People have a lot of opinions about money.
In our "Money Mic" series, we hand over the podium to someone with a strong opinion on a financial topic. These are their views, not ours, but we welcome your responses.
Today, LearnVest reader Kimberlee Stiens explains what she thinks it means to actually be poor--and why most of us aren't.
I am sick of hearing about the trials and tribulations of the middle class.
Politicians constantly talk about strengthening the middle class (which is shrinking) or accuse their opponents of waging war on it, when I think the middle class, on the whole, has little cause to complain.
I've seen women here on LearnVest and in my daily life complain about making $40,000 a year, saying that's not enough to support themselves (to which I would add: "in the lifestyle to which they've become accustomed").
The poverty line in America is $22,350 a year ... for a family of four. In 2010, a full 15% of Americans lived below this threshold. Most American adults will live below that threshold for at least one year of their lives.
That's why I think we need to change the way we talk about being "poor" or "middle class."
I Know Because I Grew Up Poor
I became middle class for the first time ever only about a year ago. I grew up fairly poor, my father being generally unable to keep a job and my mother not having legal standing to work in this country. (Complicated story, but she's Canadian and only recently got U.S. residency--I think she always intended to go back there.) I graduated college with some $60,000 in student loans and a temporary internship position for a congressional campaign paying $250 a week. At least it came with free housing.
I graduated with a degree in political science and wasn't sure what I wanted to do, but was mostly looking for admin office jobs. When I started college, I harbored the same illusions as the rest of my graduating class: We were freshmen in 2004, when almost all undergrads could count on getting a job after graduation, and we finished college in the middle of the Great Recession.
After the congressional campaign, I worked at a fast food restaurant for two years while constantly applying for office jobs. I made no more than $10 an hour, with no benefits. So when I managed to get an internship in Washington, D.C. working for the Marijuana Policy Project, I jumped on it. I worked for $9 an hour until I was promoted to my first full-time, salaried position as a membership assistant, at $35,000 a year, with paid vacation and health benefits.
Finally, at age 25, I was middle class, but I didn't know it yet.
It's Our Choices That Define Us
I work at a non-profit, a sector where salaries are notoriously "low." Yet most of my peers here make at least $30,000 yearly. We all have health care and other benefits.
After I started my job, I realized that, for the first time, my life was no longer about what I could and couldn't afford. It was about how I chose to spend my money. I could no longer blame the externalities of a cruel world for keeping me down.
Now I'm the office manager and executive assistant to our executive director at the same organization where I had my first internship. I make $39,000 a year (I negotiated my raise!), and live in Washington, DC, one of the most expensive housing markets in the country. I'm paying off my student loans, and I'm doing fine.
Given that I encounter more than one panhandler on my walk to work each day, it seems delusional that anyone complains that $35,000 a year makes them "poor." I live in D.C. and work on the Hill, where there's a culture of made-up poverty. Many staffers work long hours and live in shared housing, but they all tend to make salaries of at least $25,000 with health benefits (and they have plenty of opportunity to move up after they put in their time!). Everyone complains about being poor, but then goes out to drinks each week.
It's not that they have it easy. They just don't understand how much easier they have it than some.
Try Another Perspective
I'm not trying to diminish anyone's experience. I know that dipping below a standard of living you've always enjoyed will feel pretty crappy. My point is that, comparatively speaking, it's not actually all that crappy. Many middle class people, particularly those who have never really been poor, don't seem to see that there's a whole other side to the economy that they never experience, like this writer who struggles to pay for friends' weddings. I've met people who have spent 20 years in food service, with no health care, no bonuses and usually kids to support.
There are middle class people who say they just can't live in D.C. or New York City on $40,000 a year, but there are also people in those same places living on minimum wage. Take a look at the invisible people around you who make your life tick--your cleaners, the person making your drinks, your interns--and imagine how they make ends meet.
It's a choice that you make to feel disadvantaged. If you make $33,000 a year, the truth is, you are actually in the top 50% of wage-earners.
Everyone can, and should, do a little more to manage their finances better. And while studies may show that we don't feel truly comfortable or secure in our finances until we reach between $50,000 and $75,000 a year, it's a bit dramatic for people to feel anything other than lucky when depositing their salaried paychecks.
Kim lives in Washington, DC where she works as an office manager for a medium-sized non-profit. She blogs at Business for Good, not Evil.
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Rent: $850/mo (utilities included) Normandie Apartments - Studio
Transportation: $100/mo (Metro bus pass is $16/7-day pass) plus a little extra for cabs occasionally
Food: $225/mo (Avg 1 person food budget)
Cable/Internet: $70 (Comcast) You don't really need this, but its fun to have.
Phone: $50 (ATT GoPhone with unlimited talk and text)
Misc: $100 (For the little things along the way)
Total: $1395
A $30,000 job will net a single person $1613 which is after taxes (state. local, fed) and health care
That leaves another $218 unaccounted for at the end of the month. Even putting away just $100 of that in savings would provide a cushion for a bad day. It is entirely possible to live decent in DC for $30K.
Many people making $30k don't get those benefits thrown in for free and since in the US health care insurance alone is easily $5k or more (especially when you have kids), much more than in other developed countries, that is not something to be glossed over. Your student debt would also be considered incredibly high in other countries. These factors do cause an American making $30k to be a lot less secure in his/her middle class status than a person in another developed country making $30k, then there's the low value of the dollar...
One of the things that annoys me about some people, are the complaints along this line:
"Ugh, I'm so poor! I have to either wait for Christmas to get that game/jacket/whatever expensive item. I don't want to spend my gift-money on that!"
Yeah, no... That's not what poor is.
Try wondering if you can afford rent to your tiny, dingy apartment, or if there'll be money for food at the end of the month. Stealing toilet paper at gas stations.
And that's not even those worst off. There are homeless people out there in our wealthy nations too.
Yet, one sees more misery and less happiness here in this wealthy land than one does in the Third World villages.
No, one does not.
Seriously? You might want to support you claims.
It's not envy as much as it's "I want to be there too. How do I get there?" There are people like myself who did what they were "supposed" to do -- get a job at 16, work hard, go to college, and graduate. Work whenever you are asked to, take initiative, volunteer for projects, work when you're sick, work until the last minute (as I did with my pregnancies) and come back after only 6-8 wks (when doctor OK's it). All for a $0.25 per year raise.
There's got to be something I'm missing.
What is life without a little bit of excess?