The Middle Class Crunch

With our economy and our dollar how they are and with all of the Presidential Candidates using scare tactics and pretty little economic plans to lure votes, there has been a lot of talk recently about the "Middle Class Crunch", particularly the housing market situation, health care costs and out of control childcare costs.

Now, I'll admit that inflation is out of control (even thought the government completely denies it. Hello! Where I live a gallon of milk is $5 right now!) it's getting harder and harder to make ends meet. But, honestly, is it really just the rising costs making it so difficult? I don't think so. You want to know the biggest part of the problem? Debt.

That's right, it's your credit cards. It's your car payments. It's your big screen TV that you just HAD to have. It's that huge house you bought 3 years ago that you really couldn't afford, so you got an ARM. Debt. Americans spend money like there's no tomorrow - money that they don't even have! Look, just because you have a huge credit limit, doesn't mean you need to use it. And just because they tell you that you can pay that monthly payment, guess what, it doesn't mean you can afford it!

To quote the linked article:
"A generation or two ago, Mom -- and it was usually a mom -- could stay home with the kids while Dad put in the hours at the office. His income was enough to let them own a home and a car, and put a pot-roast dinner on the table once a week."

Exactly. The article hit the nail on the head without even realizing it. They had enough for what they needed and the occasional treat. Today we don't think twice before going out to eat 5 times a week (or more, for some people) and putting it on the credit card. We have huge walk-in closets full of nice clothes - your probably still paying them off, too. We have $50,000 SUV's . We have piles of store cards, cards with airline miles, cards with cash back rewards - and it just KILLS us to miss out on a reward. So what if you spent $25,000 (plus interest) to get that free airline ticket , it was FREE!!

Now the average costs for childcare in this country are $8,303 per year, per child for infants and $6,215 per year, per child for preschool. That's a lot of money, I understand that. The cost of childcare is rising at twice the rate of inflation. Many claim it's impossible to have a one-income household anymore. Bull.

I'm a SAHM. My husband works very hard for me to be able to stay home with our son. We're by no means rich but we don't have to worry either. Why? Because we make sacrifices and we have priorities. I manage to keep our monthly food bill to $300 a month, including diapers, formula, baby food, toiletries, etc. It's hard, I have to be creative sometimes, but I do it. And no, we're not living on Hamburger Helper, either. We will have our house paid off in 6 more years - we've only lived here a year and a half. We're maxing out our Roth IRA contributions every year and my husband is maxing out his 401k contributions. That's a ton of money going straight to investments. Not including our house payment, we live on $10,000 a year so that we can do that. That $10k includes utilities, gas, insurance, cell phones, food, entertainment - everything. And we end up putting a small portion of that in savings.

I know that for some families, it truly isn't possible to have a one income household. But I think that the vast majority of families could do it, if they really wanted to. It's about discipline, it's about priorities, it's about goals, it's about common sense.

I'll get off my soapbox now. ;)