The Margin: What does a ‘middle-class’ budget really look like in today’s economy?

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What does living in the middle class really look like today?

Income statistics say you’re middle class if your family makes $45,200 to $135,600 a year, according to the Pew Research Center. Social tradition holds it’s having a steady job, owning a home and car, being able to save for retirement and send the kids to college, and taking an annual vacation.

But, as the standard picture of middle-class shifts — or in some cases disappears — there’s perhaps no better way to understand the changes than by looking at the real-life budgets of families across the country.

The New York Times recently did just that by comparing and contrasting the budgets, line by line, of four families from around the U.S. All four households fit into that middle-class bracket, but their circumstances vary widely.

On the lower end of the income scale, for instance, there’s a Sheboygan, Wis., family of four, including two toddlers. The parents earn $4,000 a month after taxes from both a part-time retail job and a line cook gig, neither of which offers paid time off or health insurance. Their monthly expenses include:

  • $600 in rent on a two-bedroom house
  • $550 in student loans
  • $800 on groceries and dining out (which includes the supermarket tab, toiletries and supplies for three cats)
  • $482 on transportation (includes 2 cars, one is paid off)
  • $340 in credit card debt

The complete list of expenses adds up to $3,232 a month, leaving them with $738. They take turns watching the kids to save on child-care costs, and the children are covered by a state-run health insurance program. Mom and dad are uninsured, however. “We have such high levels of stress from juggling our schedules,” mom Lauren Koch told the Times.

But they’ve got more left over at the end of the month than the San Francisco couple with an infant daughter who earn more than twice as much. Amanda Rodriguez and David Allen take home $9,675 a month, which gets gobbled up by:

  • $3,535 for rent on a two-bedroom apartment
  • $2,800 for a nanny-share
  • $500 on clothing, haircuts and happy hour
  • $425 for retirement savings (plus $550 pretax)
  • $380 for health insurance (pretax, not in total)
  • $210 on transportation

Their list totals $9,760 at the end of the month, meaning they break about even. “It’s a very expensive city,” said Rodriguez, noting that, “we are actively making a choice to be here.”

Of course, sharing such itemized budgets opens the floor for plenty of debate about where people choose to spend, and where they scrimp and save.

MarketWatch recently shared a budget drawn up by Sam Dogen of the Financial Samurai blog that showed how a family of four earning $350,000 a year in an expensive metropolitan area barely qualifies as middle class. Dogan said that the budget line items were vetted by thousands of people living in pricey coastal cities like San Francisco, Los Angeles, New York, Boston and Washington.

But it was hard for many readers to wrap their heads around a family dropping $24,000 a year on preschool, or $70 a day on food, especially considering that the median household income in the U.S. is $57,782, and some 95% of U.S. households don’t pull in anywhere close to $350K.

Read more: This budget shows how a $350,000 salary barely qualifies as middle class

“They spend more on childcare than I and most other people make in a year,” wrote one reader in the story comments.

Another person, who claimed to also live in southern California, noted that the housing and childcare costs are realities of the region, but many other line items suggested this family should more accurately be described as upper class.

“If you can afford entertainment, vacations (multiple), and date nights (as part of food?!) as THREE separate line items, while still saving for college AND retirement, and STILL have over $1,400 net cash every month, there is no way you’re struggling,” this person wrote. “You’re not ‘barely middle class.’ You are doing very well.”

Even Rep. Alexandria Ocasio-Cortez responded on Twitter with ‘Struggling’ … with what? Math?”

People will always have opinions about the best ways to save, spend and invest money, but the reality is that different households have different needs.

The cost of living varies across the country, and many households with incomes that look rich on paper are burdened by student loan and credit card debt, child-care bills that eat into their earnings, as well as housing costs that continue to outpace wage growth. That’s why some people who earn $90,000 a year don’t consider themselves rich, even though they earn more than 87% of the U.S. population.

Family size can also weigh down finances. A couple earning $43,693 to $131,078 could be considered middle-income, according to Census Bureau and Pew Center data crunched by personal-finance website HowMuch.net. But if they have a kid, they need to make another $7,000 to meet the minimum threshold of being middle class (which jumps to between $50,697 and $152,092 for a family of three, and $60,499 to $181,496 for a family of four.)

Read more: Who is really middle class in America? This chart shows just how much family size matters

Bottom line: even as the U.S. has been in a decade-long bull market, the middle class — as traditionally defined — is shrinking, and what it means to be middle class is being redefined in different ways all over the country.

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