Middle Class Discussion

by AustinMom

While the term “middle class” is frequently used, even the Census Bureau does not have an official definition because the middle is relative to the entire spectrum.  A 2011 Pew Charitable Trust Study, listed the range the 30 to 70 percentiles of income in America (in dollars that is $32,900 to $64,000). However, this percentile income range for “middle class” also varies based on the cost of living and salaries in your area.  This means “middle class” is more about a frame of mind or what is viewed as important – as of August 2012 that was a secure job and health insurance (Secure Job – Ticket to the Middle Class).

The nebulousness of middle class is borne out in two recent articles.  The first article talks about middle class from a psychological perspective, near the end is an interactive chart that is interesting. (Economically Insecure Middle Class)

The second one shows how defining “middle class” by income as a fixed dollar range can be misleading.  (Living Paycheck to Paycheck on $75K).

I used the this Census site (Census State Income) to get a rough estimate of middle class based on the percentile definition. The range is $25,000 to $75,000. Based on this figure, we have dipped into the middle class in the last 10 years, but overall have remained slightly above that. However, within Texas I live in an area (as are most big cities in the state) where the cost of living is slightly above the average national cost of living. (Cost of Living)  Including this measure, our income is slightly more than the city’s average cost of living. Since that does not include saving for totebag important items such as retirement and college, I would say our family falls in the definition of middle class.

Do you think you are middle class based on your income and location?


275 thoughts on “Middle Class Discussion

  1. In out suburb, the COL is slightly below the national average. That allows us to feel above middle class, but far from wealthy. The logistics of adding a fourth driver require planning, we don’t take the vacations we would like while we have a child in college, and we couldn’t have one of us walk away from work without having to make some big changes. But — we are able to save for college and retirement, which I think is a luxury. We don’t lose sleep over financial problems, and we could weather some bumps in the road, so I know that puts us in a better spot than a lot of people. But that is not something I would really discuss anywhere off this board. A couple of my close friends and some of our relatives are in a position where they will be working for a very long time, so any financial conversations are just commiserating.

  2. We aren’t middle class, although we are at the average income in our little corner of Totebagland. That was intentional, as we wanted the kids to grow up without being either the richest or the poorest in class at school.

    I do wonder how a lot of our neighbors manage second homes, $80k cars, McMansions and country clubs with 4-5 kids. Inheritance, tax evasion, mafia income??? ;)

  3. Do you think you are middle class based on your income and location?

    Maybe a little bit above, so upper-middle.

    Income and location are two important factors, but the total picture is always far more complex. There are also your spending and consumption habits, and expectations about what is considered normal vs. a splurge in all categories, including real estate, cars, vacations, education, food, activities, clothing, and so forth. Then there’s a consideration of personal values and outlook about the world around you, where you see yourself in relation to others, your level of optimism and expectations about how much catering society owes you and your children. These are just some of the many additional factors.

  4. Do I think I am MC for my area? Survey says no. Do I still *feel* MC? Yeah.

    I think when most people talk about the “middle class,” they are characterizing by feelings vs. data. I.e., “poor” = menial jobs and/or public assistance, minimal education; “rich” = not having to worry about money (e.g., not “can I afford to send my kids to private school” — “rich” means not even having to ask the question or make tradeoffs). Ergo, since I am neither 1 nor 2, I must be MC. People feel MC because they ascribe to the MC values they were taught growing up — the value of an education, the value of hard work and making your own way (because no one was going to hand it to you), the value of finding a good partner and having a family, the value of putting something away, etc. But also the knowledge of how fragile it all is — you need an education and hard work because you don’t have the safety net of a big inheritance; you need a partner because two incomes makes it easier; etc. And you can never feel “rich” when one job loss is all that stands between you and falling off the upward mobility ladder.

    I also think there is some generational “anchoring” going on. My mom the college prof who made $22K/yr was able to send me to a top-tier private school, with a whole bunch of grants and just a few loans that I easily paid off in 2 years. My dad didn’t have to worry about retirement, because he had a pension, so he happily drove a (used) Porsche on a sole-provider’s chemical engineer’s salary. Those expectations are no longer achievable for today’s MC, because the world has changed — both tuition and admission standards have increased far faster than inflation, and pensions have largely gone the way of the dodo. But it’s easy for those kinds of measures to seem like symbols — or signals — of MC. And when those aren’t as achievable as when you were a kid it provides a perspective that says “I’m barely hanging on” instead of “wow, I am SO much better off than my parents were at my age.”

    And then the other aspect of those examples that I just thought of is that maybe that’s not just anchoring, maybe it’s all part of our current “ownership” society. I.e., when my dad was an engineer, maybe making the equivalent of $75K, he also received thousands of dollars a year in invisible supplementation from the government and his employer — full pension, fully-paid health and life insurance, government grants to cover the (much lower) college tuitions, etc. Today, those are largely no longer subsumed in your salary — if you make $75K today, that’s usually it, and the costs of retirement savings and insurance and college savings all come out of that pot. So maybe part of the problem is there’s really no apples-to-apples salary comparison over time, and if I’m making the same amount as my dad I’m in fact *not* as well-off as he was, even if I’m still “MC” by today’s metrics.

  5. No, we’re not middle class but maybe we are for our little area. I’m reminded often of what a little upper income bubble we live in because I work with a lot of middle class people. There is a woman in my office who was describing the birthday party that she had for her daughter yesterday. She noted that her daughter’s birthday was earlier in the month but because her rent was due around the actual birthday, she couldn’t afford to have the party until she got her paycheck last Friday (and this was a party hosted at home). It’s been so long since I had to legitimately worry about paying for non-recurring expenses that I would never call us middle class.

    I agree with Milo’s assessment. My sister and BIL have salaries that are probably middle class in the NYC metro but have managed to amass quite the pile of savings due to living in cheaper locations prior to their move up there and frugality.

  6. I *feel* (upper) middle class in that I think I have middle class “values.” We are well above the average income for our area, but I really can’t think of anyone who seems to be close to the average. So, either there is a lot smoke and mirrors going on, we have a lot of people who have lots of wealth but not income or there is something off about the way the stats are determined. Maybe a combo of all three?

  7. Do I think I am middle class for my area? Actually yes. Not too many years, ago, DH and I were almost bankrupt, we are no longer. We make far less than some families, in the area, and far more than others. I still work, my husband works far too many hours. Our kids go to public school, and we are just beginning to realize that they will probably go to private colleges, which we didn’t budget for when they were younger.

    Regarding the pension/employer paid health/life insurance? My dad was selfemployed, my mom was a SAHM. The pension/health insurance thing was not part of my experience growing up. Doctor/hospital bills were paid out of pocket, except for my dad’s veteran benefits.

    I am significantly better off than my parents, although my kids have a significantly harder time getting into college than I did. So much has changed over the past generation that it is really difficult to compare.

  8. And on the flip side, I read this earlier this morning: http://www.buzzfeed.com/annehelenpetersen/basic-class-anxiety.

    It seems to me that the referenced grandma *is* MC. So maybe the first article I linked had it wrong, and that the real problem is that MC isn’t “aspirational” any more. Younger voters don’t hope for their grandma’s life shopping at Costco and drinking Folgers; they don’t even “aspire” to being able to afford Starbucks and Target and Uggs. All of that is just too “basic,” too bourgie.

  9. Our accountant is a good family friend, and looks at our income taxes every year and exclaims ‘Did you know you were rich?!’ The running joke being, of course, it looks like that on paper compared to national averages, but based on our location, I’d consider us middle-class.
    Though once you take into account the list from the WP article (childcare, housing, transportation, student loans, yikes) it begins to feel like one can never get very far ahead. We’re still in the earlier stages of this, where childcare costs are high, and we still have the benefit of time in regards to investments, but those facts are not as comforting as I’d like.

  10. “if you make $75K today, that’s usually it, and the costs of retirement savings and insurance and college savings all come out of that pot.”

    Not exactly. 5% 401(k) employer contribution on that $75k, 8% growth, 40 years working is just about a million dollars. Annuitize that for $60k per year, and you’re probably better off than with the pension. (And that’s JUST on the employer contribution, to compare apples to apples.)

    And you can still have the used Porsche for about the cost of a new, mid-level Camry:


  11. Actually, I’m kind of surprised by my own just-for-fun Craigslist example. Part of me wants to get that Porsche now, just to give my neighbors something to talk about. It wouldn’t be an everyday car, and not in that bright red.

  12. Milo, if you are middle class, I’ll eat my hat. ;)

    We are not middle class but I still feel that way. Like LfB, my definition of “rich” is “never having to worry about spending, just do it”.

  13. Mathematically, we are above middle class. But both DH and I are very junior at workplaces where the people just a few years older make a ton of money, so we feel poor around people from work. We also save more and spend less than most people in our neighborhood, so we feel like we look relatively poor sharing our economy car while our friends are driving BMWs.

    What LFB said about generational anchoring is so true.

  14. I think a big problem is that in many parts of the country, you need to be upper class in order to live a life that conforms to what we think of as middle class. The median household income in my town is $94,000. I cannot imagine one could have kids and own a house on that income in this town, so I am guessing that folks at that income level are living in one of the many apartment blocks in the town. That is fine, of course, but not what we picture when we think “middle class”.

    I also think using town or county income data can be very dicey because so much depends on the demographics of the area. For example, that $94,000 is misleading for my town because there are many retirees on social security and pensions. They usually own their houses, so they are living a middle class lifestyle despite having a lower income. We also have many families in this town living in a house that has been in the family for generations, which also skews the sense of what is middle class here.

    But overall, I think people who truly are at the middle in terms of income cannot afford the traditional middle class lifestyle. That is probably leading to the sense of despair over the middle class, as evidenced in today’s NYTimes article

  15. “5% 401(k) employer contribution on that $75k” — @Milo — really? I’ve never had a 401(k) match at all; DH’s has maxed out at 3%.

    Good point, though — hadn’t thought about the match. And I still have fully-paid healthcare, too. It’s just that those things feel more like endangered species vs. entitlements.

  16. I did a similar comparison to Mooshi, but used a COL calculator for my current zip and childhood zip. They are within 10% of each other in terms of COL – very expensive. But the census data shows my current state’s median income at $54k and my childhood state’s at $68k. I can believe those numbers for both states but know full well that a family cannot own a home in either state on those incomes.

    I know I am middle income, but am on the cusp of UMC. I doubt I will ever “feel” UMC or rich or whatever because I spent most of my life in the lower middle class life. Some lessons are hard to unlearn.

  17. “@Milo — really? I’ve never had a 401(k) match at all; DH’s has maxed out at 3%. DH’s has maxed out at 3%.”

    Does your DH simultaneously have a defined benefit plan?

    I think for the hypothetical $75k engineer who is not covered under defined benefit and not eligible for incentivized profit sharing, at least 5% is pretty typical.

  18. Am I middle class? Hell no. I just paid a $550 A/C repair bill without blinking an eye. It will not effect my way of life. I did not have to dip into emergency savings. I have college savings and retirement savings. I am in a better place financially than most people in this country.

    We are not rich–my kids go to public schools and I worry about paying for private college. I clip coupons and buy about half of my clothes used. However, even though I’m frugal and worry about our financial future, I am not middle class.

  19. The COL calculated for my neighborhood is $83,000. It’s probably much higher than if I lived in the suburbs, but I view my house as a luxury purchase. We paid an insane price to live inside the city, so that we could have short commutes. However, this is a choice. If I were truly middle class, I could not afford to live in my neighborhood.

  20. UMC, but that is because I live in a burb of NYC. If I am truthful, I know that if we took our income to many parts of the country, we would be wealthy.

    I might have shared this already, but I was able to relocate to Tampa with my NY salary. It was a long time ago, and that part of Florida was very inexpensive as compared to the southeast coast of FL. I didn’t have to pay rent because it was paid by the bank, and I actually felt rich. It was the first time in my life, and it was a strange feeling. It was just me, and I could buy anything I wanted at any time. It was short lived as I love back into my real apt in NYC six months later, but it was a magical feeling to be shopping and to be able to buy anything.

    The reason that we don’t feel rich here is that there is always someone (or many) living in much larger homes with gorgeous interiors, pools etc. If we stay in a 4 or 5 start hotel once a year, they do this several times a year. If I finally lease a luxury car, it is the base model and I started to notice that many people are driving cars that cost 2 to 3 times as much.

    I spoke to my college friend that is selling her townhouse in the San Fran peninsula. She sent me the listing and it is listed for $1.2 million for an attached townhouse with one car garage. It is not a gated community, decent schools, but she expects it sell for another $100-200K over asking. If you put this same townhouse in any surrounding county of NYC – including NY, NJ and CT burbs – it would not sell for more than $750K. Even though I think it is expensive here, there always seems to be another part of the country that has even more wealth….where the bar for middle class seems so high.

  21. My mother wants me to get a nicer car but I refuse and gave her the “it is all paid for speech”. If I examine all the things we do, private school and vacations where we fly instead of drive are our two luxuries. Based on where we live, we are UMC. Being a two income family is a part of what puts us there. Our neighborhood consists of families with one professional level income and an average of three kids per family. We feel at the same level as our neighbors and don’t feel like we are working with no savings to show for it.

  22. Houston, the annual COL in my suburb, according to the link, was $68k. However, I don’t know that that figure includes the cost of commuting into town.

  23. It was pretty funny talking to my mother about my car…I don’t think she bought my MMM speech.

  24. “I think for the hypothetical $75k engineer who is not covered under defined benefit and not eligible for incentivized profit sharing, at least 5% is pretty typical.”

    I’ve never had less than 4% guaranteed 401(k) match in any career job. I’ve always worked for medium to large companies.

    I know I’ve said it before many times here, but I feel UMC. Maybe because I grew up actually Middle Class, so I can see that my financial concerns are on a different level from those of the true middle class. Like Houston said – we are in a better place financially than a very large portion of people in this country, especially for our age, even living in a major metro area. Sure there are millions of people with way more than us, but I don’t really frame it that way in my mind.

  25. Same feelings here as with many other Totebaggers. Clearly we’re not middle class anymore, but because we can’t just charter a jet over to Cinque Terre for the weekend, I don’t feel rich either. And I think I’m one of the few here with downward pressure on my car choices. If I showed up at an actual middle-class Mennonite church in a Porsche, or even an Audi, I’d feel bad. I’d be showing off and failing to give all that I have to the poor and follow Jesus. And everyone at the library is so earthy-crunchy that they ride their bikes or take the bus to work. The only people who appreciate my comfortable car are the old people I drive around to doctor appointments.

  26. Milo, Jeremy Clarkson was just mocking Kiefer Sutherland for having a Panamera a few months ago. Of course Jeremy mocks everyone for everything.

  27. A Panamera was ahead of me at a stoplight over the weekend. I said to my kid “how ’bout that for my next car?” (which I would get used). He said why would I need another 4-door car?

  28. @Milo – that price would make DH drop dead ! Whenever I discuss cars with DS, DH is listening to make sure I don’t go running out and get myself a luxury car. He got himself a used car a few years ago that is even cheaper than mine.

  29. “He got himself a used car a few years ago that is even cheaper than mine.”

    FIL was a little bit suspicious of all the service items that the Toyota dealer recommended for their 10-year-old minivan, so, (for the second time in several years), they dropped it off at my favorite independent mechanic this weekend on my recommendation. MIL is borrowing my extra 12-year-old car this week.

  30. Clearly not MC, but not too far above the average for our zipcode.

    I truly think a lot of our feelings are kinda like the 1% of the 1% (we’re not 1%, just to be clear). Our income and wealth are standard deviations to the right of the mean for the USA, State, County which are all roughly the same in terms of HHI. Our town and the private school our kids have gone to are full of parents (much) farther to the right of the bell curve, so, sometimes we wish we could do what “they” do, instead of having to make decisions based on concepts like value.

    Certainly not to the degree of ‘wait till the rent/mortgage gets paid’ or being unable to repair/replace a blown water heater the very day it fails, but still we consider large optional outlays and decide frequently that we’ll be better off either spending less or not spending at all.

  31. We are not middle class, sometimes we feel it based on our neighbors. I think that I “feel” middle class and espouse middle class values (do a lot of my own stuff around the house, keep cars for like a decade, almost never shop at Nordstrom) but then the other night I engaged in a very earnest discussion with a few girlfriends about how important a really good (like $200) blow dryer is. “Really, there’s no other way to get it really straight. It makes all the difference!” and I was like “oops my upper crust is showing.” I do feel very privileged to not have to give single thought to food costs.

  32. RMS, one of the other kids at our Sunday school gets dropped off by dad in the new Maserati.

    We are not Mennonites. Obviously :)

  33. Moxie – which is this magic blow dryer ? I am constantly on a quest to get the frizz out of my hair. For important occasions I just go to the blow out salon and pay up instead of wasting gobs of time without the same result.

  34. “when my dad was an engineer”

    Somehow, that does not surprise me. You seem much less like the non-engineers of the engineering ‘jokes’ (e.g., one central to a recent post) than most.

    I’m also guessing that having an engineer for a dad made it more likely that you’d end up marrying one yourself. Your kids, getting it from both sides of the family, will probably also have engineering as an option when it comes to choosing majors.

  35. Like Atlanta I work with a lot of actual middle class people so I don’t feel middle class.

    But…you’ll remember my $140 Whole Foods quesadillas? A few weeks as an experiment I drove out to Market Basket, a local grocery chain noted for very low prices and for treating their employees very well. Anyway, I was able to buy all the food for 4 people for a week for $150. I figure if we just went to Market Basket and I just ate dinner at Wendy’s on the road – we’d save about $2400/month. That’s the lease payment on an S550 and a nice boat. Or, a nice summer home.

    I get the impression a lot of the people buy the boats, cars, vacation homes, bigger regular homes, etc. as a way to enforce discipline.

  36. Milo- you should buy the Porsche. Older models hold their value pretty well and cheap to insure if it is a low mileage/weekender car. I look at it as an alternative to a boat.

  37. I was thinking about DH, born slightly before the baby boom, whose stand alone financial position was an example of what most people would consider comfortable middle class. When we married, he had a defined benefit pension, indexed, which was equivalent to a single life inflation protected annuity purchased at his retirement age of 62 for say 1.25M. In addition to that, at 66 he started to collect SS at 85% of maximum. He had a post divorce 800 sq ft condo paid for worth 175K (yes, those do exist in Boston area) and what was left to him of his retirement savings – about 200K pretax. Because his wealth was in the form of annuity income not assets, he looks middle class and no more, prudent and comfortable engineer-type middle class, but hardly well to do. However, he had few worries. He wasn’t going to outlive his money and he would always have a place to live. Give him two such modest apartments, one in Florida as well, $1.25M in assets, no pension and the same SS and he appears to be UMC, when his snapshot financial position is exactly the same, but he has to worry about how to invest and draw down his money.

  38. How long could you go buying only what you need?

    Granted you already have what you have now (good and bad: house and furnishings, car, clothes, other things; assets and debts). But could you go a week? month? buying only what you truly need?

    I sometimes play this mental game with myself and I always end up with a pretty broad definition of ‘need’. e.g. in even just decent weather we typically grill something for dinner on Sunday and I usually go to the store that day to buy the meat/fish etc. Salmon, which at least 3/4 off us love, is the lowest priced fish. But to have it every week? Nah. Sometimes its swordfish or something else much more costly than salmon. Now, I ‘needed’ to buy something to grill and we had decided it would be fish, and I bought swordfish. Did I buy something I didn’t need? Clearly if you want to use the definition a la “well, you could have bought chicken for 10% of the price of swordfish and been just a fulfilled both in quantity and nutrition.” But if you say ‘I needed to buy something for Sunday dinner and I bought swordfish”, maybe not.

    Just remember, our economy and many of our personal wealth statements wouldn’t be what they are if people only bought ‘needs’. I.e. substitute water for soda. No one ‘needs’ soda.

  39. I look at it as an alternative to a boat.

    eh, I’d rather have the boat. It fits my image better–you can’t blast “Redneck Yacht Club” from the stereo of a Porsche.

    I’ve actually looked at boats recently, and talked to DW about it. But I run into a brick wall when I realize that the type of storage I would want–covered electric lift–is about $2500 per year. And this is the alternative to buying a used pickup truck that can tow it up a launching ramp.

    In comparison, it costs about $250 or so for a full day weekend rental in the summer. On one hand it feels frivolous to drop a couple hundred dollars, plus gas, for a day out on the lake, let alone doing it every weekend (assuming we were even available every weekend). But mathematically speaking, clearly I could book in advance 10 Saturdays or Sundays over the course of every summer before I’ve even matched the storage costs–and that’s before I even buy the boat, so add on capital, maintenance, repairs, insurance, and taxes.

    It just takes more planning to book in advance. But our jobs allow for this, so we should take advantage of that more.

  40. Louise I have the Parlux 3200 professional ($225) its crazy but it dries my very thick hair so quickly and makes it nice and straight. Don’t know if it is the heat or the speed or the “ionic” whatever! Of course our housewife math added up the number of “blow outs” you get as savings blah, blah, blah – it is still ridiculous, but I love it! Wanted to get it on Amazon, but freaked out because some reviewers suggested the ones there weren’t authentic so I bought from the company. My two cents. I am torn between loving it and feeling really disappointed in myself.

  41. Did anyone watch Mad Men last night? Are we allowed to talk about it? Vague spoilers ahead.

    I totally didn’t see what happened coming. But in retrospect, I totally should have! I don’t think Peggy, Joan, Pete or Roger will be in the last episode. I think we got their endings as much as MW will allow. I am in mourning.

  42. On another front, George Zimmerman appears to have been involved in yet another shooting.

  43. Rhett — I’ve mentioned before that for many of us who live near a Market Basket, shopping there is an important part of how we make our monthly budgets work. During the strike last year I was buying my groceries at Shaws, and the price difference was staggering.

    Our current household income is right at about the median for our town, as is the value of our house. For us, being in the middle-ish of our community feels very comfortable. And like many others here, we fully understand that being in the middle-ish of an UMC Boston-area exurb puts us way ahead of many people in the U.S. We feel lucky.

    Re. hair: Even with a $2,000 blow dryer, I wouldn’t be able to get my hair straight on my own. I gave up on straight hair long ago, and have embraced my natural curl. On the rare occasion that I want something more sleek, I go see a professional.

  44. I gotta ask, as someone who remembers how everyone got their hair permed back in the day, why is it so important that all hair be perfectly straight? The amount of energy and money being expended on this is mind boggling….

    And did everyone see the NY Times article on the horrible conditions that NYC manicurists work in? Do we really need to exploit immigrants and poison them for perfect nails? It isn’t that hard to open a bottle of Sally Hansen and do it yourself.

    Crankilly yours….

  45. “Your kids, getting it from both sides of the family, will probably also have engineering as an option when it comes to choosing majors.”

    I literally laughed out loud, as DD’s intro night for “Project Lead the Way” was last week (HS pre-engineering course, 5 classes in 4 years).

    @Milo: your boat math is why we ended up joining our golf club. I love golf, but always found excused not to play, because it seemed frivolous to spend $100-$200 for a round (counting food, not counting babysitting). I finally realized that was stupid, because we could afford the $$ just fine. So we joined, and now we basically pay up front as our monthly dues — and our incentive is to go play more to bring the per-round cost down. :-) Financially, it makes no sense, but psychologically, it enables me to go do something I really enjoy on a more regular basis.

  46. I thought I grew up very middle class, but it turns out my parents, and both sets of grandparents before them, were millionaire-next-door types. I feel pretty middle class where I live – there are plenty of people who make a lot more money than I do, but I know I’m better off than many others and my household income is well above the median. I think I will feel a lot less Upper MC when I lose the dual income and have to move to a smaller home – and my solo income is definitely closer to the middle. However, I know that I’m very fortunate to have retirement & college savings, not to mention a rental property that pays for itself and gives me a cushion for the future.

    Rocky, We don’t have many Mennonites in my town, but a lot of earthy-crunchy people like your library folks. Everyone talks a good game about bike & bus (students and others do use public transit just because parking on campus is a nightmare), but there are a lot of Subarus, Toyotas, and Hondas for the rest of us. Only the football coaches and a few lawyers drive fancy cars.

  47. Here’s my cranky comment:

    “Am I middle class? Hell no.”

    I’m with Houston, and it kinda bugs me that so many top 10-percenters seem to consider themselves middle class. I know people are using various definitions for middle class, but I guess that I would say
    1) Hey folks, this is what upper class looks like these days.
    2) It’s a bit disingenuous to lump yourself in with the families making $60,000 per year just because you desire more.

  48. “How long could you go buying only what you need?”

    OK, it’s a little scary, but I got a little happy shiver reading that question. This is clearly my wheelhouse. :-) If it were a competition/test, I could do so forever — and with a pretty tight definition of “need.” I am very, very good at stretching grocery budgets, not buying clothes/stuff, and finding free entertainment — it’s how I grew up.

    I like knowing I could. But I much prefer not *having* to.

  49. Milo, Maybe you should just buy lake-front property first. Then you’ll NEED a boat to go with it.

  50. “Maybe you should just buy lake-front property first. Then you’ll NEED a boat to go with it.”

    What do you think got me looking at boats?! DW talking about property, and I figured “well, we should at least try boat ownership first.” That’s how I ended up going full circle that we should do absolutely nothing permanent.

  51. Daily irony alert: DD got the dreaded “make something recycled” project. After much dithering and procrastinating, she chose a candle lamp from a mason jar covered with plastic spoons (much nicer than it sounds — you break the spoon part off and cover the jar like fish scales). So our final tally for this project was:

    1 quart jelly jar — actually recycled from our pantry!
    1 box plastic spoons — new; special Wegman’s trip to get by the deadline
    1 hot glue gun — new, special HD trip to pick up when regular glue failed
    1 box crayons (to melt for candle) — new, special CVS trip to pick up for project
    cupcake liner (candle mold), wick (butcher’s string), tape — available from pantry, but single-use

    So, basically, one thing that was actually, you know, recycled. I’m pretty sure the environmental benefits of this were outweighed by the waste generated in newspaper, misapplied glue, messed-up tape, gas for the car, and spoon handles — not to mention the kiddie cup that had to be tossed after being used to microwave the crayons for the candle.

    Added bonus: it was due today! So my Mother’s Day evening was spent smoothing out the frustration and tears and providing the needed parental tape assist after she ran out of glue sticks.

  52. LfB – Too much ! though I had a hearty chuckle.
    DS got done with a science fair project. I thanked the teacher for not making it a “Parental Science Fair Project” all the way. I helped child with gluing to presentation poster board but that was it. I had to google images of finished projects because I personally had never done a science fair project before and wanted to see sample projects.

  53. I feel like we’re UMC. Probably accurate. I remember having to count in my head the cost of the groceries as we walked through the store (and putting things back we couldn’t afford), so blithely shopping for groceries is a big deal. That said, I remember my middle-class relatives having homes with more space, replacing cars every 5 years or so, having a mobile home in a vacation spot and/or an RV for camping, etc. None of those older relatives are that worried about retirement with pensions and SS, and they’ve been covered when needed by medical insurance.

    In my generation of the family, I am UMC, which means I can afford to save for my kids’ college and my retirement, I have a small home (in a spendy, convenient area), no vacation home, and we drive ours cars to the ground. We aren’t sure what the end line of personal savings would be such that we could safely retire and not outlive our income. Our cousins? Many have inadequate medical insurance, won’t have more than SS if/when they retire, have bigger homes in lower COL areas, pinch pennies at all stores at all times, and are often a lost job away from disaster. Big expenses are usually bailed out by the grandparents. So yes, I”m not middle class, but I’m living the way I remember my middle class aunts and uncles living. Which says something to me about how hard it is out there for most genuinely middle class folks, all the commenting here about how easy it can be notwithstanding.

  54. Regardless of how much money we may make per year or how much wealth we accumulate, I will always consider myself part of the middle class. You can’t erase how you grew up and those values run deep. But, that is a different analysis than whether I am in a high income household. The first S in SES must mean something.

  55. Upper middle class. Professional jobs, no need to sweat repair bills or wait till payday for a grocery run, can take big family vacations for five. Able to save, but not to save so much that college costs won’t be a worry. And if we had cleaners, yard service, frequent takeout, we wouldn’t be able to save the same way and the vacations wouldn’t be so feasible. If we were sending the kids to private school at $20K+ per kid we’d be very tight.

  56. Cat S – Weiner was on Fresh Air, talking about how many of the characters have had their last scenes. I figure Pete has, Don’s entire family, Ken, Joan, but who knows. For the past two weeks, we’ve been trying to guess who we’ve seen the last of.

  57. The other day I was grocery shopping and overheard a family discussing what fruit to buy and once they hit $8 they were done. There was some back and forth about replacing the strawberries with blueberries. I think of that family as middle class. Sure I have a ‘vague’ budget of how much I want to spend, and I won’t pay $4 for blueberries, but that is because those $4 are usually out of season and don’t taste very good, not because I have strict budget I need to adhere to.

  58. so blithely shopping for groceries is a big deal.

    Remember BrownDog from TOS? She had said one of the important things to her about having money was that it allowed her the luxury of not sweating the small stuff. For me the tension is always between my intense desire to not sweat the small stuff vs. the wonder if we wouldn’t be happier sweating all the small stuff so we could afford more of the big stuff.

    I noted this when Rio was surprised that I thought someone making the Totebag median – $270k which is about $15k/month take home – would be able to speak by on $10k a month for 6 years to cash flow college with $120k in savings to get over the 2 year overlap.

  59. Milo, I’ve gone through a thought process similar to yours with the boat; in my case, it was for a timeshare or vacation home. It just didn’t pencil out, and we also don’t like the restrictions such ownership would place on where we can go on our vacations.

    There is a couple we know who bought a timeshare and use it every year. It’s on Kaua’i, and they always make a point of making a stopover here so we can have dinner together. The timeshare makes sense for them because it forces them to take a vacation every year; for them, the vacation is as much about decompressing as anything.

  60. Rhett– I hear that tension. My dad made a point of showing me what he was saving for retirement and explaining that was *why* we spent so much time sweating the small stuff. This is partly why I still watch a lot of the small stuff. We can save more because I’m not frittering too much of it away, and generally when we do fritter, we realize we’re doing it. (Hello ridiculous Vitamix purchase that I still love.) But much of our income is accounted for in big expenses. We could cut our grocery bill some by being careful and save a couple hundred a month, but not a few thousand a month. We already limit takeout, mostly eat home cooked food, etc. None of the things I know to do to penny pinch would help at this stage of our lives with the mortgage and child care, which far and away are the biggest expenses. We’d divert money from savings if we had a medical expense, etc., but I don’t think we could make small cuts that would free up 1/3 of our hypothetical income.

  61. I was under the (apparently mistaken) impression that Totebag median income was around $170k. And the original comment I was responding to said that it would be easy to squeeze out an extra 5k per month for college. At 170k per year, I stand by my comment that it would not be “easy” to come up with that 5k each month for 6+ years on end in a high cost-of-living area. Especially not for people who are used to living on most of what they make, which describes most Americans.

    Now I was raised by millionaire-next-door types and have always saved 25%+ of what I make. But I am not typical at all, at least judging by the lifestyles of my similar-earning peers.

  62. However wealthy I become, I wonder if I’ll ever overcome the slight urge to go get my free ice cream cone at the Haagen Daz Free Cone Day, which is tomorrow!

    Here’s my confession related to that: I took my kids to get the free breakfast taco at Taco Bell last week. But the main reason was because one of my kids is a mad Taco Bell fan, and it was kinda fun to do. However, after that disgusting taco, I doubt I’ll be going to TB any time soon.

  63. Lake house ownership makes the most sense for the grandparent generation, in my experience. With little kids you may be able to spend most weekends at the lake house, but by age 10 or so the oldest will already have many weekend commitments for sports and that sort of thing if you’re a typical Totebagger. And then you’re constantly feeling frustrated by how little you’re able to get to the property that you’re spending so much money on.

  64. LfB already pointed out that most people are making this assessment based on their feelings and peer group, not on data. If the median of this group is really $270k, then the median is 97th percentile nationally.

    Part of why people at that income level still feel middle class is that they are congregated in high cost of living areas. I like this map of super zips.

    I feel comfortable, but I am also unbothered that there are millions of people with nicer cars, nicer houses, better restaurants, better educations, etc. My diet is adequate. My appearance is adequate. My medical care- a much bigger worry- is adequate. My home is adequate. I can afford what is allegedly the best infant daycare in town and if it’s inadequate, I can quit my job and take care of her myself. Many of our friends who attended college are still paying off their own college loans, so their children will be financially on their own for college. We have no college loans and DH and I value supporting our kids (at least partially) during college.

    My worries are mostly about the choices that money brings- should we buy plane tickets to visit my mom more often? Should I try to pay for my children’s public university education or will that make them lazy and entitled? Should we buy a new minivan or a used one? How should we invest the 401(k)? Will we have enough money so we don’t have to move in with our kids?

    These are not real problems.

  65. For me the tension is always between my intense desire to not sweat the small stuff vs. the wonder if we wouldn’t be happier sweating all the small stuff so we could afford more of the big stuff.

    That’s a pretty good summary.

  66. “but by age 10 or so the oldest will already have many weekend commitments for sports and that sort of thing if you’re a typical Totebagger.”

    +1 This was us. Joined the golf club when the oldest was 8, then the very next year he started playing baseball beyond the end of school, into mid-late July. If it wasn’t a game, there was practice most nights. Combine this with the Wednesday night league players and Friday night “Scotch” game so taking the kids out to play a few holes and get a hamburger for dinner became limited and pretty soon we were unable to get much value out of our membership. So we dropped it.

  67. And then you’re constantly feeling frustrated by how little you’re able to get to the property

    That’s why you rent it out during those years.

  68. Milo, I’ve gone through a thought process similar to yours with the boat; in my case, it was for a timeshare or vacation home. It just didn’t pencil out

    I think that for people like us, the Internet has made renting (of all sorts of things) a lot cheaper than it used to be. All the rental agencies have to compete with VRBO, etc. You can even rent motorhomes from small, one- or two-vehicle businesses on Craigslist. It’s like you have to be using something just about every day to make ownership pay off, so your house and your primary vehicles count. Everything else, financially you’re better off renting.

    and we also don’t like the restrictions such ownership would place on where we can go on our vacations.

    Yeah, that, too.

  69. “if we wouldn’t be happier sweating all the small stuff so we could afford more of the big stuff. ”

    That’s us, or maybe me more than DW. I’ve sweated the small stuff my whole life (I really like the way WCE and LfB describe my spending tendencies as a logical exercise in value optimization),, but we went out of character on our biggest purchase, our house. We way overbought relative to what we need, and relative to all our other spending, but we truly enjoy it.

    “If I were truly middle class, I could not afford to live in my neighborhood.”

    Our home is in the next subdivision over from where DW’s parents lived, and where DW grew up. When she was a kid, anyone living there was considered rich. When we were first married, when we visited her folks, we’d sometimes drive there, look at the houses, and tell each other that one day we’d live there. Then we’d look at each other and laugh, and say, “yeah, right.” Fast forward a few years, DW has a good job offer to move back, the real estate market has cratered, and we’re able to buy something beyond our dreams of a few years prior.

    A lot of our SES is based on luck, but our sweating the small stuff put us in the position to take advantage of the depressed prices.

  70. Mooshi – Straight hair has been “in” for awhile. I have A LOT of hair and it is neither curly, nor straight, nor a beautiful natural wave. It has a lot of “body” but it aint pretty on its own and has to be made to be either curled or straight. Did the hot roller thing in the 80s, now I like it straight and sleek but almost never wear it down in the summer because of the humidity.

  71. “That’s why you rent it out during those years.”

    And take advantage of the two weeks of personal use the IRS allows without affecting its status as a rental, leaving all associated expenses 100% deductible.

  72. But much of our income is accounted for in big expenses.

    Which is the point. At a “reasonable” % on income a totebag median income mortgage would be $6725/month. Almost everywhere you’re able to buy a home at 2/3 that amount and it will be adequate. And, in most places you can buy an adequate home for far less than even that.

  73. “Straight hair has been “in” for awhile.”

    In the US, it apparently goes back to when Jennifer Aniston got that hairstyle while on Friends. I believe it replaced the “Rachel” hairstyle.

  74. It’s great that my in-laws have two vacation places. We looked into getting one of our own on one of the nearby lakes when we first moved here. Financially it wouldn’t have been a problem since we had cash proceeds from selling our house in the old place. But we decided owning would cramp our style, and since we were new to the area and had zero experience renting a place we were not using decided against it. Long view: probably the right decision. For me at least the hassle of maintaining/renting a place, or managing the rental company we’d hire, would have degraded my supposed enjoyment of having a 2nd place.

  75. My philosophy on the vacation home is don’t get it if you cannot afford it outright and if you can’t afford to lose it. We don’t have one.

  76. “I thought I grew up very middle class, but it turns out my parents, and both sets of grandparents before them, were millionaire-next-door types.”

    This gets to one key question of the definition of middle class– is it based on income, or on wealth?

    A lot of the MND types went through their entire careers earning middle-class incomes, but accumulated more than middle-class wealth by living below their means, IOW, their lifestyles were less than their less than MND peers in income. One could argue that those who accumulated wealth in that manner had greater middle class sensibilities than those who were more profligate with similar income.

  77. Regarding vacation homes–I can barely keep up with the house we live in. I can’t imagine keeping up with two homes!

    ““If I were truly middle class, I could not afford to live in my neighborhood.”
    We are still living in the first house we bought. The only reason we could afford it way back then is that the owner got divorced, then transferred to another country, and wanted to get rid of it quickly. Like Finn, we were lucky.

  78. We were lucky in our real estate timing too. We bought at the trough, just before things started to creep back up.

  79. “we ended up joining our golf club.”

    We helped BIL join a golf club. He had a chance to join, but didn’t have the cash, so we loaned it to him.

    He loves to golf, but claimed the value of membership is in the networking. He paid us back quickly, and has told us that the membership has more than paid for itself in networking benefits.

  80. rhett, can you explain the calculation to me because I am confused about how there is so much available money for a mortgage payment. Is this in a state without income tax like Texas or FL? The reason that we have less money saved because we live in NY is taxes. I think CoC brought this up recently on another post, but taxes are rarely mentioned on here when we discuss high expenses in our budgets. I would move my “status” out of UMC in the earlier post if I was able to actually bank more of the money that we earn. I calculated how much we paid in taxes in 2014 including an approximation of sales tax – it is so much money that I never want to go through this analysis again. Taxes absorb so much of our income that it does impact the choices I make with regards to size of mortgage and car payments.

  81. Milo, I’ve always heard that the two best days of a boat owner’s life are the day they buy the boat and the day they sell it.

  82. Moxiemom, clearly my long lost sister – I have similar hair – it is moisture dependent, and after nearly a decade in the same location, I can not figure out a cut or style that is not a mop of fluff. Mine is unevenly wavy, so even if I try to embrace the culs, I will have chunks of straight hair that lay on top of everything. It looks amazing when it is blown out. I used to be able to do that myself when I went to a gym that had hand dryers mounted high enough I could stand under them and use both hands to brush and smooth. Now (as in right this moment) it is often piled in a bun on top of my head or clip. I can’t imagine how much money I would need to have in order to feel like I could afford $50 twice a week for something so frivoulous (especially as there is no expectation of good grooming in my job – I am the only one here today not in clogs and scrubs).

  83. Rhett– My mortgage isn’t anywhere near that high. I do have childcare expenses eating up more income, and perhaps as that is changing and my kids are getting older, we’ll be saving more money. But I also think I live somewhere that is not “almost anywhere.” A 2/1 in my neighborhood just listed for over $800K. Many houses are going well over asking and are gone within a week. I can see why housing expenditures here are so large.

    Like someone else said above, we save a pretty significant % of our income each month. So we could divert that for a major expense, but it’s still gone out of the budget, and it’s the last thing I’d want to cut from the budget. Part of it is that college is far away for my kids, so the idea that I won’t feel the need to continue saving at this level sounds pretty foreign. The ability to save $ each month is my security blanket.

  84. “I calculated how much we paid in taxes in 2014”

    DH does this every year. Nothing good ever comes from it. He fails to include sales tax. I’ll remind him next time.

  85. “We were lucky in our real estate timing too. ”

    But luck in timing was only half of it. You had to be ready to take advantage of the opportunity, and willing to take the plunge.

  86. “What is the difference between a golf club and a country club?”

    You can swing a golf club.

  87. OK, actually, we helped BIL join a country club which happens to feature golf as its main attraction.

    It also has a very nice pool area. One benefit we derived from helping BIL join the club was that he was able to arrange for DS to have a birthday party at the club’s swimming pool one year.

  88. We looked into getting a condo in the mountains a few years back and decided against it. The problems that we saw with it were you either rent it out part of the time so you have to deal with that hassle (and we’d still want to use it more than 2 weeks a year – that’s the whole point of getting it – so we wouldn’t get the tax breaks) plus it limits the flexibility in owning it, or we’d feel obligated to go up almost every weekend. And then when you get to the point where the kids are doing sports and other stuff on the weekends, you can’t use it, so you’re back to trying to rent it out.

    As Milo said, with all the inexpensive rentals available now, it’s much simpler and just rent places when we want to. Plus that gives us more flexibility in where we go.

  89. “Milo, I’ve always heard that the two best days of a boat owner’s life are the day they buy the boat and the day they sell it.”

    There’s a lot of truth to that, I think. And it goes to much smaller levels, too. I’ve rented, and I’ve owned skis, and my current skis are so old that I just rented the last time DW and I went. There’s something really nice about handing all that equipment over the rental counter at the end of the trip and walking away free-handed vs. toting it all over your shoulder, plastic boots dangling everywhere, loading it into your car or putting it on the roof…

  90. Yeah, taxes. In some ways, isn’t that the point of a progressive tax system – to nudge those of us in upperclassland back down towards the middle class? If anything, it doesn’t go far enough – the really, truly rich seem to be able to evade a lot of taxes.

  91. Lauren,

    Whith two kids, a $6750 mortgage and maxed 401k what is the take home in NYC on 270k? My guess is $15k. You spend $6750 on PITI and spend $8250 on everything else. Am I not doing the numbers right?

  92. “As Milo said, with all the inexpensive rentals available now, it’s much simpler and just rent places when we want to. Plus that gives us more flexibility in where we go.”

    In my examples, I forgot to include the secondary market for timeshare rental points that Ada always mentions about Disney. So VRBO is like one degree removed from ownership, then this is secondary or possibly tertiary.

  93. Hijacking- I’m getting pretty frustrated with a place I volunteer frequently. Love the organization and what they do, but they keep increasing the demands on volunteers- for instance they gave me a hard time when I told them I was taking several weeks off to visit family out of the country, even though I told them more than a month in advance. Also dealing with high-pressure tactics to give even more time (Are you sure you can’t come in Sunday as well? We don’t have ANYONE! No? Well just what are your plans- can’t you move that to another day?) And just in general the environment seems very high on “constructive criticism” and demands and low on appreciation.

    Now the other day I got an email that they are implementing a strict professional dress code. Previously it was casual, like my day job. I’m pregnant and don’t otherwise need expensive maternity clothes, so this feels like the straw that is breaking the camels back.

    Am I right to be annoyed? I feel like if you want to run an organization on like 80% unpaid labor you can’t hold your volunteers to the same expectations as you do your professional staff.

  94. @Lauren — FWIW, the primary reason I do not live in NY is the COL. I would just have to work too hard to earn the money I’d need to maintain a reasonable lifestyle. It floors me to read the NYT real estate section and see that the property taxes alone are the same as or more than I spend on my mortgage!

    Even in MD, our marginal tax rate is now pushing 50% with the new Medicare surcharge thing added on. OTOH, my mortgage is $2,700/mo — and that’s a 15-year mortgage, in a nice neighborhood, with property taxes closer to $5K than $30K. It makes a huge difference both in how much I can save for retirement and in what I need to retire (it takes a lot more in the bank to throw off enough cash to cover a $30K annual property tax bill than a $5K one).

  95. “they gave me a hard time when I told them I was taking several weeks off to visit family out of the country”

    I would find somewhere else to volunteer. There are plenty of places that do great things that would *love* to have you in your casual clothes for whatever time you could spare.

  96. “we’d still want to use it more than 2 weeks a year – that’s the whole point of getting it – so we wouldn’t get the tax breaks”

    You could still get tax breaks, but you wouldn’t be able to write off 100% of the associated expenses; you’d have to apportion them between personal and rental use.

    What I remember from looking into this sort of thing before, at least for myself, was it only made sense if I could get something for well below market price, then turn over management to someone else. I think it makes most sense for me to put money in a REIT fund if I want to invest in rental real estate.

  97. Jeepers, anon, why have you continued to give them your time for even this long?

  98. I care a lot about the mission and it used to be an awesome and rewarding environment. It’s doing by far the best work on its cause in the area. But the expectations have sort of crept up gradually and it hit me the other day when I got the dress code email just how much it’s changed.

  99. “I’ve rented, and I’ve owned skis, and my current skis are so old that I just rented the last time DW and I went.”

    I really want to get my own boots. I’m fine renting the skis and poles, but if boots that fit poorly can really take a lot of the fun out of skiing, or even add a lot of pain.

    Unfortunately, there are no local ski shops.

  100. Anon– Yeah, I’ve never volunteered anywhere that demanding. If they want to strictly enforce a dress code all the way out of volunteers that seems…. counter productive, at the least.

  101. I am, by nature, a sweater-of-small-stuff. I couldn’t not sweat it even if I tried.

    We have really enjoyed having our beach place. I think all the cons of second home ownership that folks have identified are true. We have benefitted from our timing of the market, though, which makes the monthly bills of it not nearly as painful. Also, it’s hard to describe the pleasure of walking in on a Friday evening to a place that is fresh, breezy, uncluttered, unencumbered with reminders of daily life obligations…but it’s your own, so the sheets and towels are yours, your toothbrush is already there, the beer you like (or tonic water in my case) already in the fridge…

  102. Anon – I’m annoyed just reading about it!

    I’d find another place if you can’t/don’t want to give them specific limits on what you’ll do/the hours you’ll give and the clothes you’ll wear.

  103. “frustrated with a place I volunteer frequently”

    The nice thing about volunteer work is you can choose what you want to volunteer to do/ what cause(s) you want to support with your time. In theory, what you get out of volunteering should be pretty high on Maslow’s Hierarchy of Needs (the self-actualization part).

    When you get tired of them demanding more than you are willing to give, tell ’em to take you off the call list; you are too busy and have other things to do. If they don’t take the hint, tell them you have decided you’re quitting.

  104. “if I could get something for well below market price”

    Economist here: assuming an arm’s length transaction, how’s that work? Something is listed for $0.5M because everything else (comps) have sold for that. You offer $0.4M and they take it. Hasn’t the market just moved to $0.4M?

  105. I would love to have a second house on Cape Cod but DH does not want a second home probably ever. My dad’s house is getting small with the three of us + families. My ideal would be Atlanta year round and then head up to the North East for the summer. DH (who is probably correct) thinks if we ever bought a house up there, we would end up paying for my mother to live there. We’ve thought about moving up to CT/NYC to be closer to family and friends but can’t justify a. the cost without probable big increase in salary and b. the lifestyle of commuting into the city is just not for us. I think we have a better chance of becoming more balance sheet affluent down here.

    We got lucky with our real estate timing on our current house, bought around the bottom in 2011, from a financially distressed couple whose realtor told us they were financially distressed.

  106. @Anon — ditto HM.

    You get paid in money or appreciation, preferably both. If they can’t offer the former, they’d better come up with a whooooooole bunch of the latter.

    The only ungrateful wretches for whom I will continue working for free, despite the lack of gratitude or acknowledgement, are those I gave birth to. And even they periodically repay me with a homemade popsicle stick jewelry box.

  107. Of course the overly emotional pregnant brain thinks the dress code is passively-aggressively targeted at me because I’m at the awkward point where I just look bloated and everything fits poorly. Plus I’m sure I look haggard from the nausea and poor sleep. But I haven’t announced my pregnancy to them yet so I have no “excuse” for looking less than put together.

  108. We live in the NYC area and don’t pay a crazy mortgage. We’re paying $2300/month right now, and if we had stuck with a 30 year when we refinanced, it would have been even lower. I honestly am not sure what our property taxes are off the top of my head, but we have checked in the past, and not had total heart attacks. You can certainly live in Westchester without spending as much as the numbers I am seeing, though it will never be as cheap as say Birmingham Alabama

  109. “Holy sh*& ! Is a $6700 mortgage actually a thing?”

    I think the local cancer research center has something like an $8M mortgage payment. But that’s per year, so it’s not as bad as it sounds.

  110. Anon– Of all the people in the world who should get a pass on the dress code, I’d think pregnant women would be high on the list. I can’t think of what on earth you’d be volunteering for where perfectly put together would be the main criteria. My actual paying job understood the haggard from nausea and miserable stage and I got past it. I’d be more likely to guess that someone else led to this policy, but if it’s you? That seems way ridiculous.

  111. Holy sh*& ! Is a $6700 mortgage actually a thing?

    That’s the “conservative” number @ $270k. My mortgage guy said he’s seen it go as high as 44%. @ 270k/yr that’s $9,900/month. IIRC when LAGirl bought her condo she was paying 50% of gross. That would be $11,250/month.

  112. I am stuck in a volunteer thing that I am desperately trying to get out of. This year I am trying to do more for the school system in terms of volunteering because I had done so little in the past, and there are educational things going on here that I care about. Most of it has been fine – I’ve run some Scratch workshops, helped a teacher get her programming club going, and I serve on the district technology committee, which I actually enjoy. But I volunteered for a group that is advocating for music in our district, and told them I could maintain their email and FB stuff and keep information flowing. That is fine – I do that sort of thing all the time. But now it has morphed into constant calls to sit and sell crap at evening concerts, and constant calls for evening meetings, which drag on and on and on. I don’t have time for this, and I hate selling stuff. I have to get out of this.

  113. Rhett, i think your take home gross numbers are a little too high even with two kids.
    The combined income of my brother and SIL is close to the NYC example you gave in your example. They live outside of the city with a couple of kids. They live in a home that they purchased for low 400s – certainly below the median for their burb. They have enough for mortgage, taxes, food and car payments, and commutes. A metro north train ticket is $249 a month. If you have to hop on the subway that is another $2.75 each way. If you have to park at the train station – that is another $700 per year. I just think that necessary stuff adds up quickly, and then they don’t seem to have a lot of money for extras. I wouldn’t define some of their extras as extravagant. I am talking about an extra $1800 a year for two kids to go to Hebrew school. I think they get a scholarship because they can’t afford temple dues plus hebrew school. They send their kids to town camps, but that is still 700-1000 per kid per summer. Throw in school supplies, new clothes and shoes for growing kids, winter stuff, etc etc and they always seem to be right on budget and unable to save for extras or emergencies.

  114. Finn – oh, I thought Rhett was listing monthly costs for Totebaggers and listing a $6700 mortgage as one such cost.

  115. “That’s the “conservative” number @ $270k. My mortgage guy said he’s seen it go as high as 44%. @ 270k/yr that’s $9,900/month.”

    Well … wow.

  116. Anon,

    Just tell them no. If you come in casually dressed and they say something ask them what exactly they plan to do about it. If they don’t want you back you’ll never come back.

    I think someone in power is a control freak and they need a few people to quit before the powers that be rein her in.

  117. @Houston — Forgot to mention: we don’t have tennis at our place, just golf and a pool. But I think it’s all marketing. Our club tends to appeal to people who like to think of themselves as “regular folk who like to golf” — the members are largely local small business owners, nurses, real estate agents, etc. — definitely UMC, but not high-end, and many are 2nd or 3rd-generation members (there’s a reason people call it “Smalltimore”). OTOH, the places around here that go after the social elite or power players definitely call themselves “country clubs” and offer much higher-end services (and charge an order of magnitude more for initiation, too — presumably as a way of screening out those who aren’t quite up to snuff).

  118. Lauren,

    Your BIL example just doesn’t add up. Even if their take home was $12k a 400k house is 2k plus say in NJ 800/month in property taxes. That’s 9200/month even with the metro pass etc. you still don’t get to them needing a scholarship to Hebrew school.

  119. Thanks LFB. We probably have something similar here, but since I don’t play golf, I don’t know about our local golf clubs.

  120. “But I haven’t announced my pregnancy to them yet so I have no “excuse” for looking less than put together.”

    Seriously. If they are making you so defensive and self-doubting that you worry you don’t have an adequate, public “excuse” for not looking awesome WHILE PROVIDING FREE SERVICES FOR THEIR BENEFIT, you need to quit, now.

    Think of it as your last public service for the organization: they have no incentive to change if everyone just keeps on taking it. And I guarantee you are not the only one chafing at the attitude/”requirements.”

  121. And if you quit now while you still retain some good feelings toward the organization, you leave the door open to return after they get their act together (though with a baby on the way, you’re likely to have other priorities by then). Whereas if you keep trying to deal with their ridiculous demands you’ll probably end up with a spectacular blowout of an exit.

  122. Houston, I’m sure you already know this, but you can deduct your sales tax on your federal taxes, since Texas has no state income tax. I calculate mine every year because the IRS calculated amount is for someone who spends far less than my family. (So I have also done the total taxes paid calculation each year, and it is painful to see.)

  123. MBT: How do you calculate your sales tax? Do you save all of your receipts?

  124. The places I volunteer regularly kiss my ass and do the “we’re not worthy” thing. They’re lucky that I wear clothes at all. If I had to dress up and put up with guilt trips, they’d be waving bye-bye to me in a New York minute.

  125. Anon, your pregnancy presents an opportunity to leave gracefully. When you are ready to go public, you can also step down from your volunteer post.

  126. Houston – I download the year’s activity on my main checking account and on my credit card into Excel, flag all the transactions that involve sales tax (the tedious part, but I sort by merchant which makes it faster) then back into what the sales tax would have been given the total. It shaves about $2K off my total tax bill.

  127. Lauren,

    Since my flight’s been delayed, I’ve run some numbers. With 2 kids and no mortgage the NYC take home on $270k is $13,906/month.

  128. “once you take into account the list from the WP article (childcare, housing, transportation, student loans, yikes) it begins to feel like one can never get very far ahead.”

    Age also comes into play in determining middle class-ness as well. E.g., is someone making the same income at 24 as a middle-income 55yo also considered MC? How about someone who’s accumulated as much in assets before 30 as a typical 60yo? If we go strictly by HHI, as many do, isn’t it normal for people to start at one level and move up as they advance in their careers and increase their HHI, not to mention assets?

    One way in which many totebaggers got ahead of the curve was not having kids early, which allowed for accumulation of assets, buying a house, and career advancement.

    To Rhett’s point, people who plan to retire when their last kid graduates from college may have enough retirement savings that some cash flow can be diverted from 401k accumulation to tuition.

  129. Moxie and Ada, I’m in the sisterhood as well. And I think Lemon from a previous discussion? I love my Chi flat iron when I need to get my hair straight. But all bets are off as soon as a raindrop hits my head and it just turns into a giant party wavy/part curly/part straight triangle.

  130. Rio and Ada – the hair really is a burden! But when all the elements are right, it is spectacular! I can’t use a flat iron because I bleach my hair so that much heat would just fry it up!

    Mooshi – I’m so sorry about your pickle. No good deed goes unpunished. It seems that those school groups will seek to take the marrow from your bones if you let them. I finally bowed out and just said “No” No explanation. Nothing just “Sorry, No, I can’t do that” No shame in doing other things. I hate selling crap too! How about maybe some of the kids do that for their volunteer hours?

  131. Rhett:

    $13,906 after tax
    -$2,400 mortgage
    – $1,000 property tax & insurance
    – $500 train tickets for 2
    – $150 monthly metro card for 2
    -$50 parking
    -$300 car payment (assume one car paid for)
    -$400 car insurance
    -$400 disability insurance for 2
    -$500 life insurance for 2
    – $60 gas
    – $800 groceries
    – $400 lunch in city for 2
    – $200 clothing for 4 people
    -$40 dry cleaning
    – $200 house maintenance
    -$100 car maintenance

    That leaves $6k, but there is no health insurance ($3k/mo for us), child care, retirement savings or college savings in that budget.

  132. I just realized he would want Lauren’s relatives to ski or snowshoe, using secondhand stuff off craigslist.

  133. “Ada, what does MMM do when there is snow on the ground for 4 months straight?”

    I’ll field MMM questions. He stays home. Or drives his 12-year-old Scion sparingly. Or walks. (There’s a post I’m thinking of, but it looks like the site is down for maintenance.)

  134. And a 2400 mortgage would increase their take home by $800/month a 4.5%. Each 401k dollar decrease their tax burden by $0.40.

    You can’t make it work. They make 170 not 270.

  135. Rhett, at $50/month per $500k coverage (smart money claims that’s average for a 45 year old male), that would get them each a $2.5m policy. You think that’s too high?

  136. The same thing cars do: drive carefully!

    Of course I am being flip and the solution to saving 5k a month for college is not buying bikes, but people really do bike in snowy weather. Back in the old country (one of those Scandinavian places) people bike in snow all winter long.

    If someone is working a job in the big city that requires them to commute from the suburbs and make a totebag income, does it not usually have subsidized health insurance, disability insurance?

  137. Sky,

    You don’t buy 20 year level term at 45 you do it at 25 when 30 year level term is $20.90 per $500k.

  138. I have no idea about Lauren’s family, but the 401(k) match and the subsidies for health, life, and disability insurance were axed by my former employer during the 2008 downturn.

  139. Long day with parent and pet health issues, and a slightly contensious volunteer meeting, just now getting caught up on the discussion.

    Tulip – Warning! Child care costs shift to child activity costs – sports, band, music, other hobby or car insurance. We found that what we paid out in infant care every month has morphed into other child expense categories. But, may be after college it will come back to be expended somewhere else?

    Anon – Let them know you are pregnant (as soon as you are comfortable sharing) and use that as a reason to cut back or take a break from your organization. A reduction of time or a break might allow you some space to figure out the best way for you to continue to support them and keep your sanity during pregnancy and with baby anon.

    This weekend we had a high ER vet bill and cat may not be out of the woods yet. It is more than we normally spend in a month of discretionary income, so some things will have to be cut back to avoid dipping in the emergency funds. But, putting off some wants vs needs and we should be back on our spending target if not next month, by end of July due to some follow up visits yet to come – assuming the cat can get over this initial hump.

    My parents income was never above middle class until after I was out of HS. However, they were huge believers in saving and living below your means. When their income shot up, they kept expenses the same and save the difference. Unless one of them develops something that requires around the clock skilled nursing, they will not out live their money.

  140. I had to leave for a while to go to a meeting. volunteer! At night!
    Mooshi, I get it because the meetings have started to shift to the evenings to accommodate work schedules, but it is a lot of time for some of these committees.

    I think (guess) that their gross income is between 200 and 230k. Their property taxes are $12 a year. They used to have one car, but one person now commutes to city and the other commutes by car.

    Thanks to Sky because these figures are accurate. It paints a more realistic expense pattern and it explains why people don’t have as much free cash at the end of each month.
    I am not saying they are struggling, but there isn’t a lot of extras even at their income level.

  141. Lauren,

    Those aren’t accurate numbers – for starters she didn’t even deduct the mortgage interest and had them buying life insurance at 45. The most likely explaination is they make 170k. Which you find incredible as $170k is (in your world) a $hitty bonus, not an amount an entire family should be expected to live on.

  142. ” Child care costs shift to child activity costs – sports, band, music, other hobby or car insurance.”

    Or, in some cases, private school tuition.

  143. Tax deduction? Ha. We pay so much to CA that we get AMT’d and basically don’t see the mortgage interest deduction you’d expect. Again, not suffering, but we don’t exactly get that money back. Given NY taxes I’m guessing they are in the same position.

    AustinMom– I have this conversation with my DH all the time. I have always said I suspect the daycare money will get diverted to other activities (perhaps with a few lower cost years before the kid activities really ramp up) and he sees extra money coming in. I’ll register your vote that I’m right. ;)

  144. I’m still trying to recoup the capital costs on our camper. We’re doing a weekend in Williamsburg in June–Busch Gardens and Totebaggy Colonial Williamsburg–and since my youngest has suddenly become an easy 3 yo rather than a toddler, and since DW has decided that, with our new 4″ memory foam mattress topper, camper sleeping is acceptable to her, we decided we could stay at the KOA there.

    It’s $75 per night. Cheaper than any hotel that DW would set foot in, but not free, either. The deluxe cabins (the only ones they’ll rent to a family of five) are $200 per night, so I’m recouping $250 of capital expenditure.

  145. Rhett, I don’t think $170 is a small amount of money. I think it’s possible, more than possible to raise a family with that type of income.

    I’m just trying to say that there are lots of little expenses that add up to a lot of money, and suddenly there’s not a lot of money left for savings or emergencies.

  146. Rhett, I also forgot
    $250 utilities,
    $100 cable,
    $50 cell phone,
    $50 burglar alarm,
    $30 exterminator for termites,
    $150/mo heating bill
    $20 sewer and water….

    Another $650.

    Let’s say you are right and they are only spending $200/mo on life insurance for 2 and $200 on disability.

    They are now at $6,750 spent, if my mental math is right.

    Let’s also say that each saves $1k/month for retirement, pre-tax, so $1,200 in after tax dollars. $500 for each kid in the 529, also pre-tax, so $600 in after tax dollars. $1,800 more.

    Child care – after school program, $10/hour/kid, 15 hours/week, $1,200.

    Now at $9,750.

    At $230k for a family of 4 in NY, the Feds would take about $40k after AMT, and the state of NY gets 6.62%, so about $12k after deductions. Down to $178k. If half the income comes from NYC, NYC takes another $3.5k. $174.5k. FICA took $14.5k. $160k.

    Now, that $160k divided by 12 is $13,333. So that *should* stretch to cover the $9,750 they spent with plenty left over for Hebrew school and the $8k/year synagogue.

    However, that still assumes no medical bills (including any share of the premium), no vet bills, no car repairs, no new water heater, roof, etc.

    There is no vacation, no gifts, no birthday parties, no lessons, no clubs, no hobbies, no dining out in the budget.

    If they are paying for the health insurance without a subsidy (small employer or self-employed), then they are going to need financial aid for Hebrew school.

  147. Tulip – Finn is also correct – private school tution is another place that money goes in our household.

    My experience for your DH: When you look at your day care’s cost schedule, it decreases as the child’s age increases, but then each year or so the whole schedule increases, which decreases your “savings” from your child growing up. My area of Texas has half day kindergarten, so it isn’t until first grade that most public school families realize the direct child care cost falling from full day to a reduced after school care cost. But, then costs that were incorporated in your monthly costs at day care such as lunch/snack and supplies (crayons, scissors, etc) become items you supply from home. While few day cares have fundraisers, almost every school has at least one a year, not to mention the requests to send in something for a class party or the 100 items to be collected for the 100 days of school, etc.

    The sneaky part in your budget is that a big monthly check to the day care was easily identified and labeled, but many of the costs to the school are small enough that they fall under the radar and aren’t easily captured to get a comparable cost. My MS child for example in the past two weeks – $4 for the dance, $8 for the poster, paint and markers for a project and for campaign posters for a club, $5 for the class party, and $10 for the athletic banquet. Plus, homeroom parent request for a contribution for a home room teacher class gift and for another teacher’s going away gift. No individual item is greater than $10, but it quickly adds up.

  148. Sky,

    6.65% is the margins rate to NY State not the amount actually paid. I see a lot of these tax tales of woe predicated on the silly assumption that marginal = rate paid. Your SS number also assume both earn more than 117k. If wife makes 70 and husband makes 200k the their SS contribution drops by a few grand.

  149. $50 burglar alarm,

    With crime rates at a record low?

    $150/mo heating bill

    All year?

  150. Sky – you could also add student loan payments in a typical budget. But maybe not because it sees like a lot of Totebaggers don’t have student loans.

    Reading your hypothetical budget makes me appreciate the additional benefits I receive that I don’t think about like disability insurance. It made me wonder though if I should be buying more disability insurance? Do others pay for supplemental disability on top of coverage from their employers?

    Also, the life insurance policy of $2.5M seems really high to me for one person. Is that total or for each person?

    I love topics like this because I don’t talk much about income/budgeting with friends. DH and I grew up lower/middle class. I feel middle class in some ways and upper middle class in others, although we’re in the top 5% for income. We’re still in the first house we bought and have no plans to ever move. I’m going through a bit of house envy with friends who are moving up to bigger houses. If I were to put all the money we spend on education (paying off student loans and private school) plus our mortgage, we could buy a very nice bigger house. I’d probably still end up with house envy though.

  151. Finn, if you take regular ski trips definitely invest in the boots next time you are on one. Skiing is a completely different experience with well-fitted boots, especially with custom foot beds.

    Milo, buying vs renting skis is definitely one of those things that depends on how often you go. If you’re going on one or two trips a year, it’s probably not worth it. If you’re going almost every weekend, it makes much more sense. We ski about 12-15 days each year and I’d go nuts renting skis every time, especially with the kids.

  152. $50 burglar alarm,

    All in favor of an alarm, but you can get monitoring for half that price.

  153. “Skiing is a completely different experience with well-fitted boots”

    Yeah, I really miss my Thermofit Langes.

  154. Rhett – I am (ahem) personally acquainted with a high COLA young family of five whose single earner regular wage income is somewhere between 175K and 200K, minimal investment income. The monthly mortgage and taxes are 4000. No cable, just internet and 2 smartphones. One low car lease, the other paid for. The rest of the expenditures are ordinary and customary, although house and lot size mean utilities cleaning and maintenance are not inconsiderable. Retirement savings continue, but nothing for college right now. Vacations are at a family home driving distance away. And as far as I can tell, and I don’t have full direct knowledge, this lifestyle requires yearly moderate intergenerational transfers.

  155. Meme & Sky,

    You’ll get no argument from me that you can very easily learn to spend what’s in your pocket. What I object to is people making numerous luxury consumption choices and claiming they are just getting by.

  156. Sky, I could not live like the (I assume hypothetical) family whose budget you outline. Not having a cushion to cover unexpected expenses, or to be able to take advantage of unexpected opportunities, would be stressful.

    I prefer to sweat the small stuff in order to build that cushion and reduce that source of stress. The benefits of many of the things on which your hypothetical family spends would not outweigh the comfort a financial cushion would buy me.

  157. In this case, the small stuff adds up to big stuff. Groceries, lunches, phone, transportation, etc, adds up to thousands in this case.

    Sweating the small stuff in this case could free up enough to build a cushion, And once there’s a cushion, funds can be diverted to a 401k, which would reduce taxes, thus freeing up even more to be saved, as well as generate some unearned income.

  158. When I look at Sky’s budget, I see ~$5000/month in after-tax costs to live in that area, so ~$10,000 in gross income at a 50% marginal rate. I thought home maintenance ($200/month?) on her budget was low, at least viewed over a period of several years- a typical assumption is 1% of the value of the home annually, though maybe that’s based on lower home prices.

    Last week, I talked about the families I know with lower incomes. Their houses are similar to the Framingham one Rhett posted and they’ve put in lots of effort to make them nice inside- refinishing floors and cabinets themselves, landscaping, replacing missing shingles/broken fixtures, fixing plumbing, etc. Their mortgage payments if they bought now would be ~$600/month and insurance and property taxes cost another ~$300/month. They get by with one or maybe two older vehicles, depending on Dad’s current job.

    I can understand choosing to spend ~$4000 extra after-tax to live near your extended family, have a job you like, have socially similar neighbors, etc. but I wonder how many people make that choice consciously. There is also the benefit of more home equity and appreciation, due to the ongoing demand for housing in those areas.

  159. As a young family the commute and daycare costs before we moved really squeezed us. What we were looking for was a big enough house (approx. $500k) in a “good school district”. We would have to increase our budget to $800k to get the house we wanted. This is a house we would have looked at – 4 bedrooms, 2.5 baths, 2,828 sq. feet. in a good school district. The property tax on this house is $11k/yr.


  160. “I just can’t understand your disregard for the big stuff.”

    This. Particularly private school. Not that I’m criticizing, but just on the “oh yay, we’re all different” sense, I could never justify that on less than a seven-figure income if I had access to a public school that was good enough for HM’s family.

    Interesting hypothetical budgeting discussion. Unless I missed it, nobody is talking about saving for a significant down payment. In the 1950s my Mom’s family lived in a duplex owned by some of the extended family for the entire decade while her parents saved enough of a down payment to buy what we have all here shared and acknowledged was the true middle-class Cape. On my Dad’s side, his uncle and aunt lived in their basement for years before they could afford their little Wonder Years rambler.

    In these high-COL areas you’re talking about, the buyers who are not doing this and seem to be “people like us,” with good jobs, but not spectacular, are probably getting at least $100k “help” for the down payment (or some other form of assistance) so the grandkids can be in a decent school district (pick your middle-class rationalization.) This is the only thing, on average, that allows real estate in certain areas to get so pricey, I’m firmly convinced without any hard evidence.

    So you either need to save up a huge down payment, like we did, or you need to find wealthier and more-benevolent parents if you want to comfortably live even a middle-class life in some of these areas. And this sort of trend, for reasons I’ve said before, is only going to get more pronounced, and it’s going to further discourage people from WCE’s background from even considering such areas.

  161. Sweating the small stuff in this case could free up enough to build a cushion,

    So could living in a more modest home. In terms of unforeseen circumstances, it’s easier to cut back on the $140 quesadillas vs. the $6750 mortgage payment.

  162. “What I object to is people making numerous luxury consumption choices and claiming they are just getting by.”

    Almost every person I know who complains, although I’m sure my idea of “luxury” differs from theirs. The most common complaint I can think of is the lament about how much they pay for health care while taking very nice vacations.

  163. CofC,

    It reminds me of something SoFlMom overheard from a colleague or neighbor. They were unable to understand how anyone could live in SoFl on less than $400k a year. I think it’s just human nature that people begin to view their consumption choices as the baseline.

  164. I’d probably still end up with house envy though. @Tc – you are very wise. There will always be someone with more than you!

    I believe in sweating the small stuff. My parents’ attention to the small stuff allowed them to send both of us to private colleges with minimal loans and grants. It was a choice they made every day. We never stayed in hotels – always camped, always took driving vacations, used things until they were used up, made thoughtful purchases. I still do so very much of that habitually (hairdryer excluded) DH never quite gets it, but I take great pride in living below our means and I take great comfort in knowing if something goes awry we are in a good position to weather it!

    Austin, so sorry about your kitty, hope she/he is ok soon!

  165. Moxie,

    Presumably they sweated the big stuff as well? The issue I’m curious about is people choosing to sweat the small stuff so they can wildly overspend on the big stuff.

  166. Austin: Hope your cat gets better.

    Regarding child care expenses, once our children were out of pre-k, we shifted the savings to summer camps, family vacations, and some savings. However, these are consumption choices–we could have chosen to save more of the money, instead. We simply chose not to. That’s ok, family vacations are one of the things we’re willing to spend a lot of money on.

  167. I agree with Rhett on this because I found myself doing the same thing. Obsessively sweating the small stuff while ignoring the fact that that we had kept an inherited vacation home “for the kids’ memories”. Once we sold the getaway, it was like we’d gotten a 6% raise.
    In Finn’s defense, he has said many times that he considers private school to be worth the expense for what he sees as a better peer group.

  168. We never stayed in hotels – always camped.

    We never stayed in nice hotels, but my parents would never have gone for camping. And we never stayed directly on a beach or anything like that, but I’m pretty sure to do so would have been much, much more expensive back then. VRBO and its competitors have made vacationing much, much cheaper. I picked “Kill Devil Hills” (Outer Banks), and this is the first that came up. It’s not on the beach, but it’s a close enough walk. And you get three bedrooms for $1400 for the week throughout the summer. Note that this is the same price as camping in the cabin at a KOA.


  169. Milo,

    Per your downpayment question. If you’re earning the totebag median and want to buy a $1 million home with PITI of 6750 then assuming you’re living in a $2000/month apartment you’ll be able to save up 20% (200k) in 3.5 years.

  170. “In these high-COL areas you’re talking about, the buyers who are not doing this and seem to be “people like us,” with good jobs, but not spectacular, are probably getting at least $100k “help” for the down payment”

    Or they took out piggyback loans, or 100% LTV loans, or interest-only loans, or [insert financial product du jour here]. Or they started in a condo or smaller home, took advantage of the hot local market to sell it for a big profit when they had kids, and used that to put 5% down. And don’t overlook the value of time: we went from 5% down in 1996 to 20% down in 2004 (on a house that cost twice as much) — and very little of that was appreciation (about $10K on each). It was just from having prepaid the mortgages for all those years (plus a big help was that our closing costs/realtor fees were covered by DH’s job, so we didn’t lose the equity we’d built to fees).

  171. You know, the house discussion got me thinking about how this all plays into the feeling of economic insecurity. Per Milo, I agree that neighborhood housing prices are driven largely by schools, but I also think the macroeconomic cards are stacked against the younger crowd. When you’re young, your lifestyle is entirely funded by your job, because you have no savings to fall back on. So you go where the jobs are. And so does everyone else, because they need jobs, too. And so housing prices go up, until the jobs move somewhere else. So unless you were one of the early people in, you bought into a rising market, and sell into a falling one. And then you take your “profits” (such as they are) and go to the next town with jobs, which is now of course a rising market there. Rinse, repeat.

    This is, at least, what happened to us. We left DC right when the area was just starting to recover from its decades-long real estate slump (made $10K on our townhouse in 2 years and were *ecstatic*). Bought in CO right around $400K. Watched house value soar to $475K+. Then watched tech crash hit, which forced us to move and sell, at which point we chased the market back down to a few grand over where we’d bought. Moved back to DC area, which was in the midst of giant frothiness, lucked into our place because we had a good real estate agent but still paid more than it’s probably worth. Luckily, the jobs have (finally) been stable (knock on wood) — if we’d had to move again in the past 5 years, we’d have lost six figures on the house.

    The thing is, if you can find another job locally, you’re fine — house value doesn’t matter, as long as you can swing the carrying costs easily. But if you have to move for that next job, it forces you to realize your losses. Best case, you put 20% down, and you walk away with almost nothing; worst-case, you either have to come up with big $$, or you do a short sale or walk away (both of which were basically unheard of my whole life until the past few years). But in either event, you are now back at square 1, with no downpayment, no equity to roll over into another house, etc. So the end result is that an economy that requires you to be mobile to find jobs also does a pretty good job of keeping younger MC people from being able to build the equity that history suggests will be their greatest source of wealth at retirement.

    So it’s not just the jobs. It’s the “having jobs in one place so you don’t have to start over again every few years.” Which may partly explain why the mega-metropolises like NY and SF and DC and others have been in such demand for the past decade or so: people feel confident settling down, because they’re big enough to offer multiple job options if the first one goes away. It’s a virtuous cycle.

  172. Rhett – The modest house you posted (likely one of the nicest on its block) is 1/4 mi from DH’s former condo – that is a low priced area. It looks much like the self improved home this family previously owned outright in another part of the country. And they certainly sweat the small stuff, and always have, and made a neighborhood choice that makes private school unnecessary, and no one said they don’t have savings of their own – normal practice is to pay cash for cars, etc. And I am 100% of the opinion that a family should buy less house than it can nominally afford – that is the single greatest risk of busting the budget, and when the unexpected occurs the monthly nut puts tons of pressure on the system. The point of the anecdote was that it is not all that hard for a family with 175K income to find itself at a point where a 2000 deemed essential expenditure per kid per year can’t be funded, at least currently, by normal cash flow. It is often borne by the grandparents in a fashion hidden from public view, and if there is no family help it is not unreasonable to seek other funding.

  173. I agree with LfB on the home loans. When the mortgage crisis hit a lot of “people like us” were in variable rate loans where the interest rates had reset to a higher rate. They had stretched to afford their homes so in many cases a job loss spelled instant disaster. The unemployment benefits gave some relief but there was no emergency funds of any kind to fall back on. Yet in talking to a lot of people they found it very hard to make any sort of “sacrifice/cuts” and life continued while mortgage, car, credit cards, student loans still had to be paid.

  174. Our first home was a HUD home in a “starter” section of a nice neighborhood we aspired to. It was about 1500 sq feet, relatively new, and had a huge lot (big enough that we bought a super-fun riding mower). It required us to put $500 down, and was actually done kind of on a whim. We had been aggressively paying off student loans, so had very little savings. We got the house with our offer, and my parents gifted us new kitchen appliances and a lawn mower. We got an ARM, because at 7% it made the house affordable and we thought we’d be in a better position in five years when it re-priced. My public accounting colleagues thought we were crazy taking a gamble like that, and some of them had fixed rates ranging from 9% to 11%. But rates dropped every year, and we got transferred after a few years anyway.

    I don’t think that’s a viable plan for my kids, so have encouraged them both to consider living with us to save up money after they graduate. I think it’s really important to start out life with a little cushion for the bumps rather than completely overextended.

  175. LfB – I’m constantly amazed at how you try so hard to figure out the pessimistic view for every financial scenario. For every house that’s sold at a loss, there’s a buyer on the other end getting a good deal. And vice versa. We made a $95k profit on that same small townhouse in two years and a couple months (hooray for meeting the tax exemption!). If you want to remain mobile, just rent and put the difference in an REIT–it will be somewhat of a hedge against getting priced out of a rapidly rising market, and the transaction costs will be much lower.

  176. Meme: Do you feel comfortable giving an update on your middle aged friend in Wellesley who was looking for a job? Did he find anything?

  177. “have encouraged them both to consider living with us to save up money after they graduate. I think it’s really important to start out life with a little cushion for the bumps rather than completely overextended.”

    I agree and hope my kids will do the same. Or at least get an apartment with multiple roommates, like I did, to cut expenses.

  178. I think it’s really important to start out life with a little cushion for the bumps rather than completely overextended.

    While true, my guess would be the number of “self financed” 28 year old newlywed home buyers who have a 9 month emergency fund after putting 20% down on their first home and paying all moving/closing costs, is essentially zero.

  179. According to Zillow, the average cost of a house in my area is ~$900k. Of our friends, no one had significant family help except one. Everyone else saved up for their down payments. It isn’t that difficult when you are (1) older when you buy your first house (almost everyone was in their 30s), (2) are DINKs and (3) both people have professional jobs. There are many couples who make $300k-$360k around here, at least for a number of years before the kids arrive and the woman either downshifts or finds something more family-friendly.

  180. “Of our friends, no one had significant family help except one.”

    People lie.

  181. Rhett, you are correct. They sweated EVERYTHING. Never used credit for anything we couldn’t actually afford. The Sears card would be withdrawn from the wallet with the same gravitas used for the wafers at communion. This is what happens when your dad was raised on a farm in the great depression!

    Milo – love that house. You should make an offer anyway! I would have sold my soul to stay in a Holiday Inn! HBO!!!??? I think I may have stayed in every KOA in the continental US. Now, I don’t need a fancy hotel, but I’m over camping. I have done my time. Cabin yes, tent NO!

    I think we would let our young adults live with us rent free as long as they showed us they were saving. So many kids live with mom and dad and spend all the money they should be saving!

  182. I recall conversations from when we were all starting out. One colleague paid off his student loans and was aggressively saving for a house. His fiancé wanted to stay home at some point after they married so he was more aggressive than the rest of us in making sure they were both saving enough to buy a house and have his wife stay home when the kids came. There were a few people who knew the lifestyle they wanted and planned very well accordingly. The rest of us muddled through somehow.

  183. Milo,

    People do lie. That said, I think you tend to underestimate how much people make.

  184. I don’t think they are lying. Our one friend (who did have help) is pretty open about it. Everyone else is just jealous. And that friend has a much higher standard of living than jobs would allow. Not so for the others who seem to be footing their own bills. For instance, most do public schools. Friend’s parents pay for kids to attend private.

  185. “Too bad it’s not for sale.”

    uhhh…for the right price I’ll bet it is!

  186. “People do lie. That said, I think you tend to underestimate how much people make.”

    Sometimes, and I well understand that Cat’s example of making $350k for a few years before kids is certainly feasible. But I also think that there are a lot of people who “grew up very middle class–we went camping!–parents are comfortable now, but CERTAINLY not rich…” but they also don’t think of the $100k help with the down payment as “significant help.”

  187. I think we would let our young adults live with us rent free as long as they showed us they were saving.

    I’d be leery of setting up that expectation. To me, getting the right first job is even more important than getting into the right college. So, I’d be worried about them limiting their job search to a commutable distance from home.

  188. In Finn’s defense, he has said many times that he considers private school to be worth the expense for what he sees as a better peer group.

    I’m always fascinated at how we all see things differently. I see the peer group of a private school as being a negative, because most of them would come from families at a fairly higher income level than us. So I’d be concerned that my kids would feel left out that they wouldn’t have the material goods and do the experiences that the other kids were able to. I much prefer that they are with kids who are at a similar income level.

  189. “uhhh…for the right price I’ll bet it is!”

    For the right price, I’d want a third bedroom. For a good price, I’ll buy it and open up the camper when guests come. :)

  190. “Of our friends, no one had significant family help except one.”

    Before reading this site, I never knew that parents helping their kids with down payments, private school tuition, etc., was a thing. It never entered my mind that this was possible. Sure, I expect parents to help out if you lose your job or need help paying emergency medical bills, but to support normal life events? Wow.

  191. I don’t know anyone who wouldn’t think $100k was significant help. Particularly when the down payment is $180-200k. I think you also have to remember that people self-select. Low/middle income earners don’t typically look in my area. None of our friends here are teachers, nurses, pharmacists or the like. They are all lawyers, finance people, doctors or consultants (like the Booz Allen type, not the type who can’t find work and calls himself a consultant).

  192. We self-financed our condo purchase (I was 24 at that point) and our subsequent home purchase (with 100K appreciation from the condo), and so did our friends, but we and they had at least one biglaw or finance salary that enabled the purchases.

  193. Houston,

    I’m surprised with your first job in NYC you didn’t have fellow newbies living better than could be explained by their income.

  194. @Houston – I don’t think home buying help from parents is that uncommon. Even in the home country parents try to help their kids buy their first apartment. One of my friends there has already purchased an apartment for one of his kids (which he is renting out currently) and is on his way to purchasing another apartment for his second kid. This is in addition to the apartment the family currently lives in. At some point they will have three fully paid for apartments.

  195. Loved the conversation.

    I, for one, have always been of the type to sweat the small stuff. And then reward myself for being successful at it. When I first started working it was easy to ‘just go grab lunch’. I was living with my folks so no rent, plenty of spare cash even at $11k/yr. But those $5-7 lunches added up. So I limited myself to 1x/wk, and brought the other days, or tried to anyway. Every day when I came home having “saved” $5, I put that in an envelope. When I got to $50, I put it in my savings account (pre-internet days, folks. I had to actually make that deposit at the bank). The money grew faster than I imagined and once I got on the bandwagon, my motivation kept growing. Somehow this outlook has served me pretty well, especially wrt retirement and house downpayment savings. (for the record, we got help from my in-laws with part of the downpayment on our first house).

  196. My parents gave my ex wife and I $20k for a down payment on a condo. if that doubles every 10 years, it will be worth $320k to my heirs when I die.

  197. “I’m surprised with your first job in NYC you didn’t have fellow newbies living better than could be explained by their income.”

    I’m sure some did, but it wasn’t noticeable to me. We all worked all the time and I wasn’t very socially clued in. The people who I hung out with were fairly modest.

  198. Actually, DD, where I live the private schools are actually much more diverse than the “good” public schools. My D had more minorities–ethnic, racial and economic diversity– in her grade of 40 than the nearby public school grade of 250 where everyone is the child of lawyers, doctors etc. And I mean more number-wise, not just percentage-wise.
    And for many of us, the faith-based aspect of private school is important.

  199. I echo what BenLaw said about the private our kids went to. If they had gone to the public school there would have been more Asian (primarily Chinese, Indian) kids/families, fewer Blacks/Hispanics, much more economic homogeneity than at the private. Being all-boys was a big + in our mind also. As was being exempt from the mandated state testing.

  200. Also, the friends who have very wealthy parents who help a lot don’t live in the good suburbs and go in to DC to slog away at their lawyer or finance jobs. They live in Manhattan or San Francisco in cool apartments or houses and are art dealers or run nonprofits. There is no question that their parents 100% fund their lifestyles.

  201. @Rhett – the first I heard of SMU was as the alma mater of Laura Bush.
    What kind of college is it ? Like Pepperdine ? Have wondered.

  202. Rhett: I grew up in Dallas, so I experienced fully the situation of 12 year old kids having LV purses, getting BMWs for their 16th birthday, etc. I love the fact that my kids don’t feel poor when they go to school.

  203. This also comes back to what I think of as “private” schools. I always think of parochial/Catholic schools as a separate category. I think of private schools to be like the ones near us with tuitions of $15,000+ that cater to the upper class. I know that any school that isn’t public is a private school, but when someone talks about sending their kids to private school, I never think they mean the local Catholic school.

  204. Rhett – yeah, but the cost was minimal…3 kids in parochial elementary school. The pricing/volume discount scheme was available to all regardless of income. So, while not $0, certainly not an impediment for us to send them there.
    Also, btw, the kids private MS/HS (same school) while not cheap, and no volume discount, is a LOT lower cost here than what people pay in BOS, NYC, DC, SF and many other places.

  205. so I experienced fully the situation of 12 year old kids having LV purses, getting BMWs for their 16th birthday, etc.

    And the thought never occurred to you that the gravy train would continue on to include $250k Mansion at Turtle Creek weddings with houses as wedding gifts?

  206. Houston – DH went to Dallas a few weeks ago and said it was like Atlanta on steroids (as far as the way women dress, etc.)

    Now that I think about it, we had help buying our first house. When DH’s grandmother died, each grandkid got $10K or something around there. This was in the days of high interest rates on savings accounts so by the time he graduated from law school it was $20K or so. We used that to put 5% down on our first house which we bought in 2004 for $300K. We fixed it up and sold in 2011 for $330K, which while not a profit after commission, etc., we felt lucky to do. Since we had savings and had been paying our mortgage down for the seven years we had lived there, we could put 20% down on the next house, which was required at the time, and not a lot of people could do. This enabled us to get into our dream neighborhood at a great price.

    I’m not sure about the not able to save $ at $200K salary, but then again we live in Atlanta and I think the child care that we’ve chosen is less expensive than most and our oldest is in public school.

  207. Rhett – That Newton house, take away the dormers, add a lot more charm and curb appeal, add detached garage, add a family room (circa 1990), and that’s my grandparents’ house.

    I knew a Fire Control Technician Second Class who was from Lynn.

  208. Rhett. That is because real estate is very local the Newton house you posted is a teardown, or the Framingham house is in a depressed section of town.

  209. Rhett, for those of us unfamiliar with the Boston area, what’s the difference with those two houses? They both seem absurdly overpriced to me, but I realize that’s the market there.

  210. continuing, re yours at 911:
    our local equivalent of Boston College HS ($18k) charges $12.5k, which is about 1/2 of what the two better local privates charge.

  211. Regarding house envy – I’ve noticed that among friends the prekid discussions about travel has changed into what home renovations they are doing. In the past it was all about what great place you went to and trying to top your friends (Greece, Patagonia, Nepal, Bhutan, Tahiti, etc.), but then kids came into the picture. Now it all about the new kitchen, adding a complete second story, buying a teardown, I’ve seen plenty of my friends buy a new house and two years later tear out the kitchen and make it “better” because everyone else is getting a new kitchen. It is a vicious circle.

    I can comment a little bit on disability insurance – most employer paid policies have a taxable benefit. A typical 60% of monthly income will end up being less than 50% after taxes. And if you are high wage earner, and you might only get 20-30% of your income. Based on the monthly expenditures we’ve discussed upthread a family would be in serious trouble.

  212. “LfB – I’m constantly amazed at how you try so hard to figure out the pessimistic view for every financial scenario.”

    Hah. Yes, I am the Rocky of financial planning.

    But to be fair, I freaking lived this for ten years, and we got through relatively unscathed only because of two professional incomes + my natural inclination to oversave and underspend. So maybe it’s confirmation bias in action, or maybe it’s once burned, twice shy. But I’d still rather prepare for the worst and be pleasantly surprised than the other way around.

  213. “So, I’d be worried about them limiting their job search to a commutable distance from home.”
    Rhett – you are correct. Was more thinking if they happened to want to stay in this area.

    I would love to be able to help my kids. My parents did not. They were going to help me buy a condo in Alexandria in the 90s for $90 K but we did not ( kicking myself now!). A good Friday post would be real estate regrets! So many things I wish we had purchased!

  214. Denver – For the same price, the one in Lynn is twice the size, a lot fancier, and has ocean views.

  215. Denver,

    Lynn is a working class area with many ESL students so the public school ratings aren’t very high. But, the Lynn house is a charming Victorian on the water.

    This is a house on the water in a town with good schools:


    Newton has perhaps the best public schools in the US and homes are priced accordingly. But, you have people who pay top dollar for the Newton school and then go on to pay 44k per kid to send them to Newton Country Day – it makes no sense to me.

  216. On private school. We are sending our son to private after really giving the public a shot. We live in a place with what is supposed to be one of the best school districts in the country but we are not seeing it. I think they cater very well to the absolutely brilliant and the very troubled. A well behaved student who needs a little extra help and/or inspiration is NOT going to get it at our public school. I think if he stayed in public he would do “fine” but we want him to do his best! I can’t even get started on the testing and the number of days and hours we have spent on testing this year. It is infuriating. I will also mention that given how much we pay in taxes you would think there would be a number of extra curriculars offered but in the middle school they are paltry. We have a tennis court, but no team. No track – they do have a cross country team. Basketball for boys and girls and that’s it. At the private school there are a ton of options and kids are required to do a sport each year (that’s where their PE requirement is met) and an activity as well. It really promotes community.

  217. @Lemon — don’t most employers offer the post-tax option? I always get an extra entry on my EOY paystub that reflects the taxes on the disability payments — that way, my premiums are paid post-tax, making the insurance tax-free. I guess maybe I just assumed everyone did that.

    DH’s employer offers different levels of disability, like 40%-50%-60%; the first is free, the others you pay extra for. We have always opted for the most coverage.

    I think the biggest trick in disability insurance is “own” occupation vs “any” occupation. I need the insurance to kick in if I am disabled from doing my current job, even if I am still able to flip burgers at McDonald’s.

  218. “So, I’d be worried about them limiting their job search to a commutable distance from home.”
    Rhett – you are correct. Was more thinking if they happened to want to stay in this area.

    +1. I agree. That said, I wanted to get as far away from home as possible. My sister spent several years living at home after college, and this helped her weather a job with low pay and a bout of unemployment before she found a career that was right for her. My parents were happy to have her, and she was happy being there.

  219. Rhett I think if I lived up in Mass I would look at Cohasset. I love that Elm St. house (aside from the mural in that bedroom).

  220. Rhett / Milo, thanks for the clarification. I agree that I don’ t understand paying a premium for a house in a good school district and then sending the kids to private school.

  221. Rhett – at least it’s built ~1 foot above the ground… And buy it now, in about 50 years, the water will be under the house (but then you can start a whole new market in SE MA – house boats ALA Seattle!). That’s really only a summer home… can you imagine a good Noreaster through there? Good thing it’s pretty isolated… I don’t know how I’d deal with the giant glass door separating my porch from my shower (though I see the benefit after being on the beach, don’t get me wrong).

  222. I flew down to SMU when I was in high school for a scholarship interview. The parking lot was much the same in the mid-80’s. I worked in an expensive retail store, so recognized the suits girls were wearing walking around on campus as being clothes I could never afford. My mom and I ditched after the interview and went shopping. It was not the right place for me. One of my best friends went there, but left after two years because she felt like the only one living in the real world. Her boyfriend and many of her friends were just killing time until they got access to their trust funds at 21. She said they were constantly asking her why she worked, like it was some type of charity gig. She was one of seven kids and was paying for own education. SMU has very generous scholarships and can be a great value, especially if you want to work in this region. But the affluence is part of the environment. (And my experience is through kids in the Greek community. Maybe there are other pockets of students who are more middle class, and have their own social network, but in the mid 80’s I was not aware of it.)

  223. And I agree with Rhett on not limiting a child’s job search just for free rent. Houston has plenty of jobs, so I hadn’t really thought about that, but we would certainly be supportive if they want to go elsewhere, and would help with deposits, etc for first apartments if they were fresh out of college and in another location.

  224. Milo,

    Moneta looks to be about 200 miles from home or about a 4 hour drive – according to Google. That’s kind of a hike 4 hours there 4 hours back – that’s one full working day just commuting back and forth to your weekend home.

  225. “Milo – you’d also get a mainland home! That’s 3 houses!”

    yeah, somebody must have died. The thing is, that place was for sale last summer when we drove by on the boat. The price hasn’t moved.

  226. can you imagine a good Noreaster through there?

    Check out the google earth image – it looks like it’s shielded by Windmill Point.

  227. Rhett – that Newton one is def a teardown. I had a client recently who sold a ranch house in Brookline to a developer for $1.05M – immediate teardown and they built another place there and sold 8 months later for $2.3M.

  228. LofB – the norm is to have the taxable benefit plan designs. The design you mention involves an HR savvy enough to administer payroll correctly. You’d also be surprised how many people want to opt out having the premiums included in their pre-tax earnings.

  229. Is Univ of Richmond a rich kids school? I never knew that, but I feel like I am woefully uneducated about Virginia schools (other than UVA) even though I live here.

  230. @Lemon – so do you buy additional disability insurance? We purchase disability through work after-tax so that the insurance benefits would be tax free. I think we get 60% coverage.

  231. When I stopped working, my husband got an additional disability policy that we pay for with after tax money. When I was working, I didn’t feel like we needed it. But since we only have one income now, I like having the security of it.

  232. Jumping back in at the tail end…
    We saved for our house. We had no help from anyone. We lived for many years in rentals.

    My particular town has a big cultural split, and how houses are acquired are a big part of it. We have lots of traditional Italian-American families, who are really middle class in terms of their occupations. My neighbors are nurses, plumbers, auto mechanics (albeit with his own shop), even a pizzeria owner. How in tarnation do they own these nice houses in this high COL area? Because the houses are usually inherited. Most of these houses have been in the families since the 1920’s.

    We also have lots of true professional families – bankers, managers, etc. They tend to have a very different outlook on what our town and schools should be doing. They typically bought their houses recently, as elderly owners passed on. They have to have high incomes to afford the current prices.

    And we have many Japanese professional families. They are expats and will return to Japan one day. They rent nice houses in our neighborhood. There are companies that buy up houses in this town and then rent them to Japanese families. There is one of these houses on my block, and possibly another soon.

    So the way that houses are acquired here relate to the cultural split in an interesting way

  233. I always thought of SMU as a school for wealthy Texas girls. Am I wrong?

  234. TC – it all depends on your circumstances. Is the 60% a true 60% or is the monthly cap say $5k, but your income is 10k so 60% should actually be $6k? In that case, you are are only receiving 50%. Also, if you or your spouse are only receiving 60% of their income, can you still pay your mortgage, car payments, health insurance premiums, and generally maintain the lifestyle you currently have? If you can’t, then perhaps additionally insurance might be of interest. Cat’s security is also a great example. Not to mention if only one member is working and is out on disability, health insurance premiums for the family just got a lot more expensive.

  235. My neighbors are nurses, plumbers, auto mechanics (albeit with his own shop), even a pizzeria owner.

    I think you are underestimating how much an auto mechanic with his own shop or a pizzeria owner can make. I know one of each, the parents of friends, and it’s vacation home in the Virgin Islands, home in affluent Boston suburb, one wife has a diamond the size of a golfball, etc. A lot of these modest but well run businesses can mint money.

  236. “If you can’t, then perhaps additionally insurance might be of interest.” I thought the max disability insurance you could get was around 60%-70%? The theory being that it’s tax-free, so 60% is about the same as 100% of your pre-tax income. I didn’t think you could buy more than that, because they didn’t want you to be better off financially on disability than if you were working (incentives to cheat and all that).

  237. Rhett, the pizzeria is a rundow take out shop in Mt Vernon. I doubt it is bringing in that much. The guy with the auto shop was married to a nurse who worked in a methadone clinic. They did not have any vacation homes. I think they did go on a Carnival cruise one year. The thing is, these families are truly middle class in their cultural values, and make our town feel different from some of the neighboring towns

  238. ““self financed” 28 year old newlywed home buyers who have a 9 month emergency fund after putting 20% down on their first home and paying all moving/closing costs, is essentially zero.”

    I was pretty close to that profile when I bought my first home, except I was single. A lot of guys I worked with also profiled similarly, around 4 to 8 years out of college, although in those days most of us had little or no college debt to pay off.

  239. “he considers private school to be worth the expense for what he sees as a better peer group.”

    Peer group is a big part of it, but overall I consider the expense worthwhile because the kids are really enjoying their school experience. You’re only a kid once, and I consider it important to enjoy that.

    This group has also made me appreciate what we get for what we pay. There have been many discussions about school issues which have not been issues for us because our kids’ school had addressed them.

    “I see the peer group of a private school as being a negative, because most of them would come from families at a fairly higher income level than us.”

    In our case, I think we’re somewhere in the middle. There are a lot of families with similar financial means as ours, including the kids of many of DW’s group of close friends from HS. A lot of the employees send their kids there also, including the custodians, groundskeepers, and security guards.

  240. We send our daughter to private school. We started sending her there because we lived in the city when she started school and the public school options were abysmal, unless you got into a charter school through a lottery system.
    When we moved out of the city, we ended up with a great public school option in our town; but we kept her in the private.
    Here are some of the reasons:
    1. small class size (10 kids, including her, in her class);
    2. values of the school
    3. included activities: swimming every week, and rotates through 9 different sports throughout the school year (tennis, ice skating, ice hockey, soccer, baseball/softball, lacrosse, soccer, field hockey, basketball)—-this also frees up weekend and after school time, since all the sports are included/done during school and we can spend family time together rather than racing off to swim lessons on Saturday am
    4. curriculum (great science and technology program that starts in Kindergarten—-school has amazing telescope on site)
    5. much more diverse (both racially and socio-economically) since it draws enrollment from the city and surrounding communities (the town we live in is mostly caucasian and one of the wealthiest towns in our state—–the kids at the high school drive very expensive cars, take private jets to private ski mountains or privale islands over school break, I prefer the private in this regard. It certainly has wealthy families, but it also has families that are on full or partial scholarships and other families that the dad is a firefighter, the mom a nurse and they are scrimping to pay the tuition)
    6. great school community and very supportive

    So if we weren’t going to take advantage of the school system why did we buy in our community?
    Here are some reasons:
    1. We could easily afford it (and for that matter we can easily afford the tuition for DD’s private school—we are not making any sacrifices to send her there—-although one could argue we should be using those funds for a more socially valuable purpose (like funding a private education for a child who doesn’t have the option of a decent public school—but I am just not that altruistic.)
    2. Resale: this is a lovely community with great schools, so when/if we want to sell our house there is a ready market and the stats show it will be very unlikely that the house will lose value and much more likely that it will appreciate (a lot)
    3. Aesthetics of the house and the community
    4. Ease of commuting (15-20 minutes to our jobs).

    Milo: one of the reasons Newton is so expensive is because it is a “close in” suburb and very commutable to Boston and Cambridge. Many people who live in Newton do not have children, but choose to live there because it is easy to get into the city, or because they like the density of the living situation, or being able to walk to the town centers for the different neighborhoods, or the like minded people in the community, or for certain areas, the strong Jewish population. People choose a community for many reasons, not just schools.

  241. Sorry, Milo. I meant to address the poster who was asking why someone would buy a house in Newton, yet still send their kids to a private school. Maybe that was Rhett.

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