Who's living a middle class life on < $75k in a HCOL area?

**MonkeyMama** · 02-10-2009, 05:14 PM

How do you define HCOLA? I live in a HCOLA that we consider LCOLA. But HCOLA compared to most the country. LOL.

**zetta** · 02-10-2009, 05:16 PM

Just use your judgement of whether your area is HCOLA or LCOLA compared to the rest of the country. For instance, most of CA is HCOLA, most of South Carolina is LCOLA.

**wincrasher** · 02-10-2009, 05:18 PM

Well done Zetta - this will be fun.

If you are in debt, then you need to live in a dietCOLA.

**MonkeyMama** · 02-10-2009, 05:46 PM

What is your gross income? $75k as of 12/31/08. I just got a raise but we were making $45k in 2003, and raises since then to $77k starting January 1. We have lived our lifestyle on much less.

What are you spending per month on the following:
Rent/Mortgage $1100
Home Insurance $100
Car Payment $0
Car Insurance $125
Health Insurance $800
Life Insurance $50
Phone $60
Internet $40
TV $60
Trash $0
Water $90
Electric/Gas $100
Groceries/Supplies $500
Gasoline/Oil $300
Other Entertainment /Fun $350
Retirement savings $333
Other Savings $250
Taxes - Income/SS $800
Property Taxes $375
Vacation fund $125
Car Repair Fund $100
Preschool $300**Temporary - back to savings in 2010

Describe your house or apartment, and the neighborhood - Our house is 2600 sf in an "upscale" neighborhood. Upscale for the city we live in, but upscale is relative if you ask me. I'd consider it middle class. Some of our neighbors think it is Beverly Hills - pfffftttttt. It's flipping Sacramento.

Describe your cars -- did you buy new or used, and for how much - The cars we drive now, we bought one year used for $7888 & $12k. The first we bought in 2002. The minivan we bought in 2006. We paid cash for both, mostly with money we saved before having kids. Always drove old clunkers (think $1k price tag) before that and I find little difference in our repair bills now. We save $100/month to ideally replace both cars in 15 years for about $10k.

How did you get to this point? I touched on it in the other thread. Dh lived at home through college, worked and saved a ton. I worked through college to pay my way while living on my own. But used to living on nothing, I saved most my wage for a year out of college. We bought a home and saved dh's income for 2 years before kids. He stays home with the kids. Savings before kids paid for a large down payment on home and a comfortable lifestyle until my wage caught back up to a 2-income level. Buying a home in 1999 has kept our cost of living down considerably. Rents and housing costs have skyrocketed since. Our home is still worth considerably more than we paid in a city where most are upside down.

I decided I do live in a HCOLA area because everyone is fleeing here for cheaper living elsewhere. BUT it is also our secret to doing well here. We moved here from an area that cost about 3 times as much. That is why we have such a nice home. We couldn't afford a house back home. Here we went all out because it was "cheap" from our perspective. & all of the costs of home ownership are far cheaper than even renting back home, so we feel like we have it pretty good.

We never borrow for anything (but mortgage). We buy used if it's all we can afford. Our house is filled with hand-me-down and used furniture. No one would know just looking at it. I never want to borrow another dime again, personally.

Oh yeah - our health insurance is insane, but I have an awesome retirement benefit that kind of makes up for it. IT's really a wash. My boss contributes 10% of my income to a 401k-like plan. IT's in my name; like a 401k. So our current retirement contribution rate is 15% though we only contribute 5%.

I wouldn't call our lifestyle basic at all. We don't want for much. Though I would label us pretty middle class all the same.

When we moved here in 2001 we figured we could live on $40k/year. Maybe a bit idealistic. But the expensive part of kids was affording their health insurance. We went from paying nothing to $10k/year pretty rapidly. I think we could do okay on $50k, with our current benefit situation. We could certainly downsize our home considerably.

$75k was definitely the tipping point from "temporary one income living" to "maybe we can do quite well on one income indefinitely," for us. Most of our peers have large house payments and large car payments though. They would tell you $75k is not enough.

**mommyof4** · 02-11-2009, 04:21 AM

Sorry, I don't know these terms: HCOL and LCOL

**Hot dog** · 02-11-2009, 06:25 AM

High Cost Of Living Area and Low Cost Of Living Area

**mommyof4** · 02-11-2009, 07:16 AM

Originally posted by Hot dog View Post

High Cost Of Living Area and Low Cost Of Living Area

thank you

**FrankFacts** · 03-31-2016, 04:39 AM

I don't have kids, so I'm not relevant, but I only see this being a comfortable life if a family waited a while to have kids, and saved a lot of money in advance. It's easy to save money without kids on $75K/year for 10 years, and then feel more comfortable once the kids arrive (in mid-30's). Just my thoughts.

**MonkeyMama** · 03-31-2016, 06:58 AM

This is an old thread, but I Can't believe I forgot to mention that we paid no income taxes. No income taxes. No daycare. I know many many people living almost identical lifestyles with twice the pay. Because so much of it goes to taxes, cars, daycare, etc. (We did pay some daycare for sanity purposes, but we did not pay $1k per child "the going price" kind of daycare and we never "needed" daycare).

In general I get the impression we have a nicer house than most but a smaller mortgage than most. Fast forward 7 years. You can rent our house for $2k/month (which has probably always been the going rate). I know many many people paying $2k/month for rent or mortgages. Most of them have smaller homes in less desirable areas. They did not put 20% down or buy as early. Or they do not have good credit for better interest rates.

With lower interest rates, we've lowered our mortgage payment to $900/month. Same house. The norm around here is most people bought too much house or got greedy or borrowed all their equity. We are 40. Most our neighbors and kids' friends' parents are 50-ish (people having kids later these days). They have pretty much all lost their homes to foreclosure and are starting over. It really is the norm where we live. Can you imagine?! I think our timing in having kids really helped us to keep our sanity. I was home on maternity leave with my kids ($0 household income) during the peak of the bubble. Even if someone had talked me into borrowing some equity in my house to invest or something, I couldn't have afforded the loan payments. We were in such a frugal mindset while everyone else went crazy with home equity. The worst of it was literally the two years I took significant time off for maternity leave; my spouse was not working. I am pretty confident we would not have been crazy stupid but I imagine we probably would have been a little stupid if we had been making good money at the time. We were only in our mid 20s. Not like we had a lot of age and wisdom on our side.

**~bs** · 04-03-2016, 07:42 AM

I'm not sure why you list "married with kids" as one of the requirements, as I'm sure "single no kids" just as tough since you don't have a dual income to split expenses.

I live in the 9th most expensive city in the US, and the most expensive state in the US. At least with other expensive states, incomes tend to be higher to offset the cost. The cost of most produce is easily 2x the cost of other states. Electricity costs is around 4x the cost (to give some examples).

Describe your house or apartment, and the neighborhood - 600 sq ft condo in downtown. Paid $325k for it maybe a decade ago

Describe your cars -- 1 car used for $40k. Paid cash

How did you get to this point? Work. A lot. I own a rental as well. Nowadays I work 1 job, but have a small business as well.

Edit: I live comfortably, but also just noticed you also stipulated 75k as the threshold. I lived under this income limit for years, but no longer do so. So I guess that's another way my situation isn't relevant.

**Luxur** · 04-08-2016, 11:58 PM

Starting over in middle age.

Message removed.

Who's living a middle class life on < $75k in a HCOL area?