floorstanding speakers.... Now I'm all ticked off because I only have a 50" LCD and crappy Energy speakers. Gotta keep up with the Joneses !

I can't say I've ever complained about money because I know I buy some pretty stupid stuff. Just trying to do the math, I figure that $35,000 equals about $26,000 after tax and insurance, or about $2,200 per month take home. Figure for a family of 4 per month:

Food: $200
House: $800 (incl. taxes, should equal a house worth $125M)
Car: $250 (1 car including insurance)
Gas/Auto Maintenance: $100
Utilities & Phone: $100
Clothes/Toiletries: $100
Incidentals: $100

That leaves $550/month for retirement savings (for two people), education savings for the kids, and cash savings for emergencies.

I guess it can be done, but there aren't too many places left where you can do it without a struggle.

About a month ago, John Stossel of ABC's 20/20 did a special report and asked almost exactly the above question. After an extensive look at incomes vs locations, the conclusion was that the majority of Amercians are certain that they need .... "about 20% more" to live very comfortably to retirement.

Think about it ... take your present annual household income, figure an additional 20% free spending money and you'd be much more happy ... right?

The point of this is clearly what several above posters have said ... your lifestyle will always expand to fit yoru income. For too many Americans, their lifestyle is just above their income (i.e. growing credit card debt). The average household credit card debt in america now exceeds $8,000. and each household has on average 7-10 credit cards.

the magic formula ... Figure out a career that you really enjoy and have a skill for, get the necessssary education, then work relentlessly at your vocation. 50-60+ hrs per week is what it's going to take to get ahead. Don't spend too much, don't take too many vacations and don't work multiple jobs. This is not a big secret, ask anyone who has "made it".

Jon Gregory ... my hat's off to you. You have a great deal to be proud of, but most of all your attitude and foresight.

Yikes!

Not in my house. My total credit card debt, $512.00 but it is paid off every month. Other then my wifes van, we have no debt. I could have taken out a mortgage for the van but we got a nearly interest free loan so it was not worth it.

Phew - now I don't have to feel so bad! I started really getting concerned now that my total cc debt is closing in on a thousand (though May 1 I will pay about $700 of it off)...

That isn't even as much as our electric bill. Then you add phone, cable (I know, not a necessity), oil, water bills...

What's my point? I don't really have one. Those figures just jumped out at me so I thought I would give my own spin on them.

It really is true that you just naturally change your spending habits when you have more or less money. And sometimes you end up doing more with less. 4 or 5 years ago, I was making $18000 more each year than I do now. Back then, we were renting, could hardly pay our bills and were generally broke all the time. Now we make less money, but own our own home and are actually doing much better financially.

Mike "I know there's a point in there somewhere" Pineo