Your family might be in more trouble than you might think financially. Things could appear good, but risk is lurking for all middle class families in 2010.
We talk in this blog and our other blog (www.stickyasset.com/blog) about the costs associated with living and how to reduce debt (the #1 reason middle class families are falling behind and, in many cases, out of the middle class) and increase regular savings and investing.
We are NOT making up huge reasons you should develop your own plan for regularly saving money.
Many people do ask why we recommend you build a plan that includes an emergency savings plan of 15 to 18 months of expenses in money market savings and certificates of deposit. This blog entry addresses that with some facts. (By the way, you don’t have to build this all at once. You CAN boost savings over time with some specific strategies).
What about some serious hard numbers? Okay. Here are some numbers everyone in your family should know. This is based upon a family of four (4) in the United States (average family of four) from 1970 to 2007).
Here is what Americans are spending MORE in the 21st century (research based upon 1970 – 2007):
# 1 = Mortgage (up 76%)
# 2 = Health Insurance (up 74%)
# 3 = Cars (2 cars; used to have 1 – 24%)
# 4 = Childcare (up 100%)
# 5 = Taxes (up 25%)
In case you want to know, Americans are spending a lot less on clothing and food than they did in 1970. Most people think the reverse of these numbers. They don’t think about how much larger the mortgage and cars cost today. However, these are stark facts about what middle class families are PAYING today.
You should always keep an eye on your money.
According to income, by the time the two (2) income family pays all of their regular monthly expenses, they have LESS money than their parents did with one (1) income (on average in 1970).
Consider this: New housing today is primarily being built for the top 20% of the general population. The people purchasing homes from 1970 until now are paying more and more for housing and the housing is more expensive per house (and not necessarily for bigger houses either). Does this strike you as crazy?
If you have read “Rich Dad, Poor Dad,” you know that they reference that middle class families purchase liabilities and think they are assets. By the way, we are NOT against home ownership, but we do believe you should select the size and cost of your home and mortgage very carefully.
*The information statistics in this blog are sourced from Elizabeth Warren and a presentation she gave on “The Coming Collapse of The Middle Class.”
If you seriously look at these numbers, you can clearly see how the middle class is under extreme stress. The expenses that have grown are less controllable than those that have gone down (clothes, food for example).
GET SERIOUS ABOUT AVOIDING POVERTY ISSUES
If you have two (2) incomes in your family, the single best thing you can do is work to reduce your expenses and lifestyle over time until you can live on one income and both save and invest the other income for success between now and retirement.
People don’t want to hear “change your lifestyle.”
People don’t want to cut back lifestyle, but for many Americans will face poverty if they don’t have a short and long-term strategy to regularly save and invest.
If you don’t have a savings plan today or don’t feel like YOU or your family can save with your income today and your bills, check out our “1% Savings Plan” in past blog entries or at http://www.MiddleClassMoney.com.
Check out our info on how to save with negotiation and coupons or coupon codes (and how to use coupons).
Don’t just accept that you can’t get ahead. Use our tips on creating savings within the restrictions of your income and your bills and spending. In many cases, you will create additional savings by opening up with your family members and brainstorming about ways to create regular savings. You will also find that focusing on saving money will….save you money.
We do have some basic things we believe and try to encourage in others. We believe that your checking account is a MONEY LAUNDERING ACCOUNT for other people’s money and you should use any excuse to push money from checking out into savings as often as possible. We believe that you should set out to create an “asset train” so that you are building something for the future – no matter how small (and an asset train pays dividends). We also believe that the only part of your money that is important (past providing the essential basics of food, shelter and clothing for your immediate family) is the money you set aside on a regular basis to reduce and eliminate debt and build emergency savings and/or invest. And you can do it.
YOU can do it. You simply must start. You must develop your own plan. You must do your own research. You must engage your immediate family members to bond together in your quest to reduce and eliminate debt, build savings and investment and TEACH YOUR KIDS how to become wealthy.
HELPING YOUR KIDS GET AHEAD
If you think I was born saving money, you are wrong. My own family didn’t believe in saving. They don’t believe in having a 401k. Our people have had “emergencies” all our lives. These emergencies always get in the way of saving money regularly, and our family is not different than millions of other good American families. I was not brought up to save and invest regularly and I have made every mistake you can think about when it comes to money. My parents thought they were shielding me from the realities of bills and worry. In fact, they were isolating me. I have had to learn from my own mistakes over time. I have had to learn the absolute hard way how to get savings on track and make it a part of your life without killing your lifestyle or allowing “it” to overwhelm you. It is my mission to share what I have learned about regularly saving with my own children and also share it with you. That’s why we have a lot of “free” (blogs like http://www.boostmywealth.wordpress.com and http://www.stickyasset.com/blog and groups on Facebook like “Coupons & Coupon Codes”) associated with our mission!
It is our goal to encourage everyone to teach our children about money, managing money, and saving regularly (and automatically. Children should receive lessons about compound interest and steady investing for a long-term future before they face the hard choices of adult life while being subjected to the consequences of the high-speed marketing culture we live in. As a parent, we are always concerned that they get a good education and go to a good college so they can make a lot of money or have a valued career path. The truth is that we could do our children the biggest favor by simply sharing with them sound saving and investing principles.
You can join our free Facebook group (or have your children do it, too) by searching in the Facebook bar on your “wall” for “Live The Lifestyle Your Family Deserves.” Click on “become a fan.” It’s free and it ties our free blogs into that group. You can get our free e-saver newsletter by signing up at http://www.StickyAsset.com/blog.
If you want to give your children the same information we are giving ours, you can purchase the only thing we sell on any of our blogs or groups. It’s called “How To Survive Any Financial Crisis” and you can get it for only $4.95 at http://www.middleclassmoney.com.
Good luck to you and your children.
Thank you for reading our blog and good luck!
Connect with us on Facebook with these free groups:
“Coupons & Coupon Codes”
“Live The Lifestyle Your Family Deserves”
All on Facebook – join. It’s free.