Trying to understand

amother

Green

Thu, Jun 25 2015, 11:00 pm

I did not grow up wealthy. Nor are we wealthy now. We are/were definitely middle class. My experiences seem to be so far removed from people on thi site. For example, people on this site talk about eating meat or chicken as a luxury. Nobody seems to have cleaning ladies. People dont buy pizza. People dont buy plastic goods. People dont have couches. I have read comments that $4000.00 a month is a good salary.

My kids go to a school where there ared definitely many wealthy people. Still, the majority are not. We all pay full tuition, have cleaning ladies, go on vacations, have bugaboos, buy our chilren nice clothing, send the kids to extra curricular activities, go out to eat, go to bungalow colonies, buy as much meat and chicken as we want, etc....
Pretty much, my whole life, the people I am around live like this. Not necessarily wealthy, but never lacking. The way I see it, jews in general are at least middle class. Why is it on this site, I am constantly reading about people who cant even afford groceries? If such people are so rampant, why dont I know any of them? Lately I have really been wondering about this.

amother

Indigo

Thu, Jun 25 2015, 11:17 pm

amother wrote:

I think you live in a wealthy neighborhood and must not get out much.

amother

Azure

Thu, Jun 25 2015, 11:24 pm

Quote:

Maybe you have a misconception of what is considered middle class? (And it probably also depends on where you live.)
We make $42,000 a year with two kids. That's considered middle class.
I have no cleaning lady, pay minimum tuition, don't eat meat or chicken during the week unless it's leftovers from Shabbos, don't use paper goods and buy pizza about once in three months. I do have a couch though.

And we are still in debt. I'm not sure how it is so hard to understand. Our basic expenses outweigh our income.

Approximate yearly expenses -
Tuition: $7500 (total for 2 kids)
Mortgage+taxes+insurance: $14,400
Health insurance: $2400
Food+household items: $500 a month x 12 = $6000
Car insurance: $1200
Electricity: $2400
Gas (for car): $2500
Life insurance: $800

That's already $37,200 and that's not including any clothes, entertainment, health costs and just general spending money.

I don't know how that leaves room for much anything else.

zaq

Thu, Jun 25 2015, 11:33 pm

For the same reason that you aren't hobnobbing with people who own yachts, horses, and homes on several continents. People who cannot afford chicken cannot afford to live in your neck of the woods, send their children to your children's schools, summer in your bungalow colony, or shop in the stores you frequent. And if they won a raffle grand prize of a house in your neck of the woods, they couldn't afford to maintain it, nor could they afford to live the way you do. They would be ashamed of their cheap clothing, their inability to make their dd a bat mitzvah party on a par with the others in the area, the fact that everyone goes to bungalow colonies and their dc stay home bored out of their gourd because all the other kids in the hood are in camp or Israel or the bungalow.

"Jews in general" are not middle class. The Jews YOU KNOW are in general middle class because you are middle class, and that's whom you associate with. If you were a kollel wife living on WIC, you would most assuredly know lots of families doing the same.

WriterMom

Thu, Jun 25 2015, 11:36 pm

So, the median wage is $50k in the US. That's your $4k a month, right there. If you have two incomes at the median, that's $100k. The New Yorker ran a piece more than a decade ago about "going broke in NYC on $100k," and the author was not paying for Jewish schools for a large family.

If you're in or near a large city, housing will eat up a sizeable chunk of $100k. Health insurance, if you don't have good coverage at work, can be into five figures, particularly if you have a larger family and want high coverage, say if you have family members with chronic health problems and don't want to worry about a huge deductible. Now in this day and age, to get a good job often requires an education that involves student debt. Getting to that job takes a car, and often getting the kids to their activities requires another. (If you live in NYC, no car, but the real estate premium probably eats that savings.)

All our close family lives far away, so we travel to see them reasonably often. Maybe it's a luxury; to me it's a necessity, and it's not cheap. Also, we put a good chunk away for retirement, because we're not willing to rely on the state or impose on our children to take care of us down the road. What that translates to in reality is that we're above the median, and yet do not live a wealthy lifestyle by any stretch. No holidays, ever, beyond visiting my family. No housekeeper or 'help'. No bugaboo, no bungalow. No Coach purse, my shoes are from Payless, etc. We don't have to ration meat and chicken, and the kids have extra-curriculars, because those are priorities for us, over holidays or bungalows or expensive strollers. I do not feel poor, but I certainly do not feel wealthy (financially.)

I hear what you're describing, and I think you live in a bubble. That's ok! It's not a criticism. It sounds like a lovely bubble, and it speaks well of you that you're interested in what's outside it. But it's not normal, in the statistical sense. Most people don't live like you do.

ETA: whoops: the median *household* income is $50k. So I am much more privileged, in relative terms, than I had realized. And the OP is vastly more so. Again, not a criticism at all, but it's a good thing for all of us to realize how well off we are, in the greater scheme of things.

zaq

Fri, Jun 26 2015, 12:05 am

FTR, most people tend to think they are "average", and a family income of $114,000 is the upper limit of what is considered "middle class" in NY State. (It varies by state). (http://www.businessinsider.com/middle-class-in-every-us-state-2015-4)Needless to say, it's a very different middle class from the middle class with a family income of $38,246, which is the lower limit of middle class in the same state. So if azure has an income of $42K, they are lower-middle class. But the cost of living is so much higher for observant Jews, between the cost of kosher food and religious school tuition, to say nothing of the supply-and-demand effect the need to live walking distance from a shul has on housing prices, that a frum family living on $42K is enjoying nowhere near the standard of living of a middle-American family with the same income. Your windowless basement in Lakewood or Brooklyn could buy you a three-bedroom house in Cracked Windshield, Wyoming, but you can't live in Cracked Windshield, Wyoming.

Those of you who know wealthy people who live the way you do, learn the concept of "living below your means." Just because people have money doesn't mean they have to squander it. Some people live up to their means in order to keep up with the Goldbergs, but don't save a cent. This is not wise. Some people live way beyond their means, which is even less wise. Some people wisely live considerably below their means, choosing to live near the Goldbergs when they could live near the Rothschilds, and save the difference, invest it or give it to charity.

MagentaYenta

Fri, Jun 26 2015, 12:14 am

zaq wrote:

...
Those of you who know wealthy people who live the way you do, learn the concept of "living below your means." Just because people have money doesn't mean they have to squander it. Some people live up to their means in order to keep up with the Goldbergs, but don't save a cent. This is not wise. Some people live way beyond their means, which is even less wise. Some people wisely live considerably below their means, choosing to live near the Goldbergs when they could live near the Rothschilds, and save the difference, invest it or give it to charity.

I live in an area where most folks live well below their means without sacrificing a quality of life. But that is a major reason why I moved here. People at my schul don't spend their time counting the money of others. There are a group of us who travel together locally, we all kick money into a pot so that if someone is short that month they don't have to miss the adventure. It all evens out in the end.

Most of the younger families seem to be making it without a lot of the material items that are a given in some communities.

MagentaYenta

Fri, Jun 26 2015, 12:52 am

WriterMom wrote:

So I'm going to go out on a limb that you're not in NYC, DC, TA, London ... Smile

NTTAWWT. But sometimes the job market/other considerations mean you live in a place that's a big financial burden.

I moved to the Pacific NW with my family 24 years ago from Los Angeles. We chose the location because I could still be employed while we got our farm up and running. My husband was a SAHD. Like most farmers it takes at least one income to survive in our case we found a niche in an area where small farms could turn a profit. Naturally we did our research.

sequoia

Fri, Jun 26 2015, 1:11 am

Wow. The hedge-fund managers I know don't have full-time help or many of the other things you mention.

I guess my friends really do live below their means. I'm poor, and their lifestyles seem luxurious to me. They do have cleaning ladies, go to Europe and Caribbean several times a year, etc. But nothing like you're describing.

Without kids or an abiding love of Apple products, one can live on very little, even in NYC.

amother

Green

Fri, Jun 26 2015, 1:34 am

Thanks for all the replies. I guess I didn't realize that over $114,000 a year is not middle class. We are obviously all making more than that. My parents probably make about $200,000. They actually live below their means.

It still doesn't really explain how everyone in my life automatically "makes it." For example, we are three married siblings. All in our upper twenties, low thirties. We all make over a $100,000. I don't even work and we make that anyway. So does my brother. (Although his wife works too.) I am not surprised that we all do okay financially. To me, it was kind of a given. You get married, learn a couple months to a couple of years. Start working and make over $100,000 within a couple years. Again, not becoming wealthy, but all of us being comfortable. Why is everyone in my life like this? (we all live in Brooklyn btw)

MagentaYenta

Fri, Jun 26 2015, 1:38 am

amother wrote:

Because you live in a small world. A bubble. I live in a bubble too, but it's quite the opposite of the one that you live in. It all can't be Lake Woebegon.

SRS

Fri, Jun 26 2015, 2:02 am

OP, knock on the door of one of the local Rabbis, school tuition committee people, or accountants and ask them what they see in your very own community and you will find out that you are keeping a very small social circle. While you are knocking on the accountant's door, ask about savings rates. Full time help and bungalows is at the expense of something. I think you probably underestimate the amount of debt that people pay, vendors that go unpaid, and lack of savings. That, or there is a slave colony in your neighborhood. These things are not readily available to most.

zaq

Fri, Jun 26 2015, 2:36 am

Congrats, OP--your parents are in the top 5% of households, income-wise. yep, only 5% of American households make more than $200K. And you are young. By the time you are your parents' age you will probably be making considerably more than they do. So you see, you-all may not be rich compared to the Warren Buffets and the Bill Gateses of this world, but you are definitely NOT middle-class. In fact, you grew up wealthy.

I would be interested to know how a yungerman with no college manages to make over $100K within a few years. The people I know who make that kind of money either have master's degrees and have been working for 30 years, or have professional degrees like dentistry, law or medicine.

amother

Green

Fri, Jun 26 2015, 5:35 am

zaq wrote:

First of all, all six of us have college degrees and masters degrees (or the equivalent.) I used to use mine, but I don't anymore. My dh is the only one who only has a bachelors degree and not higher. He doesn't use it though, he opened his own businesses. My mom does not have a degree, and still makes about 70,000 a year. My grandma does not have a degree and makes about 80,000 a year. Like I said, it's just a given to us that if you work hard, you make money. I guess I should just count my blessings.