The Washington Post has an article about the struggling middle class. They focus on a family in the DC area that makes about 90K with a combined income. It relates honest-to-God tough issues that the family faces — a broken air conditioner, a broken dishwasher, concerns about paying the food bills. But then the article gets all muddy with some really questionable expenses — a $300 cell phone bill, music lessons for the kids, 3 flat screen TVs, a lap top for each kid. The wife orders the most expensive school photo package, rather than the bargain option. Sympathy for this family erodes.
26 thoughts on “Is the Middle Class Struggling or Spoiled?”
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Apt. 11d 
I’d guess that it’s not the one-time purchases that are the problem; it’s the normalization of $400/month (or more) for the “utilities” of wifi, cable, and cell phones. 20 years ago you could get away with $50/month for a home phone and basic (limited) cable. Pay for a home phone with an answering machine and deal with the frustrations of not being able to reach other people all the time. I recognize that it’s a genuine frustration and for some people can cause economic problems (employer not being able to reach them right away, etc.), but it seems crazy that this has become the norm.
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20 years ago, long distance used to be brutally expensive. I used to run up huge bills when I was in school in LA and calling WA all the time.
Per minute, it’s actually far cheaper now.
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Yeah, it was expensive. But here’s what you did (even me, and we were far from poor): you talked to your parents for 20 minutes once a week, and talked to even your closest friends once a month. And wrote letters! When my boyfriend and I were apart for the summer, we would wait until the rates changed at 11 p.m. and call each other then. One of my friends used the communal dorm phone in case of emergency, but otherwise did not even have a phone.
I’m sympathetic to the people with kids who have to use smart phones for school. This seems really stupid on the part of the schools, but there’s probably no way to control it. My point is that the required “utility” expense has gone way up in ways that people should attend to and possibly challenge.
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From that article:
“The couple spent the day before Thanksgiving price-checking turkeys at three stores.”
…and spent as much on gas as they saved.
“But reliable transportation was not a luxury, so in late February the couple bought a used 2012 Dodge Caliber. As a result, they’ve fallen behind in the electric bills for March and April.”
Lord knows, every car older than two years old is a piece of junk, right?
Dave Ramsey, stat!
“In the mid-1970s, the majority of Americans were in the middle, with 52 percent earning the equivalent (in today’s dollars) of $35,000 to $100,000. Today, according to census figures, the share of households earning under $35,000 is virtually unchanged, 35 percent. The shift has occurred in the other two categories. Households with incomes over $100,000 have doubled, to 22 percent, while less than 44 percent are in the middle cluster.”
Very curious. That’s the effect of double incomes, presumably.
“The Johnsons’ $90,000 income is higher than the national household median of $51,000, as well as the $66,500 median in Virginia. But in the broader Washington region that Culpeper is part of, where the median income is $88,000, the Johnsons are just about average.”
As I recall, it stinks on ice to be median income in the DC metro area.
“They married last October, blending their two households in the four-bedroom house Scott had bought in 1997 in Culpeper, a town of 45,000 about 75 miles southeast of the District. Scott restructured his mortgage just in time to pay for a wedding photographer.”
Good news:
He bought in 1997.
Bad news:
He “restructured” his mortgage in time to pay for a wedding photographer.
“I don’t care if we don’t eat next week, I’m going to get the kids’ photos,” he said. “That’s what you hold onto.”
Dude, do you own a camera? Use it.
With three kids, buying the biggest photo package for all of them will just about break you.
When I get school photos, I get the sibling one, so it’s both kids in the same picture.
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“For $90 a month, a satellite dish provides basic television service for their three flat-screen sets and for the WiFi connections Scott needs when he works from home.”
Their cable/internet package sounds not unreasonable, but three flat screens?
“They have one laptop and three iPads, and each girl has a computer in her bedroom. The bill for four cellphones runs about $300 a month.”
Holy cow!!!
“Like many American homeowners over the past several years, they got a break on the mortgage by refinancing to a lower interest rate, stretching the remaining payments from 14 years to 30. It cut the monthly payment almost in half, down to around $700 a month. The money was immediately sucked up.”
I hate the fact that they doubled the length of their mortgage, but these people have a fantastic deal on the house payment. With a $700 mortgage payment, they should not be struggling at all, although maybe their taxes are terrible.
“The air conditioner stopped working four years ago. The dishwasher is busted, too. The roof is missing a few shingles and leaks in a heavy storm.”
But we had to get the big photo package, didn’t we?
“Last month, Scott installed a hand-me-down cooktop given them by a friend who remodeled her kitchen.”
Good!
“Now the girls are developing an interest in music. Taylor is taking guitar lessons. Emily plays trumpet in the school band, which cost $100 to service last summer. Charlie has taken up the clarinet. The Johnsons bought her a used one from Craigslist but then had to buy reeds at $12 a box. Emily yearns to start track, which has an $85 registration fee.”
Maybe it’s time for the girls to develop an interest in babysitting and dog-walking?
“Her father regrets not getting his degree and is determined that his daughter will attend college. But he hasn’t set money aside. “I have my retirement account that I can tap for her college,” he said.”
Oy-yoy-yoy!
It’s a re-tire-ment account–that means it’s for your re-tire-ment. If it was a college savings account, it would be called a “college savings account.”
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I found myself feeling sympathetic towards them until I realized that Culpeper is really not DC suburbs, much farther away.
But as much as everybody piled on them about the cell phones and electronics, two of my kids go to a PUBLIC school where teachers routinely assign things during class that involve “looking things up on your smartphone” and one of these kids is in middle school. We’ve had teachers change the pick-up time for the field trip and text all the parents. It’s fun to be the parent whose child is waiting alone because you didn’t get the text.
My son’s orchestra conductor routinely changes practice times and updates the Google calender which you can’t access unless you have a smartphone. he has driven to rehearsal multiple times only to find out that he’s the only kid who didn’t get the alert on his smartphone (because until recently he didn’t have one!) The middle school has sent home strongly worded messages suggesting that people who don’t get their kids a smart phone aren’t committed to their child’s education.
And then there’s the one with learning differences at the private school where, honest to God, they created their own APP this year, and they expect kids to go online with a smartphone during class, go into the app and pull up worksheets,etc.
The public school workaround for my son without the smartphone was that he could leave class, walk to the library, sign out a laptop, and bring it back to class. It’s a very large school and he could easily miss ten minutes of class walking back and forth to the library.
In short, it’s pretty tough to “just say no” to the electronics, tablets, etc. even if you wanted to. We have had repeated conversations in our house where we have wondered how others are paying these outrageous fees every month and what they are giving up in order to do so.
it will get worse when they go to college — We visited one college where we were told that there was a shuttle between the two campuses and it’s just so great because they have an app that will text your child if the bus schedule has been changed. Or if you’re a bad mother, you could have the kid who stands outside in the rain for four years because he didn’t get the text, or the google calendar or whatever . .. .
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Another angle here is that this is a new blended family. I’m sure it’s very tempting to try to buy peace with bribes for the kids. Meanwhile, the roof is starting to fall in.
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This is the economic result of multi-generational DIVORCE.
Two sets of grandparents. Both sets divorced. Grandparents’ income supports four households, rather than two. Two original sets of parents. Both sets divorced. Parents’ income supports four households, rather than two. Remarriage reduces the households supported to three, if there’s some sort of joint custody and child support.
Divorce wipes out savings, and dissipates it by increased living expenses. Had no one divorced, the families in total would have had four households (his, his parents’, hers, her parents’.) Due to divorces, the families have _seven_ households. (Theirs, his ex, his mother’s, his father’s, her ex, her mother’s, her father’s)
Add in the loss of savings due to paying multiple lawyers. And the compounding loss of interest on said lost savings, and loss of interest on savings which would have resulted from lower living expenses.
Sure, the electronic toys and child expenses don’t help, but there are other, far greater losses. For one, the grandparents will not leave much to their grandchildren, in comparison to what they might have left, had they owned one paid-off house, together, for decades.
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I recognize that the family here has made some questionable choices (I think the car choice is worse than the electronics, although I sort of hope ‘iPad’ was short for ‘generic tablet). But in our household our income has gone up about 2% for COL raises (we have each received some merit/promotion stuff) while our other expenses have gone up 8-12% a year for the last several. We got a daycare hike, a utilities hike, gas is up, insurance is up, etc. Over time, that is what is eating at our budget little by little.
Although like a lot of families at our stage, right now daycare is twice our mortgage (wrap around for one kid, full time for the other). That’s our single biggest expense bar none, and although I am happy to be on the salary and experience grid as well as liking my job, it really makes the difference for us between _feeling_ middle class and not.
We overspend on activities, particularly martial arts and math camp. We do that because our kid is not thriving in the public school system and we think the former helps with self-discipline and a better peer group and the latter feeds his brain. But that does result in choices like “are we going to go to the cottage, or replace the dishwasher?” (Craigslist, ahoy. We also have healthy savings that predate our daycare bill but we do not go into them for either cottage rentals or dishwashers.)
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I was looking up the car and the first numbers I found suggested that it’s a $14k-$16k vehicle. Were it not for their generally bad economic situation, that would not be out of line for a $90k a year household.
It just sounds like they are no good at prioritizing (especially dad).
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Also, because I’m a bad person, I’m curious what the tab was for the wedding.
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I’m still stuck at “wedding photographer”–for a second wedding. Really? Does he still look at the pics from the first wedding?
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I vote for both struggling and spoiled.
I suspect that yet another angle is that the dad is used to funding a smaller household more lavishly, and he hasn’t quite adjusted to the fact that he’s got only a little more money, but considerably more mouths to feed.
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I think it’s very judgemental to juxtapose the photo package with the roof. They know, and so do you, that forgoing one would never go the slightest way towards paying for the other. There is no comparison. Also, this was written as a one-off splurge thing. Have none of you ever had a guilty splurge in the last year or two? Ever? The dad also said he wanted to splurge on that particular thing because it was photos of all the kids. It’s the opposite of consumerist spoiled-ness. He wants it for the intangible(? Not the right word, but can’t quite put my finger on it) value of having photos of the children. I think the finger-pointing on this topic is over the top. We’ve all had purchases that couldn’t be justified strictly in the family budget.
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It’s not just one splurge–check out their electronics collection and their monthly phone bill. It’s splurges all the way down.
He got the big school photo package and they used some of the proceeds from a cash-out refinance to pay for a wedding photographer.
It’s very a much a pattern–getting nice (but not totally necessary) things, and letting the utilities go overdue, the dishwasher stay broken, and the roof unfixed.
You can pay for a roof patch with about a $1,000 or so (that’s the number I think I remember when we were deciding whether to patch or replace).
I think sooner or later, the wife is going to get ticked off by all the good time Charlie carelessness.
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Here’s the thing….if you feel that to be comfortably able to afford your lifestyle, you need a household income of 167% of your actual household income….then you are in denial and need to modify your lifestyle pretty radically. If you’re at the median income for your area, you probably can’t afford to have 2 computers per person + cell phones for everyone + multiple costly activities per kid. Buy the cheap photo package. Eat less meat. Ditch the smartphones on at least some of the cell lines. The $85 registration fee or the once-per-year $100 for trumpet maintenance aren’t unreasonable. Clarinet reeds don’t add up very quickly, either, at ~$2 per reed. It’s not as if you need a fresh reed every day. But ongoing (weekly?) guitar lessons–one-on-one private lessons, in particular–are going to add up quickly. If your roof is going unfixed, you probably can’t afford private music lessons. (The 16-year-old could pay for them from some earnings of her own, if she wants them enough. Ditto for data plan for her phone, of course.) Having median income means not being able to afford everything, having to prioritize and choose. Retirement savings are more important than music lessons. If you want to have all these amenities, you might have to give up some family time and take the longer commute to the higher-salary job. Keep looking for that accounting job….but acknowledge that while you make ~$22K per year, you can’t afford to keep up with the Joneses…which is hard, when your husband’s previous lifestyle (~$66K/yr for himself and one daughter) IS the Joneses.
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Yes to pretty much all that.
I’d add that from the WaPo comment thread, it looks like this family is actually pretty much at the top of the economic heap in their particular far, far outer DC community. So, while their income would not be amazing in DC or in the close-in DC suburbs, it is really good where they live, as we can kind of tell from the mortgage payments mentioned.
Check this out:
“The median income for a household in the town was at a time $35,438, and the median income for a family was $41,894 but due to the economic downturn this has changed. Males had a median income of $28,658 versus $25,252 for females. The per capita income for the town was $16,842. About 23.0% of families and 26.9% of the population were below the poverty line, including 40.8% of those under age 18 and 22.1% of those age 65 or over.”
http://en.wikipedia.org/wiki/Culpeper,_Virginia
“Keep looking for that accounting job….but acknowledge that while you make ~$22K per year, you can’t afford to keep up with the Joneses…which is hard, when your husband’s previous lifestyle (~$66K/yr for himself and one daughter) IS the Joneses.”
Very, very true. I think that previous lifestyle is probably the root issue–they haven’t quite come to terms with the fact that the five of them can’t all live at his old standard of living.
Our family had a somewhat similar transition when we started having kids. As carefree young marrieds, we ate out A LOT and it wasn’t much of a problem as it was our only major expense and it was just us. But later on, even with more income, we simply couldn’t afford to continue the same lifestyle as our other expenses grew and the kids got to the point where they were each able to put away a lot of chicken satay.
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They are either really, really hard on their home or they need to go after the builder or both. The house was built in 2000, but the roof is leaking, the dishwasher is broken and the AC doesn’t work. Don’t they do ANY maintenance? It just seems like something else is going on here.
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It says he bought the house in 1997, so it is not totally crazy to be having some issues at this point. Dishwashers, especially, don’t last long.
However, point taken that he seems unfamiliar with the concept of maintenance. I’ve known people like that, who just don’t seem to get that things (especially houses) need to be taken care of. That sort of person often loves new stuff and finds taking care of old stuff boring.
Also, come to think of it, the price of an iPad pretty much covers a new dishwasher.
I guess a lot depends when his divorce was and how big a financial hit he took on it. (This featured couple has only been married since this past October, so the house maintenance stuff is on him rather than on them.)
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The roof is more important than the AC or the dishwasher. Frankly, with three daughters, the dishwasher should be at the bottom of the list. Water damage is far more expensive than replacing the dishwasher or repairing the AC. Mold is not your friend.
They have a good income. They need help creating a family budget, and sorting out their wants vs. their needs.
I wonder if there isn’t some traditional gender role bias going on? Imagine the daughters were sons. Would the family expect sons of the same ages to secure part-time work outside of school? I think they would. Would the father or the mother take the time to teach the children their own valuable workplace skills, i.e. computer programming and accounting? I think they would.
A child who can do programming could earn enough to pay for a music hobby. She could do the same with babysitting, as well, but computer skills are more valuable.
It is silly to drive to different stores to compare prices on turkey, when they have four computers and web access at home. It is silly to pay for the largest school picture package, when they have phones with cameras–and likely their own cameras as well. They are not using the resources they have effectively.
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Cranberry said:
“Mold is not your friend.”
Oh my gosh, yes.
“A child who can do programming could earn enough to pay for a music hobby. She could do the same with babysitting, as well, but computer skills are more valuable.”
And it sounds like dad could teach them.
“It is silly to drive to different stores to compare prices on turkey, when they have four computers and web access at home. It is silly to pay for the largest school picture package, when they have phones with cameras–and likely their own cameras as well. They are not using the resources they have effectively.”
Yep.
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I had the same thoughts as I do when I read about welfare recipients with their iPhones, but with the added annoyance of speaking randomly about expenses without showing actual budgets. Maybe the family doesn’t have an idea of a budget and what they’re spending their money on, and they should. But that’s the real question here, whether expenditures (and savings for the future and for emergencies and maintenance) exceed income, and what they plan to do about it. Otherwise the article is just comment bait for people complaining about other people’s spending priorities. I don’t care whether they buy a dishwasher or an iPad or a turkey or the most expensive school picture package and, I think it’s important for them to figure out how they prioritize those expenses (not me).
Also, although I think they can live on their income, I am less sure about whether 90K can also provide health care, education, and retirement for a family of five, given the increasing expense of all of those things while still providing a “middle-class” life, especially when the savings for those deferred/emergency expenses is voluntary.
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It’s not going to provide retirement if the retirement account gets treated as a cookie jar that you reach into for other needs. (The dad was talking about using his retirement to pay for daughter’s college.)
I’d like to see a series of PSAs devoted to the theme, “Your retirement account is for RETIREMENT. It’s not for saving a house downpayment, it’s not for paying for kids’ college, it’s not for paying off debt. Don’t touch it unless you are going to go hungry otherwise!”
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I think their budget is too tight to live the “middle-class” life they they want with one on one music lessons etc. They probably take home around $4k a month after taxes and insurance. They are spending $700 on mortgage, probably $350 on taxes. Add another $300 for utilities, plus $400 for phone & cable. Then there is food – $1200 for 5 people seems reasonable. Plus the car, gas and insurance, say another $700 a month. That only leaves about $350 for other items, and doesn’t the wife have student loans?
Like bj, I can’t talk to their priorities, but they don’t have much room for anything to go wrong or any luxuries. I don’t think they are spoiled, they are struggling. (And, as anonymous said, not getting the big photo package isn’t going to change anything.)
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On reflection, I think it was rather insightful of the mom to mention $150k as what it would take them to live on (maybe it’s her accounting background?). I think that’s pretty close to the level that they are currently living at.
As bj has mentioned in other threads, thanks to TV and other media, people don’t have a good sense of what sort of lifestyle different incomes can actually provide.
Related:
http://thoughtcatalog.com/stephanie-georgopulos/2011/06/carrie-bradshaws-budget-in-real-numbers/
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Example:
When we lived in DC, I was once seriously considering a $10k a year half-day preschool, which would probably have swallowed up somewhere between 15-20% of our gross income. Crazy, but it seemed normal at the time and place. Fortunately, my husband didn’t let me do it.
We went with the city co-op, which was about $100 a month, or about 10% of the price of the fancy pants artsy preschool I had been drooling over.
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