Lmfao at this article, these people aren't middle class...
$2450 a month (30k!! a year) on child care because both are working?
$2000 a month (24k!! a year) on preschool to give their kid a leg up on going to a $35k a year grade school & high school?!?
$70 per DAY on food because you can't be arsed cooking?
They factor in 8K for vacations and another 6K per year for date nights?!?
And then it ends with this stunner:
> According to the U.S. Census Bureau, less than 5% of households earn $350,000 or more a year.
> While $350,000 might sound like a lot of money, it’ll go quickly when you’re raising a family in an expensive city. We all deserve to live a middle-class lifestyle. Unfortunately, we’ve first got to sacrifice more than ever to get there today.
Uhhh if only 5% will achieve that level of income you might need to ask yourself if it is really middle class....When people talk about "out of touch coastal elites" this is the type of shit they're talking about.
The childcare figures are actually pretty in-line.
In our area (bay area suburbs), daycare for a 2-year-old is around $2000 a month excluding any extra babysitting. Preschool for a 4-year-old is around ~$1800. I can see how within SF proper they might be higher.
Our preschool in the Bay Area was around $1200/month, but there were many places that were higher. Believe me when I say that the Bay Area is insanely competitive in every way. This is why we moved out.
I don't doubt any of these expenses, and this hardly seems like a lavish lifestyle... but at the same time, $38k in 401k contributions is hardly middle class. Especially when the median household income in the US is $59k per year.
If you plug that $38k in 401k deductions, and then add say another $10k in employer contribution, assuming you have two parents at age 30 who plan on working for the next 35 years, and who have, to date contributed $10,000 total to their 401k you end out with a $9.0m retirement fund at age 65, assuming a 7% annual growth rate. Going by the 4% withdrawal method you get a $360k annual retirement income which seems a little high.
Looking at the breakdown it all makes sense, and I don't fault them but at the same time I agree with you and don't think the middle class of the country has ever lived that well.
Vacations that require plane travel twice a year? Going out to concerts and ball games for regular date nights? Life Insurance?
AKA "Eating at restaurants every day and spending hundreds of dollars on new clothes every month while employing someone else full time to watch your kids gets expensive."
Spending $70/day on food is not normal middle class living. Go to the grocery store once in a while.
> The parents’ ultimate plan is to send both children to private grade school
If you think you can eat out with a family of four for $70/day in the city, you are sorely mistaken.
When I eat downtown with my family the bill is rarely below $100 with tax and tip for dinner, and that’s a single meal, with no drinks (tap water), and no dessert.
Even some place like B.GOOD (higher quality fast food) is going to be $50 unless it’s a “Kids eat Free” night.
I didn't read the piece but suspect there is a conflation of "middle class" with what might be better called "professional class"- 2 working parents in high end white color jobs in high demand locations in high demand cities who tightly manage their time.
$350k is at the very low end of this professional class with multiple kids. Kids, and proximity to good schools, get very expensive, very quickly.
Housing: properties that can fit families- but where kids need to share rooms- in demand areas sell for $2M. Look it up. Mortgage on that is $10k/month. Rents are equivalent.
Childcare: a babysitter off the books for one kid is minimum $20/hour. With multiples, and a baby requiring full time attention, plan for $1k/week. Don't forget the bonus.
Food: at Whole Paycheck, the only supermarket in high demand areas, with picky kids, it's basically $5/person/meal. A 4-5 person family is $60-$75/day, $2k/month. Meals out with the kids anywhere in that neighborhood are going to be $20+ entree, $10+ appetizers, $10/dessert, $10/beer. Family of 4-5 can easily get to $200, including tip. Twice a month and that's $6k/year.
So with just those "basics" you're already at $120k + $50k + $30k = $200k post tax expenses, so $350k pretax. No private school, no vacations, no cell phones, no savings, no incidentals.
Note that in the context of these areas, this "professional class" is absolutely "middle class" in relative terms. "Upper class" in these areas will be the numerous families with assets and incomes above $1M.
Nit. Actually picky kids only want plain hot dogs and plain quesadillas and plain spaghetti. The ingredient cost of feeding picky children is a few cents per meal even after you add childrens' multivitamins and smoothies.
I think y'all have lost your minds on these food prices. $50 gets you two 16oz steaks (two adults can each eat steak for lunch AND dinner with that) and 15 or 20 _pounds_ of fresh vegetables easy at whole foods in the 94107 zip code according to Prime Now. And that's on top of the million servings of dry grains you can buy for a dollar. $50 every day? You're killing me.
CNBC has a very upper class idea of what they think middle class life is like. Weekly date nights, $6000/ year on Netflix or similar, $7800 annual vacations? Most people canct afford any of those, let alone all 3 every year.
> While $350,000 might sound like a lot of money, it’ll go quickly when you’re raising a family in an expensive city. We all deserve to live a middle-class lifestyle. Unfortunately, we’ve first got to sacrifice more than ever to get there today.
Then don't live in a big city (read: SF, NYC). Not everyone should, nor deserves, to live somewhere just because they want to.
Hell, even in some of the bigger ones, like Phoenix, you could buy a giant home + drive to work in a Tesla for that type of salary.
> A Bay Area Rapid Transit janitor who makes $234,000 plus $36,000 in benefits marries a Bay Area Rapid Transit elevator technician who makes over $250,000 in salary and benefits. Together, they’d make well over $350,000.
What? This is unbelievable. But if true, makes us all contemplate our career choices.
Seriously! I think I could move back to America, to a poop-stricken dump like the Bay Area and repair elevators for a quarter-million dollar salary. Live in a customized van or mobile home for 2 years, then take all that money and buy real estate across SE Asia.
>Recommendations for a better life
>If you’re one of the many families struggling to get ahead in >an expensive city on a high salary, here are five >suggestions:
>1. Limit your household income up to $321,451 after all >deductions.
The solution is your money problems is to make less money. :facepalm:
I learned a long time ago that food is the number one thing I foolishly spent my money and wondered where all my expenses were going. Not much can be done about the preschool costs (I feel the pain there), but the very least you can do is create a food budget, go to the grocery store, meal-prep, and replace common expensive things like coffee/smoothies and make them at home. After about a few months of adjusting to new behavior constraints you start to optimize and learn new habits that turn out to be more comfortable to work with. (Bonus: I now enjoy cooking). If you still enjoy the odd day going out somewhere to work, never leave home without a tumbler or some canteen of some kind.
Ok, these costs are a bit incorrect. The actual housing cost is much much much higher: not just 4k, but roughly 16K (190K per year) per month for 2.8 million dollar house where you need to pay just 38K per year property taxes. And if you don't live on the penninsula or are willing to move into some high crime areas, you can even find a house for less than 2 million dollars.
All the other costs are much higher than they need to be. You don't have to spend 70$/day on food, even here in the bay area. If you're really smart with money and eat a lot of oatmeal, beans, rice and onions, you can get your cost down to less than 30$/day for a family of 4, even here in the bay area! Vacations, aren't really needed - that's a luxury, same for clothes.
So, if you calculate it for real, you'll find the biggest costs by far are housing and day care which account for about 70%+ of the budget.
2200 on food per month, utter nonsense. 380 on baby kit per month for children in preschool? Nonsense.
Recently moved to SF with family of 4, combined income of about 130k less than this and living well including private elementary schools and preschool.
Don't need a car here, even with a family.
We furnished our place with a bunch of stuff folk were giving away for free
I figured it out! It's an article designed to funnel traffic to the author's blog site by using outliers (like the janitor) as clickbait. Other commenters pointed out that this is partly absurd expectations of what middle class is and partly the absurd reality of bubbles like SanFran.
I looked at the author's blog financial samurai and my impression was that all articles, including this one, were designed to sell the idea of investing in houses in what it calls the heartland of america with a crowdsourcing platform the owner probably owns called fundrise.com
This almost seems like a hit piece that’d be written by my rural Appalachia in-laws that cry out in amazement that I don’t get multiple acres and a water supply for a $500k property instead of a studio apartment and believe that everyone makes much more money just by moving to the city.
Articles takes the cities with the most extreme living expenses, and tries to say those costs are representative. Some of the "big cities" are smaller than places like Houston and Dallas where you can live a middle-class lifestyle very inexpensively.
[+] [-] yocheckitdawg|6 years ago|reply
$2000 a month (24k!! a year) on preschool to give their kid a leg up on going to a $35k a year grade school & high school?!?
$70 per DAY on food because you can't be arsed cooking?
They factor in 8K for vacations and another 6K per year for date nights?!?
And then it ends with this stunner:
> According to the U.S. Census Bureau, less than 5% of households earn $350,000 or more a year.
> While $350,000 might sound like a lot of money, it’ll go quickly when you’re raising a family in an expensive city. We all deserve to live a middle-class lifestyle. Unfortunately, we’ve first got to sacrifice more than ever to get there today.
Uhhh if only 5% will achieve that level of income you might need to ask yourself if it is really middle class....When people talk about "out of touch coastal elites" this is the type of shit they're talking about.
[+] [-] garyiwu|6 years ago|reply
In our area (bay area suburbs), daycare for a 2-year-old is around $2000 a month excluding any extra babysitting. Preschool for a 4-year-old is around ~$1800. I can see how within SF proper they might be higher.
[+] [-] adamredwoods|6 years ago|reply
[+] [-] seem_2211|6 years ago|reply
If you plug that $38k in 401k deductions, and then add say another $10k in employer contribution, assuming you have two parents at age 30 who plan on working for the next 35 years, and who have, to date contributed $10,000 total to their 401k you end out with a $9.0m retirement fund at age 65, assuming a 7% annual growth rate. Going by the 4% withdrawal method you get a $360k annual retirement income which seems a little high.
[+] [-] imesh|6 years ago|reply
Vacations that require plane travel twice a year? Going out to concerts and ball games for regular date nights? Life Insurance?
[+] [-] closetohome|6 years ago|reply
[+] [-] ebg13|6 years ago|reply
Spending $70/day on food is not normal middle class living. Go to the grocery store once in a while.
> The parents’ ultimate plan is to send both children to private grade school
Are you kidding me?
[+] [-] zaroth|6 years ago|reply
When I eat downtown with my family the bill is rarely below $100 with tax and tip for dinner, and that’s a single meal, with no drinks (tap water), and no dessert.
Even some place like B.GOOD (higher quality fast food) is going to be $50 unless it’s a “Kids eat Free” night.
[+] [-] fuzz4lyfe|6 years ago|reply
[+] [-] garyiwu|6 years ago|reply
The $1200/month for entertainment/clothes/charity do seem a bit much if they leave you with a net cashflow of only $100/month.
[+] [-] jonahbenton|6 years ago|reply
$350k is at the very low end of this professional class with multiple kids. Kids, and proximity to good schools, get very expensive, very quickly.
Housing: properties that can fit families- but where kids need to share rooms- in demand areas sell for $2M. Look it up. Mortgage on that is $10k/month. Rents are equivalent.
Childcare: a babysitter off the books for one kid is minimum $20/hour. With multiples, and a baby requiring full time attention, plan for $1k/week. Don't forget the bonus.
Food: at Whole Paycheck, the only supermarket in high demand areas, with picky kids, it's basically $5/person/meal. A 4-5 person family is $60-$75/day, $2k/month. Meals out with the kids anywhere in that neighborhood are going to be $20+ entree, $10+ appetizers, $10/dessert, $10/beer. Family of 4-5 can easily get to $200, including tip. Twice a month and that's $6k/year.
So with just those "basics" you're already at $120k + $50k + $30k = $200k post tax expenses, so $350k pretax. No private school, no vacations, no cell phones, no savings, no incidentals.
Note that in the context of these areas, this "professional class" is absolutely "middle class" in relative terms. "Upper class" in these areas will be the numerous families with assets and incomes above $1M.
[+] [-] ebg13|6 years ago|reply
Nit. Actually picky kids only want plain hot dogs and plain quesadillas and plain spaghetti. The ingredient cost of feeding picky children is a few cents per meal even after you add childrens' multivitamins and smoothies.
I think y'all have lost your minds on these food prices. $50 gets you two 16oz steaks (two adults can each eat steak for lunch AND dinner with that) and 15 or 20 _pounds_ of fresh vegetables easy at whole foods in the 94107 zip code according to Prime Now. And that's on top of the million servings of dry grains you can buy for a dollar. $50 every day? You're killing me.
[+] [-] bsg75|6 years ago|reply
As this chart from the article, SF is an outlier, only bested by NYC: https://fm-static.cnbc.com/awsmedia/chart/2019/8/22/salary%2...
[+] [-] tomatotomato37|6 years ago|reply
[+] [-] unknown|6 years ago|reply
[deleted]
[+] [-] gamblor956|6 years ago|reply
[+] [-] s3r3nity|6 years ago|reply
Then don't live in a big city (read: SF, NYC). Not everyone should, nor deserves, to live somewhere just because they want to.
Hell, even in some of the bigger ones, like Phoenix, you could buy a giant home + drive to work in a Tesla for that type of salary.
[+] [-] NTDF9|6 years ago|reply
What? This is unbelievable. But if true, makes us all contemplate our career choices.
[+] [-] CapricornNoble|6 years ago|reply
[+] [-] vm2196|6 years ago|reply
>1. Limit your household income up to $321,451 after all >deductions.
The solution is your money problems is to make less money. :facepalm:
[+] [-] nyxtom|6 years ago|reply
[+] [-] thorwasdfasdf|6 years ago|reply
All the other costs are much higher than they need to be. You don't have to spend 70$/day on food, even here in the bay area. If you're really smart with money and eat a lot of oatmeal, beans, rice and onions, you can get your cost down to less than 30$/day for a family of 4, even here in the bay area! Vacations, aren't really needed - that's a luxury, same for clothes.
So, if you calculate it for real, you'll find the biggest costs by far are housing and day care which account for about 70%+ of the budget.
[+] [-] lappet|6 years ago|reply
[+] [-] dx7tnt|6 years ago|reply
[deleted]
[+] [-] lynchdt|6 years ago|reply
Recently moved to SF with family of 4, combined income of about 130k less than this and living well including private elementary schools and preschool.
Don't need a car here, even with a family.
We furnished our place with a bunch of stuff folk were giving away for free
We eat well, sometimes out.
[+] [-] DrWumbo|6 years ago|reply
[+] [-] drKarl|6 years ago|reply
[+] [-] devonkim|6 years ago|reply
[+] [-] whenchamenia|6 years ago|reply
[+] [-] bdcravens|6 years ago|reply
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[+] [-] madengr|6 years ago|reply
[+] [-] phonethrowaway|6 years ago|reply