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How Middle-Class Are You?

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This is a guest post from Crystal of Budgeting in the Fun Stuff: A Personal Financial Blog about the Next Financial Step. It’s an open fiscal diary and a personal finance blog rolled into one that is looking to get as many people involved as possible.

This article at Yahoo Finance, How to Gauge Your Middle-Class Status, made my inner-financial competitor salivate. It’s chocked full of ways to compare yourself to others. I know that is a bad thing, but I want to spread the naughty.

According to the article, the typical two-parent, two-kid household:

  • Makes $51,000 to $123,000 with both parents working a total of 3747 hours per year.
  • Owns a home worth $231,000 that is about 2300 square feet.
  • Spends about $5100 a year on health insurance and non-covered expenses if their employer provides their insurance.
  • Spends $12,400 a year on two medium-sized sedans that were bought for $45,000.
  • Puts $4100 aside for college expenses for two kids (it seems to mean total…that’s a little low if you really want to help, right?)
  • Spends $3000 on an annual one-week vacation.
  • Doesn’t save at least 3.2% a year for retirement.
  • Spends about $14,200 a year on clothes, food, entertainment, and living expenses.
  • Has a typical head of household that has about 2 years of college under his/her belt.
  • Wants free time more than they want healthy kids, a strong marriage, or to be wealthy.
  • Has a net worth of about $84,000.
  • Spends about 18% a month towards debt.

Okay, so my husband and I seem to be doing very well comparably, but we don’t have two kids to contend with either. Here’s how we fall; we:

  • Make $78,000 with both of us working about 4000 hours total.
  • Own a home worth $130,000 that is about 1750 square feet.
  • Spend about $1500 a year on health insurance and non-covered expenses – my company provides insurance and hubby pays $75 a paycheck.
  • Spend $7000 a year (including his car payments) on two medium-sized sedans that were bought for $12,000 and $21,000.
  • Put $0 aside for college expenses (I know, unfair comparison, we suck)
  • Spend $1500 on an annual one-week vacation.
  • Save at least 15% a year for retirement.
  • Spend about $12,000 a year on clothes, food, entertainment, and living expenses.
  • Have two college graduates and one person in graduate school.
  • Want health and a strong marriage way more than free time or to be wealthy…although I want it all.
  • Have a net worth of about $125,000.
  • Spend about 19% a month towards debt (since we overpay our mortgage).

What do you think of the typical amounts?

Check out these other posts from Budgeting in the Fun Stuff:

The BFS Way To Diagnose Your Financial Health
Want a Raise? Got These Traits?
Determining Our “Allowances”

Why Being Passionate about Your Career Can Drive You Nuts

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A guest post by Simple Life in France

People often rail against giving up their dreams, working a 9-to-5  job they hate and having the life sucked out of them.  But what if you work atypical hours doing something you’re passionate about with an outlet for your creativity?  Are you safe from job-induced insanity?

Hardly.

I’m always amused when people solve the problem of work-induced stress by saying, “Just do what you love,” often followed by, “and you’ll never work a day in your life.”  Not so, I say—and here are just a few reasons:

• Often work you love is precarious. Want to be an art teacher, college professor, journalist . . ?  The scarcity of stable, full time employment in these fields can leave you scrambling from one temporary gig to another with spotty health care and benefits.

• The politics that arise in environments with low job security can be reminiscent of a snake-pit. I once had a long conversation with a friend who felt he’d sold out by becoming an attorney in some ways, but who enjoyed the cooperation between opposing attorneys during their cases.  I had to admit to this friend that the teachers in the school where I worked refused to share teaching ideas or collaborate because they were in direct competition with each other for their jobs.  Not quite what I’d envisioned when I took up my passion.

• When you believe in what you do, you tend to take it home with you—literally and figuratively. Journalists, writers, teachers, musicians, artists (etc.) tend to mull over projects constantly, not simply while they are at work.  You may find yourself putting in extra (unpaid) hours because you enjoy what you do and want to do your best.

• Your passion can become corrupted by the employer-employee relationship. When you believe in what you do, you’re likely to have strong opinions about how it should be done. You may have an idea about how you want a specific graphic design project to turn out, but your employer doesn’t agree. You may have a strong opinion on student/teacher ratio that doesn’t jibe with the state budget.  Your editor may request changes in your writing in the name of marketability.

When someone else pays you to do something you’re passionate about, you often find yourself trying to decide whether to compromise, to subvert or to leave.

Passionate about your career? Should you abandon all hope?

That sounds like a personal question to me.  I must admit that for all the drawbacks I found in working in a field I love, I’ve never quite been able to imagine myself doing something else.  Although on occasion, I gaze wistfully at friends who are bored with their work but can come home, put up their feet, drink a beer and forget all about it.

What do you think?  Where do you find the balance between work and passion?

Enjoy these other posts at Simple in France:

The Slippery Smell of Clean and its Costs
Nearing Nine Months in France
Village Idiots at our Table, Pallets Under our Bed

Hidden costs of illness or injury

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Welp, it looks like I’m not only going to live, I’m actually on the mend. Yesterday it was off to the orthopedist. From his PA I learned that the ER staff were incorrect in their thought that the dislocated shoulder was also fractured. The orthopod searched the half-dozen(-plus) X-rays and could find no sign of a break.

Better yet, the PA estimated a 95 percent probability that no serious soft tissue damage had occurred. He said they believed the shoulder will regain 100 percent of its function within a few weeks, possibly as soon as three weeks. He got rid of the hated arm sling, described a couple of easy therapeutic exercises, and said that I should use the arm to do any  normal daily activities that don’t hurt unduly or involve lifting heavy stuff.

Hallelujah!

Having one arm out of commission for a week was an enlightening experience. It gives you a good feel for how difficult things can be for folks with even a fairly minor disability. And for how much “even a minor disability” can cost.

I’m not talking about medical bills here. It’s that being unable to perform certain daily tasks can rack up costs that you don’t think about, especially when you live alone and there’s no one to help you.

Because Easter weekend was so busy, by Sunday night (when the Great Fall happened) I hadn’t done the laundry, changed the sheets, or cleaned the house. And because Holy Week itself was very busy, the prior weekend I hadn’t found time to wash the sheets, either, so by the time I hurt myself they were already dirty.

Though I’d managed to beat back most of the rain-generated weeds, if you miss a couple they’re soon as high as your belt buckle. Within a few days, exuberant milkweeds and thistles were reaching toward the stratosphere, front yard and back.

The pool has never settled down since the water was changed. The acid level refuses to return to normal. This means that every time I think of it (which isn’t often enough), I have to add another pint or two of acid. Adding acid entails dipping up a bucket of water, carefully pouring the acid into it, then holding the heavy bucket over the pool’s surface above an active inlet port and slowly pouring in the acidulated water. Because acid is heavier than water and drops to the bottom and because Harvey the Hayward Pool Cleaner invariably zips to the spot where I’ve dumped the acid, as soon as it’s in I have to dip and forcefully dump several more bucketsful of plain water into the pool to mix the stuff as best as possible. It’s not something you can do with one hand.

Neither is cooking. If you don’t eat junk food and you don’t favor convenience foods, the larder is full of things that require great heaving of pots and pans to prepare. To slice an onion, you need two hands. To slice a piece of meat: two hands. To cut up a tomato…etc.

M’hijito came by twice a day, on his way to and from work, to get me into the damnable sling after the morning shower and the afternoon mini-exercise routine. I could not get into it by myself. And he cooked a bunch of pasta and minced a store of garlic  so that I could fix something to eat, one-handed. La Maya opened cans of beans and tomatoes for me. But there really wasn’t much anyone could do about all the rest of the survival chores, because they both had to go to work and they both have their own responsibilities.

I figured that if it took more than a couple of weeks to recover some function in the arm, I was going to have to hire a cleaning lady ($80 to $100 a day), a pool guy ($25 to $50 a hit), and Gerardo to beat back the weeds ($75). And despite having a month’s worth of food in the house and nothing left in the budget for groceries, I was going to have to go back to the store and stock up on things that could be heated in the microwave or the oven. Expensive and, to my taste, not very appetizing; but sooner or later I would have to eat something other than reheated pasta. That would probably cost another hundred bucks.

Meanwhile, it was all I could do to drag myself to class. By the time I walked out of the afternoon class, I was so exhausted I had to sleep. Grade papers…are you kidding? One of my former RAs read last week’s raft of English 102 papers, to the tune of fifty bucks.

Yesh. For a week or so of impaired function, we’re looking at costs of $330 to $375, just to stay abreast of a part-time job, keep the house running and tolerably sanitary, and put manageable food on the table. How much this would amount to if the healing process stretched over the predicted 12 to 16 weeks, I do not want to contemplate.

Kids & Costs: Another point of view

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Guest Post by Frugal Scholar

Since I took issue with Funny’s** premise—that having children is intrinsically and unavoidably expensive—and since I promised to write something for her, here is a short version of what I would say to prospective parents.  First of all, I’ve read Elizabeth Warren’s books and articles. She is truly a voice for the American middle-class. I love her. In one of her books, The Two-Income Trap,  she avers that American middle class folks are in a bind: they MUST buy houses in neighborhoods with good school districts. These houses are pricy and come with high property taxes. Hence, both parents must work. Hence if one parent loses his or her job: disaster! This book, by the way, was written before the bursting of the housing bubble, or, as Funny (or I) would put it, the Bush Economy. [uh-oh! Evan, hang onto your hat! 😉)

When I read Warren’s book, a library copy as befits a frugal type like myself, I found myself saying NO. It doesn’t have to be that way. I feel there is always a choice.

Before I moved into the pricey neighborhood, I would check out the schooling in less desirable areas. Often, the schools are better than one would think. Or there are enrichment programs. I am skeptical of school rankings, incidentally, since they seem to correlate with the wealth and education of the parents. So that is what you get in the “better” school districts.

If the schools are really unacceptable, I would consider homeschooling. Why not? The money you save by living in a cheaper house could obviate the need for one parent to work. I would hate to do this myself, but there are many passionate homeschoolers.

If you decide you MUST live in the great neighborhood, why not rent an apartment or buy a too-small house? As anyone with kids in college knows, the years fly by. A little discomfort in the service of a greater good is a fine lesson to be teaching your children.

As a person who is hardwired for frugality, I run through similar processes for almost every decision I make, from the trivial (which tomato sauce?) to the momentous (which college?). As a general rule, I run a value-test on everything: with two choices, test the cheaper one first. That is why my son did soccer locally and didn’t go for the expensive and time-consuming traveling team. Why? He wasn’t that interested or good. That is why my daughter took a very basic ballet class at the local YMCA rather than at the upscale studio. Why? Ditto. Yet when it came to the summer, we opted for an expensive sleep away camp for both. Why? Because as members of a minority religion, we felt it was important for the children to get a sense of their culture.

I hardly need to say that other families will make different decisions, owing to the different talents and interests of the kids. I also happen to believe that most children are over-scheduled these days. That belief fits into my  general laziness.

My happy memories are of trips to the Children’s Museum, Aquarium, and Audubon Zoo—we were members of all and went a lot. Doing art together (I splurged on top-quality materials). Cooking together. Taking walks. Reading. Going to FREE concerts. We spent a lot on trips to faraway grandparents. And, through the years, I kept waiting for my children to get expensive.

**OOPS—just noticed that the post to which I took issue is a GUEST POST. I don’t know what Funny thinks.

(LOL! Funny thinks kids cost even more than pets. And that’s a lot!)

Don’t miss these great posts from Frugal Scholar:

Paula Begoun’s Skincare Recommendations: Anti-aging et al
Kitchen Remodel on a Budget: Beginnings
The Parental Safety Net

Can Minimizing Go Too Far?

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This is a guest post from Crystal of Budgeting in the Fun Stuff: A Personal Financial Blog about the Next Financial Step. It’s an open fiscal diary and a personal finance blog rolled into one that is looking to get as many people involved as possible.

Minimizing is in. I’ve seen three different articles in two weeks about getting rid of clutter and minimizing your junk. I am personally trying to declutter our home this month as well. BUT, I do have my limits.

I want my house to be rid of the actual junk…the stuff that just takes up space that I just haven’t Craigslisted yet. For example, I want to get rid of our old GPS, cell phones, my wedding dress and petticoat, and two boxes of Nintendo games and White Wolf magazines that we were unable to sell for a friend. I’ve already successfully sold a few things and am working on the rest.

I don’t want to get rid of our books, DVDs, board games, or Magic: The Gathering cards. Those are things that we enjoy or will enjoy again in the future. Do we read our books every year? Nope. Do we frequently watch our DVDs? Nope. But when I want to read the whole Harry Potter series again, I know where they are. When I want to bring The Princess Bride, Paranormal Activity, or Terminator 2 to someone’s house, I can easily pluck them off the shelf.

We own the board games and Magic cards for much the same reasons. Some games get played all the time (like Power Grid), but others only come up once in a while (like Merchants of Venus). That doesn’t mean we want to get rid of Merchants of Venus…we’ll just hold on to it until it’s requested again.

In short, I want to own these things for the ease factor and because I enjoyed them enough to want to have them as part of my life.

I just hope that the true minimalists (like these people) will not accidentally cause a bunch of people to go on a crazy cleaning spree and regret it a month later when they are re-buying the hobby gear they just sold or the clothes they just donated.

Enjoy these other posts at Budgeting in the Fun Stuff:

How We Chose to Buy Our Home
Diminishing Inheritance Returns
Let’s Get Controversial: Hiring Help

Buying Futures at the Supermarket: Groceries as investment

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Guest post by Pinchnickel

PHOENIX, Ariz. – Save big bucks by playing the commodities future market at your grocery store every week. Buy in season, freeze, preserve, and consume later when prices double. Save even more when you factor in clipped discount coupons.

Let’s go shopping. Today’s futures bargain is bananas. Late spring is harvest season in tropical Central America, home of those shoot-em-up banana republics. “America’s favorite fruit” has become a “price-fixed” commodity, meaning all local grocers charge the same price [currently in the Southwest about 69 cents a pound]. But grocers in your area may break from the price-fixing mold and list bananas as a seasonal loss leader. For example, a Phoenix grocery chain currently offers four pounds for 99 cents, or 25 cents a pound.

Bananas spoil quickly, but I’ll preserve the nutrients of that banana bargain by converting them into low-sugar banana bread and muffins stored in my chest freezer for future consumption.

Strawberries currently are arriving here by the truckload from California, as they do every year, and are now available for $4 a 4-pound container, or a buck a pound. To bank strawberries seal in a zip-bag and freeze for up to a year. I mix them with rhubarb for pies, but they can also be turned into toppings for shortcake or ice cream.

Spring is also the time when veggies grown in warmer zones like Mexico arrive at your grocers. They include asparagus, broccoli, spinach, carrots, cilantro. Preserve by blanching in boiling water and freezing for future use. Turn the cilantro into pesto—delicious spread on toast.

At other times of the year lower-priced pork, beef and even fish will arrive in your local grocery at seasonal prices. Fruits such as apples, peaches and pears arrive in late summer. Learn how to preserve them in syrup or as jams and jellies. Canning supply companies Ball and Kerr both offer recipe books by mail.

The very best “loss leader” season across this land, of course, occurs in early to late autumn, when the great American harvest begins everywhere. Leading the list of good buys then: white flour, beet sugar, potatoes, berries, apples, corn. Because I produce all my own baked goods, autumn is when I put in 100 pounds of flour and 30 pounds of sugar for use throughout the year, when a glut of flour and sugar hit the market for only 99 cents a pound. The same flour and sugar costs $2-plus later in the year—a 50 percent return on my commodities future buy.

If you’re a joyfully consuming foodie or simply a Pinchnickel like me, acquaint yourself with the harvests and when imported products arrive at your grocer, and buy ahead of need. Keep your freezer full of these wonderful bargains. Save big, and enjoy those buck-a-pound strawberries over shortcake next January when your friends are paying $3 a pound for them.

Images:

Bananas: Steve Hopson, Creative Commons Attribution-Share Alike 2.5 Generic license, Wikipedia
Strawberries, Ken Hammond, U.S. Agricultural Research Service, public domain
Asparagus: RyanFreisling, public domain
Flour, R.Wampers, Creative Commons Attribution-Share Alike 2.0 Belgium license, Wikimedia Commons