My spouse and I have been talking about this quite a bit lately. Even with two incomes from tech employment we are watching our budget since it feels like everything is extra expensive lately. The income gains we’ve made have only allowed us to maintain versus climb to the next level of lifestyle. It makes me wonder where we will start falling behind.
Obviously we are fortunate to not live on credit cards and have our bills paid, but it feels like we worked hard to get here to be no better off than we were.
I wonder how other folks in the middle class are making ends meet especially trying to afford a home with employers forcing RTO/RTH to HCOL in many cases.
This bout of inflation is very demoralizing. In 2020-21 home prices rose by over 30% in the area I was considering (the Monterey Bay Area). Home prices have stabilized since then, but unfortunately interest rates nearly doubled, pricing me out of the market (I tried to buy in 2021 when interest rates were low, but competition was heavy and I lost out to bidding wars). I’d have to move far outside the Bay Area (like Sacramento or Fresno) to be able to purchase a home in a safe neighborhood at current valuations and interest rates, and even then Sacramento has gotten pricey since 2020 (though still a bargain compared to the Bay Area). Food prices (both dining in and at the grocery store) have risen considerably, and my rent has consistently gone up by 8% annually. Yet my salary at my non-FAANG enterprise employer hasn’t caught up with inflation; I get the customarily low merit increases. Unfortunately switching jobs is very difficult right now due to layoffs and reduced investment in tech, not to mention I like my employer and switching jobs in an attempt to make more money means giving up the nice work environment I’m in.
While I’m able to get by, I feel that I can’t get ahead. I don’t see home prices falling anytime soon; the current high home prices are fueled by a lack of inventory caused by people not wanting to give up their 3% interest mortgages, yet if interest rates fall, demand will increase, pushing up purchase prices. The only way out is building more homes, except due to NIMBYism and geographical constraints, the only affordable new homes that are being built are in the Central Valley. I’m seeing the writing on the wall; eventually I’m going to need to make some drastic changes in my career and my location if I hope to own a home instead of being a perpetual renter.
I feel like these anecdotes make more sense with numbers. What is your combined household income? > $250k?
I mean, if this is where people are feeling pinched I agree I have no idea how the middle class is surviving
I bet wherever you are living you have a household income in the top 20% locally. I bet you’re spending a lot more on “something” than the median wage earner in your metro area.
Interesting assumptions. In our case you are incorrect. We really don’t ‘spend a lot more’ on anything. Our house was purchased in 2020 under what the bank would fund us for. We are already priced out of our own neighborhood. We have one car paid off and another will be paid off this fall. Our last real vacation was in 2018 and we don’t have kids or pricey hobbies. However we have observed the cost of everyday goods to be growing more expensive every day.
You are both working in tech. Are you really saying you only make the median household income for your city?
And then not to mention there are probably literally millions of enterprise devs living in major cities across the country making much less than you are probably making in cheaper places that are living a good middle class lifestyle with 2.1 kids in the burbs, going on vacations and not struggling.
Obviously we are fortunate to not live on credit cards and have our bills paid, but it feels like we worked hard to get here to be no better off than we were.
I wonder how other folks in the middle class are making ends meet especially trying to afford a home with employers forcing RTO/RTH to HCOL in many cases.