Last year The Fiscal Times published an article titled 'What's Rich? Down and Out on $250,000 a Year'. Here's a brief excerpt.
By most measures, a $250,000 household income is substantial. It is six times the national average, and just 2.9 percent of couples earn that much or more.
. . .
But just how flush is a family of four with a $250,000 income? Are they really “rich”? To find the answer, The Fiscal Times asked BDO USA, a national tax accounting firm, to compute the total state, local and federal tax burden of a hypothetical two-career couple with two kids, earning $250,000. To factor in varying state and local taxes, as well as drastically different costs of living, BDO placed the couple in eight different locales around the country with top-notch public school districts, using national data on spending.
. . .
The bottom line: It’s not exactly easy street for our $250,000-a-year family, especially when they live in high-tax areas on either coast. Even with an additional $3,000 in investment income, they end up in the red — after taxes, saving for retirement and their children’s education, and a middle-of-the-road cost of living — in seven out of the eight communities in the analysis.
There's much more at the link.
I found this article astonishing, not just because of its analysis of the cost of living a certain lifestyle, but because so much of that lifestyle was essentially hedonistic - not really necessary, not even particularly desirable, but indulged in because that's what everyone else in those areas and/or that income bracket does. I've never regarded 'keeping up with the Joneses' as a worthwhile motivating factor, and was rather depressed to see how it affects a wealthy American family's lifestyle in both conscious and unconscious ways.
Now The Fiscal Times has come out with another article: 'The Real Cost of Living: $150,000 Minimum'. It's almost as bad as last year's effort. Here's an excerpt.
The divide between the 1 percent and the 99 percent has ignited a national debate about the income gap, especially since Occupy Wall Street protesters descended on lower Manhattan last fall. But how much money does it take to feel financially secure these days?
The answer, at least according to a new survey of Americans by WSL/Strategic Retail, is $150,000. That level of income is more than three times the national median of $49,445 for 2010, and it’s enough to put a household into the top 10 percent nationally.
The survey asked respondents to choose which of four categories best described them: I can’t even afford the basics; I can barely afford the basics and nothing else; I can afford the basics plus some extras; and I can afford the basics, the extras, and I’m able to save too. It is only at that $150,000 level that the survey found the vast majority of consumers, 88 percent, saying they could buy what they need, afford some extras, and still be able to save a bit.
Even as the economy improves and consumer confidence builds, more than half of Americans – 52 percent – feel like they can just afford the basics, and many with six-figure incomes still feel like they are just scraping by. The survey found that 18 percent of American households earning between $100,000 and $150,000 said they could only afford the basics, with another 10 percent saying they sometimes can’t even afford those staples.
Again, more at the link.
Frankly, I don't know how to respond to that article. Miss D. and I are living on much less than $150,000 per year - several multiples less! We don't have a lot of money for luxuries, but we cope, particularly by watching our pennies, shopping carefully, and not buying many things we don't really need (apart from a few special interests for each of us, for which we budget as practically as possible). We're even managing to pay down debt and build up our savings, over time.
In most cases with which I had contact as a pastor, apart from obvious problems such as under- or unemployment, if a family wasn't making it on the income of its members, it usually wasn't because they weren't earning enough money - it was because they weren't living within their means. Sure, doing that may mean dispensing with what some people today think of as 'essentials' - but if something isn't absolutely, fundamentally necessary to feed, clothe, shelter, educate and/or transport your family then, by definition, it's not essential. One can dispense with an awful lot of so-called 'essentials' and cope very well without them. For example, Miss D. and I try to minimize our use of credit. If we can't afford something, we generally don't buy it, preferring to save our money until we can afford it. We (and our friend and landlord) don't have a cable TV subscription. Some people seem to think we're 'missing out' by not having one, but we don't miss it at all. Its absence allows us to spend more time together without distractions, or work on other things of interest to us; and we save several hundred dollars a year into the bargain. TV isn't a necessity. It's not an essential part of life. Why is that so hard for some people to understand?
These articles are a frightening illustration of the 'consumer' or 'entitlement' mindset of so many American consumers. If they really believe this claptrap . . . if they really believe they need such a ridiculously high income to cope with normal, everyday life . . . then how are we ever going to get them to face economic reality?