As a kid, I could judge the state of our family finances just by looking at the labels on the cans my dad put in our shopping cart on Sunday afternoons when he picked up groceries for the week. If Dad grabbed the spaghetti sauce with the generic black and white label from the shelf, I knew asking for a treat at the register probably wasn’t going to fly. But boy, oh boy, if he picked up steaks at the meat counter, it meant he’d had a good week, and I’d be happily nibbling away at a Mr. Good Bar on the ride home.
We never talked about money around the house growing up, most likely because there wasn’t much to discuss. We didn’t live paycheck to paycheck. It was worse than that. My dad worked blue-collar jobs for hourly pay all his life. Sometimes he’d make a little progress. By the time he turned forty-one, he had owned a brand-new brick house with a $50,000 mortgage. Luckily, he no longer owed the bank on the old pickup truck he drove around. But my responsible father had also managed to amass $23,000 worth of credit card debt. It was finally paid off about a year after he died when the death benefit paid out. His funeral expenses were borrowed, too. My father worked his tail off all of his life and still needed to borrow money to bury himself.
This isn’t just a one-off story about a guy that struggled to make a living thirty years ago. Unfortunately, it’s an all too familiar tale. Today, it’s just as tough for the average family to make it. Wages began a steep decline in the early 1970s until the 2000s. While they’ve climbed up slowly over the past two decades, they’ve barely stayed in front of inflation, and they are nowhere near where they were in the 70s.
Statista Research reports that sixty-six percent of US households made $100,000 or less in 2019. I’m not an economist, but as a realtor, I talk to many people who must take a hard look at their financial situation to see whether or not they can buy a home. Their finances often paint a slippery grasp on the American Dream. The reality is that $100,000 annual household income doesn’t stretch as far as you think it might for a small family.
The problem is that it sounds like a lot of money. Still, when you do the napkin math on the finances for a typical family of four, it becomes obvious that trying to live off anything less is quite likely a paycheck-to-paycheck existence.
After shelling out for taxes, a mortgage, childcare, health and car insurance, car payments, and student loans, the average family isn’t left with much. There are also cell phone bills, groceries to buy, lights to keep on, and internet to pay for. At the end of the month, many families have little left for emergencies or savings. Then, there are clothes to buy, roofs to fix, and flat tires to plug. Unpaid medical leave and unexpected job losses are difficult to bounce back from when money is already this tight. It’s easy to see how difficult it can be to dig out of credit card debt or prepare for the future.
Forget about getting ahead. Today, most people are just trying to keep up. If making $100k a year doesn’t mean financial security, there’s something wrong. Perhaps it’s always been this hard. Maybe it's unrealistic to think making a living could (or should) be easier. It’s just a shame that for someone to finally be debt-free in the world today, they’ll likely also be dead.