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Excellent video...$175,000

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.

Don't forget all the inflation due to the insane amount of money printing and the foolish covid shutdown. Especially the overreaction to it California that caused cargo to be so jammed up.

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!!!

Sounds like China

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

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

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

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%.

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.

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…

I've been adding $100 extra a month, but since my mortgage rate is 3.5% I've been investing most of my savings rather than putting more of it into my mortgage. I figured if I could shave off a few years it'd be nice.

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.

30 years is a much more realistic timeline. It takes 10 years after schooling to get your life set and start making real income. Before that, you have youth, girls/wife/kids and basically life-building measures. Car, work, house, work, sick kid, work. Years later you can do the $15 a day trick - but hopefully you have been putting some % in your work 401k...

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

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

In 2011 I retired at 55 and fall into that 56% who have a traditional pension. I “only” had $500,000 in savings. My wealth is my monthly pension income (which is pretty generous) + my Social Security (taken at 62). I leverage that income by living in Thailand which has a lower cost of living. I am doing just fine. I do agree though that today’s work environment and probably the future economic environment is very different than my life circumstances. All we can do is responsibly adapt to circumstances as we find them. My one piece of advice - LBYM or live below your means. You can’t save otherwise and you will be comfortable with a lower standard of living when you do retire. Learn to enjoy life at whatever standard you find yourself in. Hi Erin - remember our interview from a couple of years ago?

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

Love the bloopers

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.

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

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.

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.

If this girl did only fans she would be RICH!

Funding early in the year can have a drawback if (1) the person is putting it into a Roth IRA and (2) that person isn't yet sure whether or not their income for the year will be under the AGI limits for direct Roth contributions. But one way to get around that issue is to fund the same amount of money into a taxable investment account at the start of the year, and then use that to fund the IRA later in the year when it becomes more certain that the person will be under the AGI limits.

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.

This is quite discouraging. 😢

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

John Deere just announced they are closing manufacturing plants in Illinois and Iowa and moving to Mexico, Walgreens just announced massive store closures around the Nation. Americans are finding out what "build Back Better means, building Mexico and China better, while Americans struggle to live a lifestyle on $100,000. At the same time paying for hotels, food, basic income for 20 million illegal aliens on the taxpayer backs. Sorry but it's the elephant in the room nobody wants to talk about.

need the definition of Middle Class life style first.

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

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.

1 Bitcoin.

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.

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.

Ayyy, I recognize 20-4-10 from the r/personalfinance wiki. Is that where you got it? I briefly tried looking for the source of it and I found some resources saying it was an old rule, but I couldn't find any specifics. I like The Money Guy Show's 20-3-8 rule as well if you can manage that. To me the very idea of a middle class lifestyle is problematic right from the start. The danger is when you think you "should be able to afford" something - a vacation, a car, whatever - based entirely on the fact that other people in your perceived social class seem to be able to. Keeping up with the Joneses is so obviously prevalent and so damaging among our peers. I started to go into some details, but what it boils down to is, I just don't know if we live a "middle class lifestyle." A lot of people that I'm pretty sure make less than we do drive much nicer cars than we do (even their kids do!), go on more (and more expensive) vacations, and live in much nicer homes, often with HOA-funded amenities and impeccably manicured lawns. From the outside we probably appear lower-middle class at best, but I suspect we are in better shape financially than most of our peers unless they've received inheritances or gifts or something.

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

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

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.

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

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.

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."

Outtakes!! Yay! Transportation, housing and food all have a lot of wiggle room. Lifestyle creep and keeping up with the Jones will make you poor. Make smarter choices.

50/30/20 Needs/taxes/unexpected needs

"Middle class" is no longer middle class

Child care cost seriously needs to be addressed

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.

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…

"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.

NAVSTA Newport.