middle class http://www.wisebread.com/taxonomy/term/8886/all en-US Passing for Middle Class http://www.wisebread.com/passing-for-middle-class <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/passing-for-middle-class" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/cdn/farfuture/Yxgr35yvRG8sNOcxUg4gm5jyvQDMKs11ascaeOByAmI/mtime:1342091034/files/fruganomics/imagecache/250w/blog-images/windowsill.jpg" alt="Bottles on a windowsill" title="Bottles on Windowsill" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>The most constant theme in my posts here at Wise Bread has been frugality. If you live cheaply enough, you can <em>spend your life doing what you want to do</em>. Even if you have to work for a living, you can chose your work based on what you most want to do, rather than what pays the most.</p> <p>The downside to simple living through frugality is that it's easy to find yourself dropping out of the middle class. (See also: <a href="http://www.wisebread.com/when-poor-folks-have-better-crap-than-you">When Poor Folks Have Better Crap Than You</a>)</p> <h2>A Class Without a Name</h2> <p>As far as I know, there's no name yet for this social and economic class &mdash; people who choose not to buy all the stuff that's required to stay in the middle class. (One subcategory would be <a href="http://www.wisebread.com/bohemians-then-and-now">bohemians</a>, but most of the frugal folks I know are not bohemians.)</p> <p>To live really cheaply, you have to economize almost everywhere &mdash; and almost all of those economizations will impact one marker or another of being middle class. Cheaper housing &mdash; a smaller house, or an apartment instead of a house, or a smaller apartment &mdash; are all steps away from the middle class. The same with fewer cars, or no cars.</p> <p>Every specific economization that I've recommended over the years, from <a href="http://www.wisebread.com/turn-off-your-air-conditioning">getting by without air conditioning</a> to <a href="http://www.wisebread.com/frugal-transport-bicycling">bicycling for transportation</a> to <a href="http://www.wisebread.com/less-or-cheaper">making smaller cocktails</a> has been criticized &mdash; and very often, the underlying reason for the criticism is that the economization would involving giving up something that's fundamental to being middle class.</p> <p>This is often cast as a <a href="http://www.wisebread.com/not-driving-your-less-frugal-friends-crazy">&quot;keeping up with the Joneses&quot; problem</a> &mdash; you can't cancel your lawn service when all your neighbors have perfect lawns, and you can't keep driving your old car when all your neighbors are buying new ones &mdash; but that's only part of it.</p> <p>If something is fundamental to being middle class, giving it up drops you out of the middle class.</p> <p>Then you have to decide &mdash; is staying in the middle class worth the cost?</p> <p>If you're up against that dilemma, here's a third option that's worth consideration &mdash; pass for middle class.</p> <h2>How to Pass</h2> <p>Passing for middle class requires that you identify the key trappings of middle-class life, and then make sure that your household has those trappings. And, of course, you want to do this as cheaply as possible.</p> <p>That's not as much of a disconnect as it might sound like. Most of the trappings of middle-class life are practical things like housing and transportation, which you're going to need anyway. So passing needn't involve buying stuff that you don't care about. Passing involves making your choices with an eye toward falling within certain bounds &mdash; the bounds that define middle-class living.</p> <p>Here are two tactics.</p> <p><strong>Lifestyle Clusters</strong></p> <p>Whether a lifestyle counts as middle class or not doesn't depend on a single marker, and whether any particular marker is required or not is context dependent. So, for example, a house in the suburbs is a middle-class marker &mdash; but if you have a house in the suburbs, you need a car. (You probably need two.)</p> <p>An urban apartment near culture and nightlife also qualifies as middle class &mdash; but an urban dweller is not required to have a car. (And <a href="http://www.wisebread.com/think-you-can-afford-more-house-in-the-exurbs-think-again">giving up a car will save you more than you probably realize</a>.)</p> <p>You can look at the clusters and choose one that's frugal. You can choose one where the things that you're required to have (to count as middle class) are the things that you want anyway. You can choose one where the things that you'd just as soon not pay for are not required. You can choose one where, even if you give things up that <em>are</em> required, their absence won't be obvious to your friends, neighbors, or coworkers.</p> <p>If you choose a lifestyle cluster that falls within the definition of middle class, you can pass for middle class, even if you make all sorts of deviations. You could have a roommate, for example, or take in borders, or rent a room instead of an apartment. You can do things that would mark you as probably not middle class &mdash; but you can pass for middle class, because your lifestyle cluster looks middle class.</p> <p><strong>Cost-Invariant Markers</strong></p> <p>Some of the trappings of middle class are available at many different price points, and yet the cheap ones are just as valid as the expensive ones.</p> <p>For example one marker for middle-class life is a college degree. You could spend six figures getting a degree &mdash; and the money might even be worth it. (It depends on what you want to do with the rest of your life.) But two years of community college plus two years at a state school will also get you a college degree, and as far as being a middle-class marker goes, that state school degree is every bit as good.</p> <p>There are a lot of middle-class markers that are available cheap, at least sometimes. A rusty old car that would normally not qualify as a middle-class marker might squeak by if it's an expensive brand. Second-hand clothes are very much not middle class, but if you choose classic styles, they can pass very easily.</p> <h2>Should You Care?</h2> <p>My starting point is always that you should live your life according to your own values.</p> <p>To the extent that your values are different from middle class values, your life <em>should</em> look different from a middle-class life. Even so, sometimes there are reasons to blend in with the dominant culture, rather than stand out. There are advantages to appearing middle class.</p> <p>Sometimes, even when your values aren't middle-class values, it's worth making some small adjustments to pass for middle class.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/philip-brewer">Philip Brewer</a> of <a href="http://www.wisebread.com/passing-for-middle-class">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-does-frugal-living-mean-to-you">What Does Frugal Living Mean to You?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/your-finances-4-emotional-decisions-to-avoid">Your Finances: 4 Emotional Decisions to Avoid</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-make-an-easter-basket-for-a-grown-man">How to Make an Easter Basket for a Grown Man</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/invest-your-time-in-these-13-things-while-youre-in-your-20s">Invest Your Time in These 13 Things While You&#039;re in Your 20s</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-investing-lessons-you-must-teach-your-kids">10 Investing Lessons You Must Teach Your Kids</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Lifestyle Joneses middle class passing Thu, 12 Jul 2012 10:36:11 +0000 Philip Brewer 941429 at http://www.wisebread.com How Will the Obama Middle Class Tax Credits Benefit You? http://www.wisebread.com/how-will-the-obama-middle-class-tax-credits-benefit-you <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-will-the-obama-middle-class-tax-credits-benefit-you" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/cdn/farfuture/rirTlmFcJs_twUWeNViUpPGkm8Q7i-SbuMmevh2m7v0/mtime:1301029907/files/fruganomics/imagecache/250w/blog-images/2175936409_b0eff591f7.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="188" /></a> </div> </div> </div> <p>President Obama is announcing several tax credits for the middle class in his State of the Union speech. Here are some of the details on what the proposals are, and how those who qualify can get the most out of the credits.</p> <p>The <strong>Child and Dependent Care Tax Credit</strong> will increase from 20% to 35% of qualifying expenses for families making under $85,000 a year. The credit decreases to 20% for families making up to $115,000. Families could claim up to $3,000 in expenses per child for up to two children. This means that a qualified family that claims the max amount of $6,000 in expenses will see a tax deduction of $2,100 instead of $1,200. It also means that for some families it would become more financially prudent to claim the Dependent Care Tax Credit instead of funding a dependent care flexible spending account with the maximum of $5,000. This tax credit is not refundable so those who do not pay taxes will not receive it.</p> <p>The <strong>Saver's Credit</strong> will become refundable and expanded. Currently the credit ranges from 10 to 50 percent on the first $2,000 of contributions people make to a 401(k), IRA, or other qualified retirement plan. The maximum credit is $1,000 for an individual and $2,000 for a married couple. The current income limit for receiving this credit is $55,500 for a married couple. The new proposal would allow couples making up to $65,000 a year get a 50% credit on the first $1000 they each contribute for a maximum of $500 of credit per person. Couples making up to $85,000 would get a partial credit. If this credit were made refundable then those who do not make enough to pay taxes will benefit the most when they save at least $1,000 a year since they will be guaranteed a 50% match from the government.</p> <p>Obama's middle class task force also proposed several other initiatives relating to student loans and automatic IRAs. The final tweaks to the tax code will still need to be approved by Congress and signed into law, but I personally think that these changes are too specific and will not affect a great amount of people significantly. Nevertheless, those who qualify for the tax credits could stand to gain a maximum of a couple of thousand dollars a year.</p> <p>What do you think? Will you benefit from these tax changes? Will these tax credits save middle class America?</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/xin-lu">Xin Lu</a> of <a href="http://www.wisebread.com/how-will-the-obama-middle-class-tax-credits-benefit-you">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-to-put-your-2011-payroll-tax-break-to-work">6 Ways to Put Your 2011 Payroll Tax Break to Work</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/homebuyer-tax-credit-extended-and-expanded">Homebuyer Tax Credit Extended and Expanded</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8000-housing-tax-credit-can-now-be-turned-into-cash-at-closing-according-to-fha">$8000 housing tax credit can now be turned into cash at closing according to FHA</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/bigger-paycheck-or-bigger-tax-refund-which-should-you-pick">Bigger Paycheck or Bigger Tax Refund — Which Should You Pick?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-miss-these-7-great-tax-deductions-for-parents-and-caretakers">Don&#039;t Miss These 7 Great Tax Deductions for Parents and Caretakers</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Taxes middle class tax credit Wed, 27 Jan 2010 14:00:02 +0000 Xin Lu 4896 at http://www.wisebread.com A decent standard of living http://www.wisebread.com/a-decent-standard-of-living <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/a-decent-standard-of-living" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/cdn/farfuture/nkmH3_icMYeL50PQK80FC4FhveBVW8A2C_kZnuWYYb0/mtime:1301029923/files/fruganomics/imagecache/250w/blog-images/bench-in-herb-garden.jpg" alt="Bench in an herb garden" title="Bench in an herg garden" class="imagecache imagecache-250w" width="250" height="327" /></a> </div> </div> </div> <p>There's little argument about the minimum a human needs to survive&mdash;we know how much water, food, and shelter keep body and soul together. But a certain level of comfort above that has always been considered necessary for a &quot;decent&quot; standard of living. Just how much space there is between necessity and decency, though, is a social construction, and society's opinion changes all the time.</p> <p>A while back, I wrote a piece on <a href="/our-high-high-standard-of-living-1">Our high, high standard of living</a>, in which I made the point that what would have been considered a &quot;middle-class&quot; standard of living in the 1950s would be considered &quot;living in poverty&quot; today.</p> <p>That piece prompted a lot of unhappy responses.</p> <p>There were several who fixed on my claim that a family could get by&mdash;at that standard of living&mdash;on a single minimum-wage job, and tried to prove I was wrong by demonstrating that a minimum-wage job couldn't possible cover even the barest minimum of expenses. None of those people suggested moving to a cheaper part of the country as a way to make ends meet. Few of them stripped their supposed minimum budget of luxury items like private bathrooms and hot running water&mdash;which were by no means universal in the 1950s. Nobody mentioned being in a car pool (something which was very common in those days). Nobody mentioned moving in with their wife's parents.</p> <p>The other unhappy responses, though, were from people who worried that providing perspective on just how high our standard of living was (compared to the 1950s) could be read as making the case that poor people aren't really poor, because they have color TVs and DVD players. (Apparently calling it &quot;living in poverty&quot; wasn't adequately clear.)</p> <p>The thing is, there's no social consensus on what it takes to live at a &quot;decent&quot; standard of living. In fact, it's hard to even talk about, because people attack any specific proposal from both directions. Suggest that an expense is necessary to live a decent life, and people will delight in pointing out that a billion poor people around the world get by without (let's say) a refrigerator. On the other hand, chose to heat only one room of your house to minimize your contributions to global warming, and you might have a neighbor contact child protective services and call you an unfit parent.</p> <p>Catherine's recent post on <a href="/is-six-figures-really-that-much">getting by on a six-figure income</a> (together with its comments) vividly illustrates just how personally people take any suggestion that a particular category of expense is optional&mdash;or, contrariwise, that someone can do without it and still be considered to be living decently.</p> <p>In my experience, talking about cars is the worst. People will brook no criticism of their motoring lifestyle. One of my first posts on Wise Bread made the mathematical case that its safer to live in a dangerous neighborhood than it is to have a <a href="/dangerous-neighborhoods-are-safer-than-commuting">long commute</a>. Readers were outraged. Nobody disagreed with the math, they were just outraged. (I was amused that the suggestions Catherine saw for people trying to get by on $100,000 a year included &quot;Drive cheaper cars,&quot; but apparently nobody suggested driving <strong>fewer</strong> cars or driving <strong>no</strong> cars.)</p> <p>(I'm sure talking about children would be worse yet. There's no ceiling to how much money you can spend to give your kids &quot;the best&quot; and no touchstone for what's money well-spent.)</p> <p>Social norms simply haven't kept up with the rapid rise in standards of living. The result is that there's no consensus on what's necessary to live decently. One person's necessity is another person's luxury, and one person's wild extravagance is another person's bare minimum for decent living.</p> <p>There's a huge opportunity here for people to make their own decisions about what amounts to a decent standard of living. The key is: Do not buy into the cultural assumptions about what your particular income entitles you to&mdash;or accept that it obliges you to some particular lifestyle. Instead, <strong>make your own decisions</strong> about what standard of living you want, now and in the future. (And remember that a lower standard of living now gives you a higher standard of living later, due to interest and dividends from your savings and investments.)</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/philip-brewer">Philip Brewer</a> of <a href="http://www.wisebread.com/a-decent-standard-of-living">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/37-ways-youd-be-better-off-as-a-bum">37 Ways You’d be Better Off as a Bum</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-your-standard-of-living-rise">Should your standard of living rise?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/tactics-of-the-rich">Tactics of the rich</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/chinese-money-habits-how-my-culture-influences-my-attitudes-toward-money">Chinese Money Habits - How My Culture Influences My Attitudes Toward Money</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/eight-natural-ways-to-make-water-more-flavorful">Eight Natural Ways to Make Water More Flavorful</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Frugal Living affluence class middle class poverty standard of living weath Mon, 03 Mar 2008 22:55:20 +0000 Philip Brewer 1879 at http://www.wisebread.com