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Thursday, April 22, 2010

Gauging Your Middle-Class-ness

I saw an article recently about “How to Gauge Your Middle-Class Status”.  I found the whole thing very interesting.  In some ways, we measure up --- in some we don’t --- and in some we over-achieve. 
We’re big fans of Dave Ramsey at our house – and, like him, we don’t strive to be “normal”.  Normal in America is broke, living on the edge, paycheck to paycheck.  We have no desire to live like that.  So, I guess it shouldn’t surprise me when I look at an article like that and we’re not normal. 
Here’s a brief run-down of what they looked at:
Income:  $51,000 - $123,000 --- yeah, we’re in there somewhere
Housing Cost:  House worth $231,000 --- yep, we’re in that range too
Mortgage = $17,600 --- Are you kidding me??? Nope – we’re way under that --- and we’ve only got about 7 years left on our mortgage.  No, we didn’t take out this mortgage eons ago.  We followed Dave’s advice and only took a 15 year mortgage. 
Home Size:  2,300 sq ft --- we’re smaller than that --- but we’re only a two person household.  How much space do two people need??
Medical Expenses:  $5,100 annually --- we are fortunate – we have excellent insurance, and although we pay a portion of the premium, we’re significantly under on this one too.
Cars:  $12,400 annually shelled out.  Baby, we are way under that.  Mostly because of Dave again.  We have no car payment.  None.  Average value NEW of the car:  $45,000.  I don’t know what to do with that part.  Yeah, sure, when the car was new, it was $45,000 – but 15 minutes after you drive it off of the lot, its value starts dropping like a stone.  I don’t know how that figures into anything, really.
College Savings:  $4,100 per child.  Who are these people kidding?? Really?? I don’t think you can attend community college for a year on that.  We’re past that season of life, so we don’t stash money away for this- -- so I really have no comparison point on this one. 
Vacations:  One week at the beach or other tourist destination --- yeah we take a week  -- and then some…  Cost:  $3,000 ---- What???  On one week at the beach?? What are these people doing??
Retirement Savings:  3.2% of income or $2,600 annually.  Nope – we are so not normal on this one either.  We save like squirrels.  We’re not quite at the 15% that Dave recommends, but we’re creeping up on it quickly. 
Everyday Spending:  $14,200 for clothes, food, utilities, entertainment, etc.  Again, we are way under this one --- probably how we’re able to be so far over on the savings item??
Number of Earners:  2 --- yeah, that’s us.
Hours Worked:  3,747 annually  --- Geez, divided by 2 workers in the family – divided again by 50 or so weeks --- that’s about 37 hours a week.  Yeah, that’s us, most of the time.
Education:  High School diplomas and about 2 years of college.  Nope --- we both have degrees that provide us with our jobs/income.  We value education and continue our own learning every chance we get.
Household Net Worth:  $84,000 --- wow – gotta wonder about this one --- especially if you go back and run the numbers about the value of the house, the college savings, retirement savings, etc.  We’re not at all normal on this one --- good thing.
Debt:  18% of disposable income goes toward debt in the “normal” middle class family.   They do include the mortgage in that --- which confuses me --- run the numbers again --- average income (take the mean) and the average mortgage payment annually --- it doesn’t come out mathematically.  Unless you’re telling me that everyone in America is now listening to Dave Ramsey and has no debt other than their mortgage??   Nah, that wouldn’t be normal.