The Middle class life is not available to 60% of Americans. So now in order to have a decent retirement and not be drowning in debt, I'm pretty much living like a poor most of the time. I don't really WANT to live like a poor, but have the ability to defer gratification to a certain degree. Telling people not to live above their means or reduce their desires doesn't seem to help for the majority for some reason. It also doesn't help that it seems to take a lot more means to have a good house, two good cars, vacations, kids, and a safety net these days. Right now I only have a meh house, one car for two adults, a small safety net, and working on yearly vacations and trying for a kid. I am living less large than my parents and it sucks. How the majority deals with this problem is going to be a struggle.
Two different goals/questions:
Are you living more or less large than your parents at your age?
Do you have a better net worth than your parents at your age?
If the rich keep getting richer, and that ain't you, then how rich do you need to be to be in that positive feedback loop?
This is interesting, and I think it would be even more interesting to look at massive statistics. I had a discussion with someone about this about fifteen years ago.
When I was a kid, my parents:
- Had a small-ish house with one bathroom (1300 sf?) on an acre in the country
- Dad worked, mom stayed at home
- We had 1-2 cars, always old and in some amount of disrepair
- Generally 3-4 kids at home
- We never ate out. We had a garden. We never vacationed. We had one vacation when I was 7, drove to NC to visit an uncle. 2-3 times we went camping (borrowing camping gear) to Lake Erie (1.5 hours away).
- There was no cable TV, only 3-4 stations. Only hand-me-down clothing. Never went to movies.
- Socialization was at my grandparent's camp on the weekends
- We had one phone. No cell phones or internet.
- Regular vacations were not for the middle class. Only a few friends went on vacation. Everyone else just drove to go camping.
- The safety net was family and social security
- We did not have health insurance
We were probably poor, but maybe considered lower-middle class? Looks like for a family of 4, we were making $12k a year, and the poverty level was about $10k.
My husband's family was middle class, and they went on a vacation to Europe every other year, to visit family.
Compared to us - it's kind of hard to pick when to make the comparison. 15 years ago husband was in grad school, I had a job, and we had no kids. Now we have 2 kids.
- Two engineers with good jobs
- a meh house - much smaller, older than my parents' but in a better location
- meh cars
- an annual vacation or two, but generally keep it to driving/ camping. Once every other year fly to visit family
- Health insurance (double covered)
- Dental insurance (I rarely could afford the dentist at a kid)
- Vision insurance
- a 401k apiece
- cable internet, two cell phones and even more electronics at home
I guess even with being frugal, I'm way ahead of my parents, but it's kind of an unfair comparison because we both have degrees and are engineers (my dad was a mechanic, my mom was a SAHM and then went back to work as a bank teller)
A more fair comparison would be my brother and SIL who still live in my home town. Two decent jobs (prison guard and at a bank), vacations to Disneyland, a house with a crappy kitchen that they cannot "afford" to upgrade, lots of nice new clothes. New cars. State pension. They live pretty large though, and eat out a ton.
While I don't disagree that times are, in many ways, tougher than they used to be. I must admit that *most* people I encounter aren't comparing apples to apples.
Cell phones and internet for one thing. I would never suggest that someone not have these items (though five years ago, I did not have a cell phone). But it seems like people are used to a better quality of things.
But even past cell phones and internet. Cars are bigger. They use more gas. They are newer. My parents once owned 2 Fiats! Nobody had a truck, SUV, or minivan. Every car was bought used. Every one. New clothing? I got my first new winter jacket in 10th grade. I owned 2 pairs of shoes, hand me downs were gathered FIRST. And we never ever ate out. Maybe once a summer we would get soft serve ice cream at the burger place. And during "back to school shopping" (where we would each get 1 shirt, new socks, and 1 pair jeans), we would have lunch at McD's. Except for those 2-3 years where we were not even allowed to go shopping with mom, because we couldn't afford McD's.
And health insurance - we didn't have any. We paid cash for the crappy dentist and the doctor. But paying for our own health care came before "wants" like vacations, TV, etc.
