Spending
Average household annually spends $38,045.

Breakdown of household spending.

Food- $5,435 (13%)
Healthcare- $2,120 (5%)
Housing- $12,527 (31%)
Entertainment- $1,958 (5%)
Utilities- $2,487 (6%)
Insurance/Pension- $4,308 (10%)
Apparel and services- $2,004 (5%)
Cash Contributions- $1,344 (3%)
Transportation- $7,568 (19%)

Breakdown of household spending

The average household has around 3 people.

On a monthly basis, these numbers don't seem to work.

The solution is clearly to cut transportation costs dramatically in order to pay for the extra housing, health care, and energy costs that we face today.

As a side note, that 10% pension figure includes social security because technically speaking, it is a pension plan. A terribly expensive and unreliable pension plan.

The title of this thread is "Middle Class Families in Worse Shape Than Ever". The title of the thread is not "It is impossible for the Middle Class to survive."

I'm glad you agree that it is way more difficult.




Yes it is feasable for a four person family to live in a 2 bedroom apt. When you say nothing is impossible then we could go as far out as we would like. We could conceivably have 2 families living in a 2 bedroom apartment, with only one or two wage earners. This happens in Calcutta right? This is not about what is possible. This is about the declining living standards of Middle Class America. Nothing less, nothing more.

It is not about how the middle class is ruining itself by buying x-boxes, vacations to Disneyworld, digital cameras and fancy new cars. It is how the middle class is expected to produce way more energy in terms of work hours for the same benefits afforded an older generation.

This is what happens when there are more people and less resources. This is why Peak Oil and Decline Oil will squeeze the middle class to the point of collapse.

As a reminder, places where housing is insane tend to have much higher incomes than the national average.

The median household in San Fran is over $57,000 a year (more than 40% higher than the median household used in the previous article).

Granted, housing costs are significantly higher than 40% the national average.

So the transportation figure must come down to compensate.

San Francisco has the advantage of being a rather infertile city. Only 14% of the city's population is under 15 compared to 20% for the country as a whole, so the child-raising costs are lower.

I don't know, something is keeping these high cost areas afloat. The coming housing bust will either make these places affordable again or they will lose population to cheaper locations.

I don't discriminate, I blame everyone for making stupid decisions, poor, rich, or someone in between. I am a registered independant who is sick to death of people wanting everyone else to save them from their poor choices, when the solution is usually pretty simple. Stop making poor choices. Kids, money, too much care, too many gadgets, just STOP already.

And you are right about us being a different generation then our parents, my earning potential had outstripped my mothers union position by the time I was 28. There were some bumps along the way but the potential? Darn straight its better than my parents.



My question is, isn't it amazing how half the population lives below your "gee are you screwed if you sit on the median" dollar position, and somehow, they manage not to die, most of them have a roof over their heads, and most of them head off to work, have kids, get their kids to college even, and all of this while living below what YOU consider some arbitrary income level because you can't conceive of cheaper housing, let alone a cheaper way of living.

4 years ago I was offered a perfectly nice house for $26G's. People do not HAVE to have McMansions, they CHOOSE McMansions.

But you will notice about two pages back it went from "worse shape" to "its impossible" and thats when I went ballistic.

My point in these various arguments is that we are inflicting serious economic harm on these people because of our social expectations about how they should try to live.

There are still ways in America to make a $35k / yr family work, and work modestly well; but we are all way to embarrased about it to get these people out of slavery to $1000 apartments and day care, and into stable, less expensive homes, lower power and cost living, etc.

Maybe my town would be considered less than "perfect" or "pristine" by the typical suburban home buyer; but there are plenty of recent mexican immigrant families within walking distance of me, living perfectly reasonable lives; they shop in the same stores as I do; and they are doing exactly what I suggested above. Their families are stable and happy, mom cooks more food than they could ever possibly eat, all from scratch, dad brings in $25k - $35k; he rides a beat up mountain bike or walks to work. There's usually a truck involved for more serious things, but its usually ten years old and only gets used when its needed.

They make it work and work well because they have not been beaten about the head and shoulders about how they are REQUIRED to live, or what home arrangements are APPROPRIATE.



They are certainly declining. I'm not contesting that. But what makes it worse, is our rapidly expanding concept of what is the APPROPRIATE standard of living for a middle class family. 60s&70s, house? yes. TV? maybe. Radio, one. A/C? window unit and dad will whack you if you turn it on. Fridge? Small. Freezer? full of bulk food. Bathrooms? 1, small. Bedrooms, 2 or 3, 8ft square. Living room? Sure, 8ft by 16ft. Car? One, buy one every decade, mostly used.

That is middle class living.

That ain't what we are telling people they are expected to do.

Something went really, realy wrong in the 80s, and I'm not sure I understand what it was.

I got my computer desk when the lady across the street from me put a "free" sign on hers and put it in her driveway. Inherited some of the back porch furniture from my mom. Who got it from her mom.


Ladies and gentlemen, now we see the REAL choice! Pay close attention to how your housing works, and then make a GOOD choice, versus the usual kind.

Me neither. Except I look around today, and can't for the life of me figure out how it convinced so many people to do so many silly things. I understand the entire energy concept, its cheap, its here forever, LETS ALL COMMUTE 70 MILES TO WORK IN AN SUV!!!

But doing it to go deeper into debt on a bigger house which you can barely afford to heat and takes 10,000 gallons of water a month to just keep the lawn green? WHAT?!

My house is 60 years old, 1100 sq. ft., needs new windows, doors, flooring and the roofing will soon have to be replaced. I wish I could take you on a virtual tour. It was appraised at $260K this year. I live in a lower middle class neighborhood in a city of 1,000,000, where there are currently lots of job opportunities and that's one of the reasons we stay here.

You're absolutely right, Rwwff, we could find a comparable house for quite a bit less (maybe 150 to 175K) in a smaller, more remote community. But what about the job prospects there? A person's financial situation doesn't change much if they buy a less expensive home in a small town and then bring home only one-half the income.

Other things that keep people in the place where they live - wanting to be in the city where their kids are; taking care of elderly parents and in-laws; not wanting a long commute!

Job prospects around here are awesome. On the other hand, factor in the costs of progressive taxes and unnecessary day care... If you cut the house cost in half, and the salary in half, you are way ahead of the game financially.

However, it might be embarrassing to tell your friends that you live at the end of Bob's Road in Twinkledirt Village.... [I still have twinges of this, but I will not be ruled by such feelings.]



1.) Elderly parents... they are assets, not liabilities, if you got'em; take'em with you; they need about 100sf of space for themselves and run of the house.

2.) Long commute? Work local. _____ the Joneses.

Thats middle class living.

PS: same story here on windows and doors; I'll probably do new weatherstripping on everything and insulate an uninsulated wall this fall as it gets cool enough to work on the house.

Ok- I know- all the poor and working class folks living in Western and North-Eastern cities should all move to.......Nebraska, because the rents are cheaper.

These folks don't have the capital or the social network to up and leave their hometown and relocate. So they are forced to make do with where they live. That means paying 1000$ rents (at minimum) and paying through the nose if they want to buy a house. Usually they have to commute because the apartment/crappy house is on the edge of town or out in the suburbs.

Renting a 1000$ apartment is not about luxury, its about necessity for many many people.

I disagree, but I'd just be repeating what I wrote earlier today, so I'll just leave it at that.

That's incredible!

I am not a wealthy man, but here's my breakdown for my family of 5:

food ~9600/yr
healthcare 6000-braces, and a sick kid
housing 5000
entertainment 1000
utilities 3500
insurance/pension 2500+what I can afford to contribute ~(5000)
apparel 2000-I don't use services
transportation 2000 (ten yr old car)
_________
36600

That pretty much takes up all my after tax income doesn't it?

I am a pretty serious handy man-I don't pay for services.

I do my own plumbing, roofing, electrical, etc. and the car-I don't like getting ripped off by theivery or shoddy workmanship.

Oh, we get our hair cut-that's it!

Drew

What is the incredible part of those numbers?

Remember, your food budget is much higher because you have more children than the average family.

You live in a much colder climate than most Americans so your heating bill is higher.

Your house costs you less than 40% of what it costs Americans...But you more than make up for it by having to spend a lot more on health care.

If only Americans would be willing to drop that transportation figure! You have realized the benefits of being economical in your travels, but Americans refuse to give up their big cars. Did you know that the average car loan is something like $26,000? It's crazy.

That's what is killing our budgets. We waste 20% of our income on easy motoring. Walking/biking instead of driving for short trips and downgrading to a smaller car (read more efficient) would do wonders for the financial health of the average middle class American.

But no, we are addicted to Car Culture and millions are going broke as a result.

As a side note, more women declared bankruptcy last year than graduated from college! There's just something so depressing about that statistic.

Yeah, but I like my cars better than I like my house.



The good news is, its easier to cure car culture as a way to mitigate against post peak decline then it would be to stop companies from making fertilizers and plastic trinkets.

I was thinking about all this debate about affordable housing, and it occurred to me that new standards of cohabitation may be in the future for many people.

In the lower middle class neighborhood where I live, where small bungalows now sell for $250 to 300K, some of the homes have been sold and are being rented out. The rent on these 3 bedroom homes is about $1600/month, not including utilities. These homes each have about 7 cars parked in front of them on a regular basis - that's how many adults live in each home, and there are a few children also. Some of the adults are related, some are friends, but they rent one home because that's the only way they can afford to live in the city. They moved to the city because there weren't any jobs in the smaller towns they left.