Full cost to support a family of four to middle class standards

[Skyhigh]

I frequently have a debate with people regarding the true and full cost in America to support a family of four. In my area of the nation it seems to be around $100,000 K minimum.  People often debate that this number is way too high. It seems to me that many are only looking at what their present needs are and forget to include retirement, college savings, student loans, debt pay down, the rising cost of health insurance, the rising cost of children as they age into their teen years, saving for vacations, and saving in general. 

It is difficult to understand what our financial situations are since it is so ingrained throughout our personality and life. Often we do not wish to acknowledge what our real situation is. Sometimes people are very well off and do not wish to lose the drive that comes from the fear of poverty.  Others it seems are complicit in a self delusion to let themselves believe that if the bank will give them a new car loan that they must be financially alright. People often seem to permit television, social standards, and peer groups to provide a view of what a healthy financial situation is and the result can make for an ill prepared financial life.

In my estimation we may only have 20-40 years of effective work life. In that time we need to be able to provide for a lifetime of financial needs. Our financial past in the form of debt, present as in providing for the daily expense of life, and future as in retirement funds, must come largely from the fruits of our labors over what really is a short portion of our lives. It seems to me that most are under estimating what it costs to provide for all that is really need to support modern life.

What are some thoughts on what it takes to fully support a family of four taking into account all benefits, saving requirements, and debt service?

Skyhigh

[mxt0133]

For San Francisco with a median income of $75,604, I think that it would be around 90K gross for a family of four.  But that would be too low for most people as most professionals in the city make that on one salary.  Add in a working spouse and your in the 150-200k range, which is on the low side for my "professional" social circle.

My family of four can live pretty well on 100k gross and still save enough to retire at 67.  But to most people we don't live the typical middle class lifestyle, more like working poor maybe.  We value family time more than stuff, we don't have debt, do not plan to save for kids college, don't go on resort vacations (only fly to the east coast and stay with family), find free activities, but still eat out more than we should.

[crispy]

I think it depends on where you live and how much housing costs. 

[MrFancypants]

After my house is paid off I presume that I'll be able to comfortably support a family of four on about $32k a year.  This includes a reasonable and fair amount of money for extracurricular activities for the children (music, dance, sports, whatever).

[I'm a red panda]

What are middle class standards? People define this SO differently, and that is going to make a huge difference in what it costs to support it.


Heck one of the articles recently linked included YEARLY international vacations as middle class standard. I think I grew up firmly middle class, and upper middle class as I got older and my family never once went on an international vacation.

[Bob W]

Love how you laid out and wrote your post --

I'm guessing that you are doing some soul searching, keeping up with the Jones vs. retirement planning in the brain?

As a poster noted housing varies greatly.   Food, gas, utes somewhat.  Cars pretty much the same.

So I would have to note that we could (not that we do) support our family of 4 excluding the house payment on 30K per year while living a lifestyle and visually above the average middle income group around us.   Vacations included buy not eating out.   

I think for most families if you strip away the eating out,  outrageous vacations,  gas guzzlers,  mortgage, debt payments, miscellaneous crap and are conscious and thoughtful with your spending that 25-35K could provide a very nice lifestyle.  (you would need to add in the cost of housing)

We in fact did this nicely for about 3 years recently as I stayed home with the kiddo. 

I have noticed that now that I am back to work that pent up demand and lifestyle inflation has pretty much eaten up my income.  ( I know, we're correcting this now)

Good Luck!

[Gerard]

retirement, college savings, student loans, debt pay down, the rising cost of health insurance, the rising cost of children as they age into their teen years, saving for vacations, and saving in general. 
Skyhigh

There's a fair bit of double-counting in your list. You pay for retirement and college and vacations, but you don't actually save for them above and beyond what they actually cost. And if you save for college or whatever, then student loans and debt pay down don't enter into it.

Aside from that, a lot of it is a matter of identifying which components of "middle class standards" are sub-optimal or overpriced. Where I live, if you're well-educated, you have middle class status and potentially fairly high living standards without the shopping list of "needs" or trophies that drag people down (vehicles, big house and all it requires, package vacations, kids' team sports, private school, inflated-reputation university, this week's i-Thing, disposable fashion, addictions).

[deborah]

Given that most families of four don't become bankrupt, I suggest that most families of four manage to live on their salaries - which would be less than $100,000

[slugline]

To answer the OP's question -- yes, I think a middle-class family can do just fine on a minimum of one hundred million dollars.

[WGH]

Our family of 4 lives comfortably on about $100k gross but not lavishly. We have the two cars, mortgage on the 3 bedroom house, student loan debt, everything that I suppose these days is pretty typical middle class.

We have a couple of face punch worthy debts and expenses some of which will be going away soon and afterwards we will have quite a bit of extra each month.

I suppose my point is $100k allows you to absorb some lifestyle keepin up with Jonses type inflation but still save for retirement etc. So IMHO if middle class standards are two car payments, decent mortgage, student loans, dish/cell phone/internet, some eating out, some splurges on clothes, etc. then yeah I believe it takes $100k. If middle class standards are one reasonable car payment and one paid off older vehicle, 2 bedroom kids sharing a room mortgage, no student loans, much more conservative spending then yep could be done on $50k or so.

Different folks will see middle class standards differently.

[fartface]

Two years ago, DH & I made combined wages of $130K + ~15K net rental income for a total of about $145K/year.

DH FIRE'd and we sold the rental property about 18 months ago.

This past year our AGI was around $100K for a family of five + we sold our boat for over $10K.

Saved or invested $50K in both pre-tax and taxable accounts.

[Skyhigh]

Where one lives plays a major role for sure. Where I live a starter house is around 185K.

[Calvawt]

I think the basics are much less, but $100k should allow you to save quite a bit towards college and retirement.


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