The Dwindling Middle Class

[rorich]

considering the rising costs to cover the basic necessities at a much faster rate than our income, what do you think can help save the middle class ? Healthcare premiums , Tuition, Home prices, etc. have all increased at a rapid pace. Have our expectations outgrown possibility?

[kav122]

Sorry, I can't click on that link because I am at work. I don't know what it is about, but it sounds like it might be my view of the "shrinking middle class." I don't like to hear about the "shrinking middle class" because I think it is an inaccurate statement. I think our perception of what is middle class is different, but the actual numbers are the same.

My parents and grandparents always thought of themselves as middle class, and although they have nice things now, when they were my age they didn't!!! (I am 26) They know that I am frugal, so they LIKE to give me hints about things that they did to save when they were my age, but I still have more than they did.

I think that we watch tv and see the filthy rich and thing "gee, I don't have that. and hey, wait! I can't throw my 16 year old a 200,000 dollar birthday party. And I finished college, why don't I have a 3,000 square foot luxery apartment in the city that looks like it came straight out of the pages of Crate and Barrel or Pier One, etc?

I think that if you look at the "middle class" on television of the 50s and even through the 70s, the families weren't RICH. They were normal. Our media has skewed normal so much that we all think we must be poor. I don't think so at all! If we were all around real poor people more often then we would see how "middle class" we actually are.

[rorich]

Originally Posted by kav122

I think that we watch tv and see the filthy rich and thing "gee, I don't have that. and hey, wait! I can't throw my 16 year old a 200,000 dollar birthday party. And I finished college, why don't I have a 3,000 square foot luxery apartment in the city that looks like it came straight out of the pages of Crate and Barrel or Pier One, etc?

I can definitely agree with this. I think many people are unable to find the difference between their needs and wants and this is one key factor why people end up in debt. When we try to keep up with the Joneses, we end up broke — just like the Joneses

[Joanne]

When we try to keep up with the Joneses, we end up broke — just like the Joneses

True, very true. That's something my kids & I talk alot about. We know lots of people who don't have savings but they drive a 2008 car. It's sad actually. Their in debt up to their eye balls but they still buy the most expensive stereo system they can find.

[kav122]

So do you guys think that the middle class really IS shrinking?

[rorich]

Originally Posted by kav122

So do you guys think that the middle class really IS shrinking?

I think it depends on how you look at it. Do you ever notice that there is a government program available to assist lower income families ? If you're rich, you won't need these programs because you can afford almost anything. What happens to those in the middle?

Consider the fact that house prices have increased at levels where people can hardly afford them. Many of us are led to believe that we can and often end up in foreclosure. Our expenses seem to be increasing faster than our incomes. Then again, understanding the difference between needs and wants make for a more sound financial decision, keeping more money in your pocket

[anitra]

Personally, I feel like a family who is not struggling to provide food, shelter, clothing, and transportation is (probably) middle class. (It also depends on who you would consider your peers.) It's not really income based, since the cost of living is so different around the country.

On the other hand, far too many people are overreaching themselves to have a "better" life than their parents had. If you have student loans and/or credit-card debt and/or home-equity debt, you may be in the "middle class" but living paycheck-to-paycheck.

[rstlne]

Stopping inflation in its tracks would help the middle class immensely. Many people fall off the treadmill because their costs have jumped while their wages have not kept up.

[girlfromsouth]

Originally Posted by rstlne

Stopping inflation in its tracks would help the middle class immensely. Many people fall off the treadmill because their costs have jumped while their wages have not kept up.

That's so true. My raises over the past couple of years have definitely not kept up with the increases in basic staples of life, like gas and milk and everything. I'm not hurting or anything but it has definitely had an effect, on how much money I have left over for more frivolous things.

I also wonder - do you think too many people assume they are middle class when they are really not?And thus spend accordingly, creating more debt, etc?

[Miss Rosie]

Originally Posted by rstlne

Stopping inflation in its tracks would help the middle class immensely. Many people fall off the treadmill because their costs have jumped while their wages have not kept up.

That's what I see, too.

I started with so little that my own standard of living has done nothing but increase, but for my friends who had more normal lives, they're running in place. A friend of mine whose household income is in six figures is starting to look to me for tips to keep her family going, and she wasn't a spendthrift to start with. She's quite sensible. Her husband's business is doing just fine, but somehow they're losing money.

It disturbs me. I don't know how this one will be resolved.