Apr 18, 2010 0 Comment
While the economy is seeing some progress towards recovery, average Americans continue to be affected by the recession last year. In general, living standards have dropped to below the thresholds that exemplify middle-class lifestyle. Among the different metric used by economists include income, property value, home size, cars, medical expenses, college savings, vacation, and retirement savings. If you’re curious to know how you’re faring compared to other families, below is a lowdown:
Income – middle-class families (two-parent households) have a household income that range from $51,000 to $123,000. The median income is placed at $81,000 as of 2008. This figure is believed to have fallen by 5 to 7 percent due to the financial crisis. The median income of a single-parent household with two children is at $25,000
Property Value – the typical home of a two-parent American household is worth $231,000. Costs have basically more than doubled during the past decade. But while property values had steadily increased since 1990s, the trend is now reversing due to the housing bust.
Home Size – one factor that contributed to the increase in housing costs was bigger home size. The median size of a regular single-family home rose by 40% from 1979 to 2007. Right now, most houses are about 2,300 square feet. This is fast changing because families are downsizing their homes and lifestyle.
Medical Expenses – according to the study conducted by a team commissioned by Vice President Joe Biden, two-parent families spend $5,100 on average on health insurance including non-covered expenses. Healthcare costs have risen astronomically since 1990 and it may continue to rise in the near future.
Cars – the middle-class is typified by cars and mobility. Mist families spend $12,400 a year for their two sedans or other car equivalents. The recession has dampened their passion for cars so car sales dropped down by 40 percent.
College Savings – most families set aside $4,100 for the college education of their two children. Whenever possible, they save more for the college fund. In the past, financial aid accounted for the rest of the expenses. With most states facing budget problems though, school fees are bound to go up.
Vacation – another metric on the quality of life is the amount of vacation families have. A usual vacation costs around $3,000 a week for a family of four. Those who can afford a bit more spend around $6,100 for a two-week vacation.
Retirement Spending – another important consideration for middle-class families is retirement savings. In general, most people put aside $2,600 annually in preparation for retirement. This is 3.2 percent of a family’s income. It is problematic that a significant number of families don’t hit this goal due to stock market losses and other financial fluctuations.