MSN money has some stories on middle class couples who are finding it difficult to get by financially. Many of them have legitimate problems (though much of their pain is self-inflicted by spending too much early in their lives), but one story stood out to me. This couple is having trouble making ends meet on a six-figure income:
"We consider ourselves middle class, making a six-figure income. We own our home and have two kids, one in college (and) the other attending college in the fall. We both have a commute to work of over 45 minutes. Even though our income is higher than those you mentioned, we struggle to stay afloat with the rising costs of car insurance, gas, utilities, food and other necessities. Because of our income, our kids don't qualify for any college financial help.
"It takes both of us working extra-long hours and penny-pinching everywhere we can to make ends meet. We cannot afford big vacations or anything extravagant. We try to build a savings, but every time we get some in the bank, something happens such as car repairs, house repair, etc., to wipe it out and bring us back to the start again. It is frustrating and depressing to work so hard and never get ahead."
Ok, I can see the fact that they may not qualify for college financial help, but is this a surprise to them? Haven't they been saving for these inevitable expenses? And what about "struggling to stay afloat with the rising costs of car insurance, gas, utilities, food and other necessities" and "working extra-long hours and penny-pinching everywhere we can to make ends meet"? Something's just not adding up here. They have an income in the top 20% of all incomes in the U.S. and they are struggling to make ends meet?
Anyone want to guess what the problem is here? My guesses:
- They're simply spending too much. They have no control on expenses.
- They didn't save much for college and are now strapped because they have living expenses PLUS college costs for two (and soon to be three) kids.
- They live in an expensive area of the country. $100,000 per year is a lot, but it's more in Omaha than it is in Los Angeles.
For some thoughts on the various issues surrounding this story, see these links: