7 things the middle class can't afford anymore

[Mai72]

Wondering how many of these you could afford if you weren't paying $50-100/month for a cell phone with 4GB data/unlimited texting and $150-200/month for cable/satellite and home internet...

A brand new Civic LX is $18500 which should be around $330 month. There are other cheaper cars like a Nissan Versa, Chevy Sonic and Kia Rio as well.

Americans want the good life, and they are willing to do anything to get it. I've had people tell me that the government will take care of them when they get older. That means the taxpayers.

The issue is most people aren't willing to make the sacrifices necessary to secure a better future. Most would rather live in fear and insecurity than give up their iphone 6, big screen tv, and designer clothes.

 

[xBiffx]

For most people if you're smart you should probably be paying down your debts to the exclusion of almost everything else, at least savings and finance wise. Chances are their debt is at a considerably higher APR than whatever return they are getting from their retirement accounts, etc. Of course individual circumstances vary.



I think it's extremely informative. From everything I know people do not forego vital services to decrease their credit card balance. If you are in financial distress you make the minimum payment.

Therein lies the rub and is exactly the problem I mentioned in my OP. People have been spending beyond their means for years. How smart is that.

I have to just assume some of this same "smart" people recognize the problem and then treat it with an equally "smart" solution like cutting off vital services. To assume the opposite would be an insane argument.

 

[BoberFett]

Can the mods add a script that just replaces everything Dave posts with "I'm a moron"? It would save everyone a lot of time.

 

[fskimospy]

Therein lies the rub and is exactly the problem I mentioned in my OP. People have been spending beyond their means for years. How smart is that.

It wasn't very smart at all! Well, for the most part.

As with many things it also depends on what kind of debt you're talking about. Technically someone with a mortgage is extremely indebted, but since it's backed with assets it's just fine for most people. $300k in mortgage debt is fine for a lot of people. $300k in credit card debt is fine for almost no one.

US credit card debts and such have decreased significantly in recent years. The economy as a whole was way too heavily leveraged before and so that's a positive thing. The middle class still faces lots of problems, I just found Dave's article to be silly and over the top. (and based on tenuous facts)

 

[xBiffx]

It wasn't very smart at all! Well, for the most part.

As with many things it also depends on what kind of debt you're talking about. Technically someone with a mortgage is extremely indebted, but since it's backed with assets it's just fine for most people. $300k in mortgage debt is fine for a lot of people. $300k in credit card debt is fine for almost no one.

US credit card debts and such have decreased significantly in recent years. The economy as a whole was way too heavily leveraged before and so that's a positive thing. The middle class still faces lots of problems, I just found Dave's article to be silly and over the top. (and based on tenuous facts)

So true, and something the story conveniently left out. I wonder why? :hmm:

This is part of the reason why I said looking at debt rates alone is not the whole story and not very useful. One could transfer debt like credit cards to debt like a house and its looked at totally differently. That doesn't mean its automatically affordable.

I agree, the article is silly and over the top.

 

[Mai72]

Isn't that was SS is for?

Do you want to rely on SS in another 20-30 years? MY dad gets $1,000 a month in SS. A little over $12k a year. How the hell are you going to survive on that meager income for the remainder of your life?

I even think a 401k isn't the answer that most people think it is. Yes, it's good to have, but what happens if you're about to retire and the stock market crashes like it did in 2009? I know people who lost one-third to one-half of their 401k portfolio. What do you do then? Plus, rising inflation is a big concern. I can only imagine what inflation is going to be like in 20 years. Using the inflation calculator a $20 purchase in 1980 will now cost you $57.77 That's a 188% increase in a little over 34 years. Yet, most people are blindly betting that their 401k is going to be sufficient for when they retire at 65. A foolish thing to do when most people are living much longer lives.

http://www.usinflationcalculator.com/

 

[Mai72]

It wasn't very smart at all! Well, for the most part.

As with many things it also depends on what kind of debt you're talking about. Technically someone with a mortgage is extremely indebted, but since it's backed with assets it's just fine for most people. $300k in mortgage debt is fine for a lot of people. $300k in credit card debt is fine for almost no one.

US credit card debts and such have decreased significantly in recent years. The economy as a whole was way too heavily leveraged before and so that's a positive thing. The middle class still faces lots of problems, I just found Dave's article to be silly and over the top. (and based on tenuous facts)

You left out student loan debt.

This is not good for the economy when people owe on average $30k and put off purchasing cars, homes and other high ticket items.

 

[fskimospy]

So true, and something the story conveniently left out. I wonder why? :hmm:

This is part of the reason why I said looking at debt rates alone is not the whole story and not very useful. One could transfer debt like credit cards to debt like a house and its looked at totally differently. That doesn't mean its automatically affordable.

I agree, the article is silly and over the top.

Sure, although even that would probably be a smart financial move as it would lead to a significantly lower APR.

Anyways, my only point is that things for the middle class aren't as dire as Dave seems to desperately want. In fact, things over the last few years have definitely markedly improved for the average person. It's just that they were really bad back in 2008 and so a return to only-modestly-bad hardly feels great.

 

[xBiffx]

Sure, although even that would probably be a smart financial move as it would lead to a significantly lower APR.

Anyways, my only point is that things for the middle class aren't as dire as Dave seems to desperately want. In fact, things over the last few years have definitely markedly improved for the average person. It's just that they were really bad back in 2008 and so a return to only-modestly-bad hardly feels great.

Overall, agree.

 

[fskimospy]

Do you want to rely on SS in another 20-30 years? MY dad gets $1,000 a month in SS. A little over $12k a year. How the hell are you going to survive on that meager income for the remainder of your life?

I even think a 401k isn't the answer that most people think it is. Yes, it's good to have, but what happens if you're about to retire and the stock market crashes like it did in 2009? I know people who lost one-third to one-half of their 401k portfolio. What do you do then? Plus, rising inflation is a big concern. I can only imagine what inflation is going to be like in 20 years. Using the inflation calculator a $20 purchase in 1980 will now cost you $57.77 That's a 188% increase in a little over 34 years. Yet, most people are blindly betting that their 401k is going to be sufficient for when they retire at 65. A foolish thing to do when most people are living much longer lives.

http://www.usinflationcalculator.com/

Rising inflation? It seriously annoys me how often I hear this. Inflation in recent years has been extraordinarily low. Even by your example that means we are averaging about 3% a year. If you look at more recent history (ie: not the extremely high early 80's inflation), we're averaging slightly over 2%. If your 401k is not earning an average of more than 2% a year you have a very poorly invested 401k.

 

[Mai72]

Sure, although even that would probably be a smart financial move as it would lead to a significantly lower APR.

Anyways, my only point is that things for the middle class aren't as dire as Dave seems to desperately want. In fact, things over the last few years have definitely markedly improved for the average person. It's just that they were really bad back in 2008 and so a return to only-modestly-bad hardly feels great.

It depends with who you talk with. Someone who lost their $120k a year job in 2009 and is currently making $30k is probably going to be very pessimistic about the economy and middle class. An individual who was able to ride out the financial mess is going to tell you that the economy is in good shape, and the middle class is doing well.

Again, it's who you ask.

 

[soccerballtux]

agree with medical care, retirement, and vacations

 

[unokitty]

what a fucking stupid article.

they still afford all of those. stop trying to keep up with the jones. stop thinking you need a 4k sq/ft house. stop thinking you need a fucking 45k new car every two years.

Merica!

Uno

 

[GTaudiophile]

Do these people have kids?
I can afford all this and more...but decided that kids are not for me.

Would much rather enjoy 1-3x vacations per year than have a child.

 

[waggy]

Do these people have kids?
I can afford all this and more...but decided that kids are not for me.

Would much rather enjoy 1-3x vacations per year than have a child.

i have 2 kids. i still go on 1-3 vacations a year.

though we don't go on thousand dollar ones. we don't go on trips over sea's, we don't go to mexico or to huge hot spots like Disney.

We enjoy going on family trips to national parks, cities we haven't been but the best (and cheapest) has been when we load up the van and pick a direction. we have found some great little places with fairs, events or whatever and have had a good time.

We have friends who are exactly like the op says. they make a good living but are broke. why? they have a 3500 sq/ft house with 2 kids, both have brand cars and get new cars every 2 years, they travel to mexico yearly and planning a trip to Europe with the 2 kids.

Yet they are hugely in debt. every month bitch about money etc.

only thing i think that you can really bitch about is health care cost.

 

[Nebor]

Do these people have kids?
I can afford all this and more...but decided that kids are not for me.

Would much rather enjoy 1-3x vacations per year than have a child.

I think that's a big part of it. But kids are just another thing that people feel entitled to, like the $200\mo cable and $100\mo cell phone. They get them because they think they're supposed to have them, not because they can afford them.

I'm also child-free, debt-free, have a couple of nice cars, own a nice home and live in a high-end apartment.

 

[Mai72]

No Kids.

I spent 4 months in Thailand. I have enough money saved and more. My girlfriend wants children and I told her no!

 

[crashtech]

I see these things as symptoms of Western adjustment to a global economy. Let's not kid ourselves, most of us with the tech and the free time to even post on here live like kings relative to the rest of the world. It is inevitable in today's labor market that a formerly affluent workforce will stagnate while the emerging labor force grows and prospers. Since not all 7 billion of us can live the kinds of lifestyles today's Westerner enjoys, there are, sadly, more painful adjustments to be made. It would be nice if the rest of the world could be brought up to our standards, and we all want that to happen, but realistically in the future there will be a "new normal." Hopefully it won't be too bad.

 

[werepossum]

Yes, I would say it indicates that they can pay it down but does that mean its automatically affordable? Lots of times I choose to not do certain things so that I can get caught up on paying off some debt. That means I'm not doing something else to compensate. I imagine most people aren't like me though.

I'd say that if one does not have to pay less on one category to pay more on another, then one is upper class, not middle class. The middle class has never able to afford a new automobile without watching what we spend on other things.

 

[xBiffx]

I'd say that if one does not have to pay less on one category to pay more on another, then one is upper class, not middle class. The middle class has never able to afford a new automobile without watching what we spend on other things.

I would agree. But many of the middle class today do it anyways without adjusting other things.

 

[bshole]

Do these people have kids?
I can afford all this and more...but decided that kids are not for me.

Would much rather enjoy 1-3x vacations per year than have a child.

Not to mention the thrill of dying alone with nobody to comfort you on your death bed.... that sounds fantastic. I remember vividly an old man at my grandma's funeral weeping bitterly. He saw all the children and grandkids at her funeral. He said that there would be nobody for him when his time came.

Not sure life has much meaning outside of children.

 

[smackababy]

So, the middle class can no longer afford that stuff.

How about a list of all the things they can now afford they there didn't buy a decade or two ago?

Latest and greatest smartphone? Check!
High speed internet subscription? Check!
Computer? Check!
Designer shoes / handbags / clothes? Check!
Eating out regularly? Check!
Larger houses / apartments? Check!
Latest Xbox / Playstation with lots of games? Check!

Should I continue? Or, can we stop this "omg everyone is poor and it is the rich man's fault" garbage? You want to know why people have no retirement and savings? Because, they are bad with money and can't fathom going without a little less entertainment in their miserable lives.

 

[spacejamz]

Not to mention the thrill of dying alone with nobody to comfort you on your death bed.... that sounds fantastic. I remember vividly an old man at my grandma's funeral weeping bitterly. He saw all the children and grandkids at her funeral. He said that there would be nobody for him when his time came.

Not sure life has much meaning outside of children.

[insert anecdotal story about children who ignore their senior parents unless they are left something in the will]

 

[bshole]

[insert anecdotal story about children who ignore their senior parents unless they are left something in the will]

That's weak sauce bro....

 

[Nebor]

Not to mention the thrill of dying alone with nobody to comfort you on your death bed.... that sounds fantastic. I remember vividly an old man at my grandma's funeral weeping bitterly. He saw all the children and grandkids at her funeral. He said that there would be nobody for him when his time came.

Not sure life has much meaning outside of children.

Everyone dies alone. Don't let anyone tell you different. Your family surrounding you and holding your hand as you slip peacefully into the great beyond is a Hollywood fantasy. Most people who don't die a violent death will die alone in a nursing home or hospital room, quietly and alone, long after their family has gotten over the initial shock of their ailment and resumed their daily routine.