What is the mindset of middle class people that keep them middle class?

In My Humble Opinion
161

Okay, if having a family is that big a goal, shouldn’t it be worth saving for and working towards? Is it such a “risk” to suggest that someone wait two years so they can get college certificate? Or to wait until they actually have a job that pays more than $9 an hour (the poverty line)?

I have a variety of goals that I want to achieve, and having kids at this point is slightly lower than racing in an Ironman and climbing Mt Kilimanjaro. Hopefully I can achieve those two this year and move on to having kids.

The attitude you are expressing isn’t any different than all the millions of people that put themselves into debt for something they HAD to have. Car, house, boat, vacation, crack cocaine.

Sure putting it on a spread sheet is hard, but are you and Hakuna Matata suggesting that there are zero factors to consider? Is it wrong to suggest to a 16 year old that she could wait until 18?

Kids cost a lot of money, they need things like food to live, a safe place to sleep, and clothes to stay warm. If having kids is such a high priority, why shouldn’t that also influence all of your other life decisions?

If having a child is a high priority, recognize that they might get sick, and think about how you’ll pay to keep them alive. Having a child was important, keeping the child alive and healthy should also be important.

Sure you may want to be a starving artist living in a van. But if you want to have kids so badly, you should at the very least consider that raising a baby in a van without any health insurance is going to be unfairly difficult on the child.

All I’m suggesting is that if having a kid is that high a priority, it means you have to make sacrifices somewhere else–like planning a career that will allow you to raise a child.

Yes, it’s a risk, but it’s also a risk to have a child you can’t properly care for. Having a child is a massive responsibility. If having one is your highest priority, at least have the forethought to plan for it. It means getting a job with an income and benefits that can support your lifestyle choice.

162

I’d argue that the Upper Middle Class has less excuse to not be financially secure, but that doesn’t mean its either automatic or easy. It is just as “easy” to “deserve” to want to buy a nice car when you make $120k a year as to think you “deserve” candy bars on food stamps (per the thread in great debates) below the poverty line. There are a lot of perceived expenses that go along with that income and which there is pressure to spend on - everything from well manicured hands to nice cars to private schools for the kids. And, hey, you make a lot of money, what’s a $60 pedicure!

163

I know a number of adults who were raised pretty much by hippies living out of the backs of vans. Or writers. Or artists. Or musicians. Or actors. And I know a number of kids who are being raised by the same. And while I wouldn’t have wanted to grow up traveling the country with my Dad’s folk band, or want to raise my own kids traveling from Ren Faire to Ren Faire - these families, in my experience, turn out not more or less dysfunctional than normal families. I don’t know them well because just looking at them drives me, with my need for SECURITY, nuts, but they are not me. They don’t have all the material stuff, but they are making that choice. And that’s what I was referring to upthread about people who choose to be poor. They get enough to eat, and health care (often via Medicaid, although Minnesota has UCare or whatever its called).

I think there is a difference between adults choosing to have children knowing that they are following a non-traditional and non-secure path, and a sixteen year old’s awareness of what having a child will be like. You can have children on very little money and be successful at raising them. It isn’t a path I would choose, but that doesn’t mean its irresponsible.

ETA: As a working mom, I’ve had my share of allegations that what I do - having children while working - is “unfair to the child.” Bullshit. And I’m a little sensitive to “other people’s values” intersecting with “whether I should parent.”

164

Absolutely. It is amazing how an increase in income can make what was unthinkable luxury into an absolute necessity.

I’ve lived as a potter’s assistant and I’ve lived as a lawyer; when I was a potter’s assistant, a house and a car were as unobtainable as Scrooge McDuck’s bathtub-of-money. :smiley:

165

Why can’t they get that certificate or job as a parent?

I’ll tell you a secret: there really is never a ‘good time’ to start a family. There is always some stress or pressure, some work or career-related reason not to do it.

I’m a lawyer. Exactly when would be a “good time” for me? Before I’m in law school? When I’m in law school? When I’m articling? When I’m a young associate? When I’m going for partnership?

That’s right - none of the above. There is never a ‘good time’. If by a ‘good time’ you mean ‘financially secure and free of work-related challenges’. That only happens when you retire - and retirees are usually a trifle old for parenting.

You aren’t going to win the analogy-of-the-year award with that one. :smiley:

Fact is, you can put off that dream cottage until a better time (let alone that crack habit :D), but there are limits to how long you can put off having children before it is too late.

No.

It is surprisingly within the financial reach of the average person to keep an infant healthy and fed.

Most of the truly major expenses (aside from daycare, which is only an expense if you are a working parent and there is no stay-at-home parent) of child-care arise as the child grows older.

The gamble is that, as the child ages, you will advance in your chosen career sufficently to meet these expenses as they arise - setting aside a bit on the way for college, etc.

166

Yes, I should have known the obvious responses would be, “I know a poor person that is a great parent.” And “it’s surprisingly affordable to raise an infant.”

Which is fine, can we at least agree there is a cost slightly greater than zero? Or should we continue to descend into how tax credits and social services can make it profitable to have more kids?

Was this thread not about the mindset that keeps people middle class?

If someone is making $30k a year, financial security, and even financial freedom is within reach. If they decide to have children, that cost will come out of their discretionary spending. And if having children is really really really really important to them, it will be sacrifices (ie not being able to afford the other things they want).

There exists a mindset that will drive that person into poverty; there is a mindset that will make and keep that person solidly in the lower middle class; and there is a mindset that will make that person rich.

I thought we were here to discuss the middle scenario. From what I’ve read in this thread, it involves an *aversion *to saving. In some cases that aversion is hatred of a rich person they once knew. In other cases it is an ignorance of the financial world. In a third case it seems to be a weird view of retirement that I can’t quite summarize.

167

The problem here is that you are focused too much on extreme scenarios. What you are failing to see is that having a child is not a singular event, like buying a car - it is a process that lasts many years. Presumably over those 18 years or so your financial situation will change.

Certainly, having kids too young is problematic, no question. But the reason is not lack of money per se - it is lack of maturity.

To my mind, there is never going to be a "good’ moment to have kids, but there are definitely some bad ones - too young, too old, in a bad relationship, in a place where you are chroinically unemployed, etc. Aside from that - as long as you are a mature person, willing to work hard and not dismayed by the undoubted challenges of parenthood, you can make a go of it even if your current financial situation is not wholly settled into the “secure” zone. For most people seeking an upper-middle-class way of life, that doesn’t happen until they are in their late 30s early 40s, just when child-bearing becomes slightly more problematic for some.

168

Yup. Having a child isn’t a financial decision, though there’s most certainly a financial aspect to making that decision. It’s douche-y to be a robot about this.

169

And if you wait until you are financially secure - and that takes a little longer than hoped, besides the fertility issues, you’ll have kids going to college just as you hit retirement age. I know a number of “Dads at 50” and while the kids have great financial security now, there are issues - lifespan issues - Dad is more likely to have a heart attack - college issues - Dad will be 68 when they start college, he’d better fully fund it AND retirement. Those two things don’t add to a child’s security.

170

Right, and the same people who preach that you have to sock away a significant percentage of your income from age 22 on don’t seem to twig that you have to make the same committment, time-wise, to child-raising, because trying to do it when you’re old is fraught with complications. Funny that if it doesn’t have a $ in front of it, it doesn’t matter. SOS.

171

Fine, drop the kid part of all this and go back to talking about houses, cars, and crack.

I always forget how fucking sensitive parents are. You have my apologies.

*Buying *a house is a major financial decision, and *owning *a house is a huge responsibility. As I said in my previous post, there are three mindsets when making this decision that will ultimately lead a person (at any income) to poverty, middle class, or wealth.

The previous thread talked in great length about what drives people into poverty and keeps them there. And the recent mortgage melt down exacerbated those conditions. A lot of people bought houses without understanding what home ownership meant. They didn’t understand the housing market. They didn’t understand mortgages. And in the end, they lost everything. Right now, 1 in 7 mortgages over $1million is in delinquency. It didn’t matter what you started with, if you had the wrong mindset you went from wealth to poverty in about a year.

Meanwhile, a lot of people did just fine. The bubble burst and they kept going. They were middle class in 2007, and they’ll be middle class in 2011.

And a few people ended up better in 2010 than they were in 2008.

172

Yeah, sorry to be snappy; we did make sure we would be able to support our family while still realizing our (admittedly modest) savings goals. I only objected because you made it sound like a primarily financial decision. You still seem to have a palpable level of disdain for parenthood, so I’d recommend you avoid it.

…and I’m better off now than in '08…

173

Awesome, in your opinion what is the mindset that allowed to you weather the storm? Did having some savings in the bank help or hurt?

174

Not picking on you - your post is just a recent example of many in this thread that assume that the parent will pay their kid through college (how very middle class!). However, pretty much all financial planners will tell you to prioritize saving for retirement over paying for your kids’ college. After all, you don’t get loans and scholarships for retirement.

175

I have to admit that I was lucky enough to have bought our house on the low side of the boom, and in a location that didn’t suffer as much from the bust. My retirement savings took about a 25% hit, but I’m still young enough to recover that and more. And those savings weren’t in the bank; that yield doesn’t even cover inflation…

I guess the only wise decisions I could be considered responsible for is not taking out a loan I coudn’t afford and keeping in mind that investments are for the long haul, not the short term. Oh, and having my kids, who are the light of my life!

176

I’d dispute the “working class” moniker for auto factory workers. While some of them have working class attitudes, the vast majority of them have full, middle-class lifestyles and the income to support it. It’s true that the non-trades have less autonomy, but their special, highly-paid status kind of lifts them up two notches on your scale.

177

Yes, but I personally think it would be immoral for someone who was better off than middle class to not pay for their kids college, or at least help. I mean, the point of this thread is by that time in your life, you are well off.

178

You started flinging the f-bomb first. :wink:

I think the problem is that we’re agreeing with most of what you’re saying. You’re just not seeing it.

Payday loans? Bad idea.
Overspending? Bad Idea.
Credit Card debt? Bad Idea.
Perpetually leasing Cars? Bad Idea.
Balloon Payment ARMs? Bad Idea.
Crack Cocaine? Bad Idea.

Retiring with less than X million dollars in the bank? Well, a LOT of us just aren’t in the position to do anything about that. When The Wife and I were Young DINKS, we got married and bought a house. We then started making SERIOUS bank, but didn’t really save any of it. I then locked on the idea that a much bigger house would be a great way of enforcing savings. We’d then also have a house to grow into, in the case of a kid, we wouldn’t have the added expense and hassle of finding yet another bigger house.

After moving in, I saw that the ARM second mortgage was untenable and made changes so that a)it would be a fixed amount for the length of the loan, and b) that we could just scrape by with one income.

We tended to purchase cars used, pay them off, then keep them, avoiding the whole auto depreciation thing.

We throw SOME percentage at retirement funds.

We try to pay cash for a great many of the things we need.

We have three or four sources of funding for retirement.

We will NOT have 1 million dollarz when retirement comes. We will still be middle class. Our incomes have dropped appreciably since we moved into the bigger house, but we can still squeak by on one income if once of us loses their job. Partially due to my wife being under employed, partially due to the economy dragging on my government job.

I am so so sorry, but I can not and will not be able to meet your criteria. Yet I feel I have provided a stable and upwardly trending environment for my family. We could make more money, but it would be at the expense of the things that we are taking great value from: Time with the family, a wife that is at home and happy, and sane. (When she was working hardcore software development she had a number of mental breakdowns…the family as a whole is MUCH healthier now.) Would I like to be comfortable when I retire? Of course! Does it look like that’s going to happen? I can’t say at this point, we’re in kind of a holding pattern. I DO know We don’t have your recommended percentage of our income to save for retirement, near term expenses, and College. I guess that makes me a bad person.

179

And there you go. You exemplified the mindset of someone that will move up in status rather than stay or slide down. The mere fact that you have retirement savings means that you will at some point be rich enough to stop working. And clearly you are striking a good balance between your current life and the life you want when you retire.

For all those that are currently “middle class,” try to remember that when you retire you will be rich. It’s a weird concept, but you will have millions of dollars and be able to stop working.

The mindset that will keep a lot of people in this thread middle class is one that rejects retirement savings, in favour of working a middle class job until they die.

180

No, it absolutely does not make you a bad person.

But it might make you a stupid person if you can’t look back and understand factors that lead to your situation, and then explore the mindset that created and perpetuated the outcome.

Remember this is about the mindset that causes people to end up in exactly your situation, which is essentially having too little in retirement savings.

Essentially, what you said was that in your early life you made a good solid middle class income. And instead of first putting money into retirement, then into medium term savings, you spent in on a house.

Conventional wisdom says to buy a house that is three times your income. The trick is figure out what is your income:

  1. The mindset of the poor is to believe they have more money, so they buy a house based on what they think they’ll make, including tips, bonuses, raises, overtime, etc. The result is a house they can’t actually afford.

  2. The middle class mindset is to break even, buying as much as as they can afford. They’ll buy a small starter house, make some money, then buy a bigger house, rinse lather repeat. Always living at their means.

  3. The rich mindset is, wait, is that a dirty word? Can I say rich?

Forget it, the third mindset is to live beneath your means. What that might look like is to take a salary of $50k a year, and put 6-10% into retirement. Then pay taxes, and put 10-15% into medium term savings. After that, you can buy a house three times your “left over income.”

So three people, all making $50k a year. One buys a $150k house and goes broke; another buys $120k house and does just fine; and the third…

What do you suppose the third person does? Or should we wait until another thread?