How are people managing in this economy? How do we fix this?

16 comments

1. We’re in the same boat but have more wiggle room with our budget

   Honestly? It has a lot to do with our housing choice. My wife, son and I live in a very large and nice apartment that costs us $2500 a month.

   If the world changed for the worse tomorrow, I would be looking to downsize our housing pretty quickly.

   Our other big expense is groceries as we focus on eating fairly healthy, so we spend about $150-175 on groceries per week (family of
   4). If need be, I think we could shave that down to $120

2. What is MCOL?

3. All good at the bottom! I work 30 hours a week at $15/hr (cash / off the books so ~$1800 a month) and have no problems making ends meet living out in the boonies of rural Pennsylvania.

   My monthly expenses only come out to around $900, so i usually have close to $1000 to do whatever with after my necessities are covered.

   $500 rent, $40 internet, $75 – $150 gas, $50 other utilities per month, $40 car insurance are all of my expenses.

   Free food stamps, free cell phone, free health insurance from Big Daddy Government.

4. Daycare is probably a pretty big eater of income that’s a big difference over 25 years ago.

   We live in a MCOL area too and I make half of what your household income is and we’re pretty much in the same position. Own our house. Go out to eat occasionally. Try not to spend money we don’t have to. We don’t go overboard on vacations. We drive two paid off cars, which is the big reason why we have like $500 or so leftover every month. It’s hard to really compare because everyone makes different money decisions based on what’s important to them.

   People upsize their standard of living to their income because they think they need x, y, and z because of how much they make. I think too the more money you make the less you really think critically about how every dollar gets used and it becomes very easy to waste money. My wife and I have always made an effort to live to about 80% of our means. And often because of that, it’s difficult for me sometimes to look at someone making double what I do and comprehend how they’re in no better shape than me financially, and often worse off. Because I’ve never made six figures and I’m on pace to be able to retire at some point in my early 50s.

   Also, I think people overestimate what “middle class” actually means. Because the middle class is a dream sold by politicians and marketers.

5. What’s happening is that the wealth in the world has coalesced at the highest end of the spectrum, and rather than members of the ultra-rich elite daring to reinvest that wealth back into society, they would rather spend a fortune backing political leaders who will help shield them from pesky things like laws and taxes.

   Meanwhile, every step forward taken by anyone outside their bubble of uber-wealth is met with hostile resistance in the form of price gouging. Workers in a factory unionize? Prices go up. Fast food workers ask for a living wage? Prices go up. Regular folks feel the pinch of these decisions, which are broadly portrayed as the reason for price hikes, and which turns us against each other when the real target for our wrath needs to be that extreme upper class. Meanwhile, the people at the top keep making more money without letting go of any of their wealth.

   This is unsustainable. If a household making six figures is feeling the pinch, they need to realize, as you did, that people further down the chain have to choose between heating their homes and feeding their children. These are folks who work hard, try to work within the system, and get fucked for the effort.

   Societies will not survive dick measuring contests between assholes who hoard more than they will ever need for sport. They need to be brought to heel, and their enablers who act like they’ll someday get a piece of the pie need to be brought down as well.

   Vote.

6. Our household income is about 60k less annually. Live in a major metro area but 4th tier suburb. We managed get a house in short sale and our mortgage is only 1600 for a 5 bedroom 3 bath in a nice neighborhood which is cheap in this area. Most peole around here are paying that or more for a 2 bedroom apartment. We have 3 kids but no daycare. How do we make it work?

   We no longer go on any family vacations. We very rarely go out to eat…like once every 6 months. Meals are strictly planned and made to be affordable. We do not buy any snacks or junk food. I’m a nazi about electricity usage. I dont have any real hobbies. Christmas, birthdays and other holidays have been drastically cut back. Stopped working on home improvement projects.

   I too wonder how other families are getting by. I hear credit card debt is surging. Seems everyone has a side hustle.

7. Shit man, I was just quoted $2,000 a month for daycare.

   Thing is, we can afford it, the dual income trap is real.

   How others get through this, I don’t know. My wife wonders why I hoard money and refuse to upgrade from our house that we pay nearly no interest on. I am not a poor kid at heart, I am just rational when it comes to money. We have one expensive habit, cars, everything else I watch like a goddamn hawk.

   Everything is a charge, every greasy middleman gets his cut, everyone wants in your wallet.

   It is getting to the point where that $7k repair on your car, while it sucks really bad, is still more financially feasible than buying a new car. Even used cars are too damn expensive.

8. Been saying this for ages now.

   We have a household income of 300k NZD (190k USD) and we’re incredibly middle class. Like, the pure definition of middle class lifestyle. We have a low mortgage, no debts, 13 year old car for the wife and a company vehicle for myself. My phone is second hand, my clothes average, we holiday abroad once a year, have investment accounts for myself, the wife and our daughter. I mow my own lawn, do all my handyman work myself, we save up to buy stuff.
   Make no mistake, we live very easy middle class life, have no money stress, don’t have to decide between eating or heating, but we’re absolutely not balling at all. We don’t feel the pinch but I also don’t feel at ease.

   I get paid fortnightly. My next salary is already spoken for. Granted, it’s all middle class shit that’s probably not needed, but it makes life more pleasant instead of just surviving.

   I honestly scratch my fucking head when people tell me I’m the top *insert percentage here* .

9. Family of 4, single income. Avoid lifestyle creep like the plague.

10. My household is a top 5% highest income bracket. I think I take a lot for granted, but after our expenses, I’m always let down by how little is left over for my own enrichment, let alone retirement.

    I feel like everyone is squeezing us for every penny to make up for the pandemic. I blame our capitalist shareholder culture.

    None of our employers, especially those large public companies, given flying fuck about their employees. They are all so poorly managed from an employees perspective because they aren’t being managed for the benefit if employees at all. Shareholders just don’t give a collective shit.

    And then as a consumer, there is nothing being done for my benefit. Look at shrinkflation and stifflation — less for more. Streaming services consolidating for less choice, kids snacks containers shrinking — even at the top 5% I feel like I’m getting priced out of normal vacations or hobbies, so how does someone in the middle feel getting priced out of basic every day activities or necessities? All of this so shareholders can get a slightly better return.

    We can’t fix it until the interests of employees, consumers, and society at large enjoy the same robust legal protections as shareholders. We need more executives like Costco CFO Richard Galanti who will push back on their shareholders pricing criticisms (https://www.reddit.com/r/Costco/comments/zh9gn9/in_yesterdays_earnings_call_wall_st_was_pushing/&ved=2ahUKEwiU5YrXkf_7AhXLGTQIHSPPAyYQFnoECA0QAQ&usg=AOvVaw1oIip8Wpx1ZXsQefcdw-uo)

11. The problem is some people who made a ton of money off this recent inflationary crisis, and thus they don’t see any reason things ought to change.

    If those people are left in charge, I don’t see how anything does get fixed.

12. You take home like 8k a month and only can save $500-$1000? Do you have a budget?

13. we majority of us are essentially enslaved by the most rich, like 95% or 99% of the earners. there is really no need to try hard. and i am not having kids no matter how our population is going to shrink in the future and “our kids would have more chance than us”. no. lol

14. It really feels like the United States is dwindling into a 3rd world country.

    I’ve been mulling this over for a few days now, and some of the symptoms to me are civil unrest, financial instability, lack of trust in police/security, self serving politicians and community leaders.

    The future of our country looks bleak, as a union we aren’t incentivized to make things better. It doesn’t look like it ever could get better. People are so polarized we don’t see each other as human. Media cycles have perpetuated a never ending flow of sorrow… so much sadness that we don’t even have space to feel our own sorrow.

    We’re told to vote and make a change. We did and student loan forgiveness was ripped from under our feet. Voting was made more difficult. Books are being taken from public libraries and funding is being diverted from public education.

    Paid wages have become stagnant, while prices continue to soar. People are already priced out of purchasing a home or vehicle.

15. Hot take because I manage in this economy by living a life against all conventions of “how” you should live in the US. I am fortunate to live with parents and in return pay them some money competitive with what a room would cost with roommates. I travel enough to keep my mental health in check. I am fortunate that I paid off my car already. I pay around $50/month for car insurance because it’s an older car ($300/per 6 months).

    Hot take 2. I’m single. I would not raise a family in the US. I would only date a woman that doesn’t want kids. I feel that it’s a financial decision that makes the most sense in a country without universal healthcare. The only exception to this is marrying an international women so that the kids would have universal healthcare via her mother’s country.

    tl;dr I manage by being single, dating women that don’t want kids, living with parents albeit paying them a competitive rate similar to a room, and already have paid off my car. I know I’m fortunate to have family support.

16. > My point is, I’m living what would be considered a fairly basic middle-class life 25 years ago as someone that is currently in the top 20 percent. How is the rest of the US doing it that make less and have a family? I know a lot of people are making serious sacrifices right now. This can’t possibly keep trending in this direction can it? In another 25 years, is it only going to be the top 10 percent of US that can live what use to be considered average middle class life?

    The current inflation was a confluence of the tight labor market, Russia doing Russia things and the last stimulus program being very poorly targeted (plus possibly the Fed overheating the corporate paper market). Latest fed forward projections are encouraging (projecting normal to return early 2024) and the last 6 months of pricing data suggests a cooling off is starting. To be seen if there will be a mini recession or not. Incomes always lag consumer prices (not a conspiracy, simply takes longer for labor price changes to clear as they tend to happen when people change jobs) but they will catch up. The growth in median wages & salaries since Q1 is the steepest increase in nearly 40 years.

    Obviously can’t speak to your individual situation but people generally have really really strange perceptions of how much spending power people had in the past that just isn’t supported by the data. BLS & CB track this data through surveys and pricing research (mostly [this one](https://www.bls.gov/cex/) for this topic) and mostly it just shows changing preferences. People spend *way* more on leisure goods & services then in the past across all incomes, this is perhaps the most important measure of how people are doing financially as obviously people buy food & housing before TV’s.

    Housing is the major area where things do get a little fucky though. The increases in home prices in the last few years are pure insanity. Much longer term (last half century) other then some notable exceptions where cities had insane NIMBY policies there were quality (houses are less likely to kill you, are more energy efficient etc), space (new construction average area has more than tripled since the mid-50’s) and household size (households are smaller and younger then in the past) justifications for the rise in costs. Last few years the cheap credit and COVID has driven everyone insane.