Last month The Atlantic released two articles both focused on the “Middle-Class Money Struggle” in America today.
The first by a somewhat renowned author living full time (not just in the summers like the “rich people”) in the Hamptons of New York, and the other by a self-employed writer and business owner living in Middle America. Both are considered “Middle Class.”
We found the juxtaposition of the ideas conveyed in both of these articles to be interesting because the major difference in their attitudes about being middle class, and their money situation, centered around their choices and spending.
Two middle-class families with very different lifestyles
One author, Anne, lives in suburban Ohio outside Cleveland, which is considered to be a low-income area, with a low overhead lifestyle. She has a reasonable mortgage with a low-interest rate and few other expenses. Her annual income of just over $40k affords her the option to eat out a few times a week, have a house cleaner, and she has at least an extra $400 to spare in case of emergencies.
The other author, Neal, lives in a much more expensive area, has a hefty mortgage, unsteady income, and is paying off mounds of debt incurred from the past few decades, including putting his two daughters through private school and college. He barely gets by and definitely could not afford a $400 emergency expense.
Choice and circumstances play a role in money management
The reality of their two situations, and why Anne lives happily off $40K, whereas Neal is struggling to make ends meet, comes down to choice. Neal admits that some of his choices were not the wisest for his family’s financial security, but hindsight is 20/20. Anne chooses to live in a neighborhood where she’s near others living in poverty because it keeps her cost of living down. She believes this is one solution to the “Middle-Class Money Struggle,” folks can get richer by moving out of the expensive coastal cities to more affordable neighborhoods in less popular areas of the country. She’s accepted the fact that she’ll “never be able to re-join the cool kids.”
However, everyone’s circumstances are different, and she admits that she’s been fortunate in that regard. Her son can go to college, essentially for free, where his father works. Still there is the choice factor. Neal wanted his girls to go to prestigious schools so they could keep up with the Joneses’ kids, and felt that choice should be available to them.
The American Dream is not right, or feasible, for all
The scariest financial reality is a sometimes blind clinging to the American Dream, which has proven to run many families’ finances into the ground. This dream corresponds to a 2010 report titled “Middle Class in America,” where the U.S. Commerce Department “defined that class less by its position on the economic scale than by its aspirations: homeownership, a car for each adult, health security, a college education for each child, retirement security, and a family vacation each year.”
Once again it comes back to choice. In these articles, we see two families, two different lives, and two different approaches to finances. One feels marginalized with no wiggle room. One feels empowered with choices. What decisions are we each make that puts us in control of our finances?