In recent years, the middle class is no longer what it used to be. What was once manageable in terms of daily expenses a decade ago now feels increasingly burdensome. Many find themselves meticulously budgeting every month just to maintain the lifestyle that was considered routine ten years ago, struggling to make ends meet.
Previously, being part of the middle class meant a sense of security – not wealthy, but stable. It meant that through hard work and sensible decisions, one could afford a decent house, raise children without worries, retire at a reasonable age, and handle life’s inevitable challenges.
But today, soaring housing and living costs in major global cities, coupled with increasing childcare expenses and travel costs, have quietly eroded the once comfortable middle-class lifestyle.
According to a lifestyle magazine Vegoutmag, here are eight things that the middle class could easily handle a decade ago, but now feel financially stressful for today’s middle class.
Ten years ago, with a stable job like teaching, accounting, or marketing, one could save up for a down payment and buy a regular house within a reasonable commute to work. While it may have taken a few years, it was achievable.
However, now many engineers working in bustling metropolises or Silicon Valley, despite earning above the median income, have to move an hour away from work to afford a house. Some Google engineers, unable to buy a home and cope with high rents, even live in their cars.
In most major cities, the median housing prices have risen at a rate two to three times faster than median incomes. It now takes 8 to 10 times, or even more, the annual salary to buy a house that used to be within reach at 3 to 4 times the income a decade ago.
A decade ago, middle-class families could afford vacations – perhaps not overseas, but a week at the beach or visiting relatives out of state was commonplace.
By 2015, international travel was accessible to the average middle-income individuals. Budget airlines made traveling to Asia and Europe possible. A family of four could go to Bali or Thailand for just a few thousand dollars.
Yet today, many families face difficult choices: repair the car or take the kids on a trip? Replace an old laptop or book a flight?
Airfare prices are skyrocketing, accommodation costs are soaring, and crucially, the economic cushion that middle-class families once had, the flexibility in budgeting, is dwindling.
Travel has become a sacrifice that requires cutbacks in other areas, contrasting sharply with the situation of the middle class ten years ago.
This is not about debating whether parents should work, but questioning if they truly have a choice.
A decade ago, many middle-class families could rely on a full-time and part-time income to make ends meet, especially with young children. One parent might work three days a week or work from home a few days. Despite tight finances, it was manageable.
Now, childcare costs are skyrocketing. But more fundamentally, housing, healthcare, and education expenses mean that apart from the truly affluent, single-income families are finding it increasingly difficult to sustain themselves.
Dual full-time employment for parents has shifted from a choice to an economic necessity, fundamentally altering the family dynamic, parents’ time spent with children, and the children’s growth patterns.
There are significant differences in healthcare and insurance systems worldwide. Even in places with public healthcare, the middle class is turning to private insurance to avoid long waits. However, the premium growth rate for private health insurance far exceeds wage growth.
Previously affordable monthly expenses have now become daunting for many families. Consequently, they forgo insurance and hope nothing catastrophic happens.
Middle class once meant not worrying about affording a doctor’s visit or if a referral to a specialist recommended by a general practitioner would bankrupt them. That sense of security has faded.
A decade ago, middle-class workers in their thirties and forties could check their retirement savings accounts and see a path to retiring at 65, with disciplined savings perhaps even retire at 60.
But now goals have shifted. Housing costs have consumed funds that should have been for retirement savings. Stagnant wages mean less disposable income. The cost of living in retirement is increasing, while expected returns become more uncertain.
A reasonable retirement age was once a promise of the middle class, now it has become a luxury.
Research shows that in the past four decades, the proportion of workers aged 80 and over among all Americans aged 80 and over has increased. In 1980, only 2.9% of people aged 80 and over were in the workforce, by 2019, this had risen to nearly 4%, and by 2023, it had increased to 4.2%.
Education was meant to be the ladder for the next generation to reach the middle class, but the explosive cost growth over the past decade has been widely recognized.
In 2015, many middle-class parents could realistically plan to support their children through college. While their children might incur some debt, parents could make substantial contributions, whether by directly paying tuition or providing free accommodation.
Today, even upper-middle-class parents struggle to ease the burden of their children’s education without compromising their own retirement security. The cost of education is staggering.
Compared to housing and education, food may seem trivial, but is it really?
A decade ago, a middle-class family could go to the supermarket and buy quality food, including fresh produce, good meat, and some organic products without meticulously calculating every penny. While they sought out bargains and avoided the priciest brands, they didn’t try to calculate every item’s cost or return items because of the total being too high.
Now, food inflation is alarming. In the past, the middle class didn’t have to worry about basic living expenses. Today’s middle class needs to budget even for essential groceries, carefully making choices and sacrifices.
A decade ago, financial advice included saving an emergency fund equivalent to 3-6 months of expenses. While challenging for middle-class families, it was not unattainable. Over a few years, they could slowly build a buffer.
Today, with less monthly surplus, accumulating this emergency fund has become increasingly difficult, especially with higher emergency expenses. Car repairs, medical procedures, water heater breakdowns – what used to be small problems to handle now could turn into financial crises.
The emergency fund is a fundamental indicator of financial security, which now has become unaffordable for those who should reasonably have financial stability.