Is "standard of living" BS?

A month or two ago I saw an article online claiming that the minimum gross household income for a family of four to live comfortably in my state was $174,000 per year. It gave figures for other states, with the usual suspects like NY and CA being more expensive and WY and ND being less, etc. but generally the numbers were in that sort of range.

I no longer remember who wrote that article or where it appeared (I could probably look it up, but I won't right now), though I do remember that I came across it because it was passed around LinkedIn with much fanfare, amid people complaining about how they weren't being paid enough or something. It made me so irritated I'm still thinking about it, and it prompted me to write this!

There are definitely lots of people who are underpaid, and there are indeed way too many people who struggle and are unable to live comfortably. (As I struggled, for much of my life.) But this article was suggesting that to live comfortably, people must earn an amount that, to my eyes, looks too big by at least double.

And it got me thinking about 1) what sorts of habits and expectations and values must people hold, what sort of lifestyle must people lead, to arrive at a figure like that? And 2) what sort of effect does an article like this have on the way people think about their needs and their finances? Clearly, there is a lot more I could say about it, but I'll leave it at that outline level for now to give you the basic idea.

And then the meta-level question, which I referenced in the title of this thread, is what all this says about "standard of living". This concept is tossed around and casually accepted, it's named expressly by politicians and implied by advertisers, and even children seem to come up with an intuitive notion of it. But is it meaningful? Is it useful? Or is it a harmful lie? (Right now I feel like I have an answer to these questions, but I will leave them as questions because I am willing, eager even, to have my mind expanded on this topic by whatever you, Permies, might write about it.)

I have several siblings and many cousins and my husband, daughter and I are "the poor relations" by metrics just such as these.

But...we are the only ones with no consumer debt. (All the debt we have is a mortgage we can afford to pay extra on every month.)

We have savings.

We have far, far less stress than the cousin$ whose lifestyle-induced anguish I hear about from my grandmother.

I get to homeschool my daughter and pursue side hobbies--feeling so free to be me.

I feel like the richest one of them all, with an income less than half of what what the OP has cited above. It's mindset and lifestyle choices--I am so blessed that mine have set me on the track I'm on.  

It's funny because I've been wondering the same thing over the past few years.  Over these years, I've heard many stories of the same ....."Why can't I and my family live on $150,000.00 per year....there is something wrong!"   To be sure, context is everything in this issue.  Health concerns for the author or family member could push finances to a critical limit even if one were making $500.000 per year.  And then there is the "How do you fix it?" issue of those born into a community that was livable in 1970, but then catches on fire in terms of desirable property location.....and the cost of owning there years later becomes prohibitive.  But even given the items that were once considered luxuries and now are considered 'essentials' for living, I do find myself wondering just what the typical household considers a 'necessity' for a good standard of living.   Certainly, some of these will change over time, but I'm curious as to how the question "Can we afford it?" is addressed when certain purchases are made.  Again, I do feel this to be a very complex and contextual issue for discussion, but one I find poorly addressed in the general media on livability stories in recent years.  As a corollary, if anyone has seen a good article that addresses this issue, I would be most interested in reading it.

"poverty line" is the metric in our neck of the woods.  To meet the poverty line for a single person household in my city, they must make $26 per hour, at least 40 hours a week. That's $11/h higher than the min wage here.  That's $23/h higher than the disability pension I'm on (assuming 40 hours a week).

The poverty line describes the minimum amount that a household needs to fulfill basic functions in society.  It looks like a better metric than "standard of living" as it's specifically defined by the government based on census data.  Food, clothing, 2 new pairs of shoes a year per person, transportation, hot and cold running water, electricity, heating, housing, etc.  Every year they increase the standards so about 10 years ago, they added cable TV, internet, and a couple of streaming services.  2 years ago, they included cooling like air conditioning.  It also includes a landline and cell phone (with light data plan) per person.  And lately, it now includes interest rates on credit card debt.  

These standards seem to increase the year before an election for some reason.  

I suspect a number of the "standard of living" articles are shameless click-bait. Especially ones that say "live comfortably" -- what in blazes is the metric that determines that?

The one factor that is increasingly hard to control is housing expenses -- especially if you insist on living in a certain location (out of preference or necessity). Housing costs have certainly gone crazy around here -- inflating 10% per year. I think it might be instructive if those numbers could be separated out.

This is how it was probably calculated:
average yearly debt payments = 160 k
electricity/heating = 10 k
food = 4k

Mr. Money Moustache has a lot to say about this.
https://www.mrmoneymustache.com/

I think where you live is a big factor. Some cities are really expensive and some are not. What I’ve noticed is the biggest costs today (and the costs that seemed to have increase the most through the years) are housing and vehicles. If you bought both of those years ago you are probably doing fine. If you had to buy a house and a vehicle today you will be in for a shock. They have gotten expensive.

I also think a lot of people spend too much. I grew up poor and we never had a credit card or bank account. If we didn’t have the cash we didn’t buy it. We never had AC or heating. We just dealt with the cold in the winter. We ate cheap. Took the bus and walked a lot when we didn’t have money for gas. We didn’t have any forms of entertainment like cable.

For people with kids I think the issue is time. Modern day setup seems to be for both parents to work full time. That means there is no time to cook, clean, daycare, etc. All of that will all need to be hired out. That’s where you are getting these astronomical numbers in my opinion. And what is the solution for that? I don’t know. I think it is not the optimal way to raise children but I also think many don’t have a choice but for both parents to have full time careers. In a lot of cities in order to afford a mortgage anywhere both parents would need to work in order to qualify even for the cheapest house in the worst part of town.

I'm pretty sure I read a similar article, and yeah, it's bullshit. Their methodology was to basically just take the MIT Living Wage (https://livingwage.mit.edu/) and double it (for reasons?) and call that living well. I'm pretty sure the main rationale was to pick something high enough that it would get people to comment and draw viewers to their article (mission accomplished!).

I think it is impossible to define things like "cost of living" that are so dynamic. Maybe you could say, from polling, this percent of the population needs this much, etc.

I can see that figure being true for some folks that are wrapped up in all the current cultural trappings. A friend of mine had a daughter that was gifted in ballet, competed and won often but the cost of the classes started to exceed 1k a month. He had to have that tough convo with her when she was 11 and pull her out of the classes. At the time, that was as much as his mortgage.

Car payments can be 1k+ a month nowadays, 3k-4k+ mortgages plus the insurance you need for both vehicle and home. Most homes have 2 cars. County taxes in desirable areas vary widely. Commercial health insurance, credit card debt, yikes!

One the other end are folks with no mortgage and therefore get the option of not buying homeowners insurance. No car loan and get the option of paying only the state required minimum. Private health share or no medical insurance. Living somewhere with inexpensive taxes, etc. Our family of, soon to be 8, lives very comfortably (our definition of that) on less than 1/4 of that, with one income and no federal or state hand outs/benefits. Our kids are well taken care of, healthy, loved, homeschooled, eat great food stuffs we produce here and hopefully will never find themselves in the percentage that needs the amount in that article.

It has not always been this way with us and everyone is in a different place. As you come to understand these different things (poisoned food, pharma/medical complex, etc.), one thing you can do is set an example by putting the things you learn into practice. Your life is a display of what is important to you. For some, it is having and maintaining the debt to have a lot of stuff. For others, its about relationships verses stuff and then all in between.

I like these discussions very much and like hearing from other people on them and appreciate the post.

Good Morning all,

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