The Commerce Department reported last week that the personal savings rate fell near to a record low in October, when American households saved a meager two-tenths of 1 percent of their disposable income. The rate implies that a family with take-home pay of $40,000 saves on average $1.50 a week.
The average American household now spends 13 percent of its after-tax income to pay debts, the highest percentage since 1986. Much of it goes to pay home mortgages and car loans, but the average American household is also carrying more than $8,000 in credit card debt.
While some blame materialist consumers armed with a credit card, Elizabeth Warren, a Harvard Law School professor, points to environmental constraints.
Today's middle-class families with two working parents, she said, have far less financial leeway than a single-income middle-class family of 30 years ago. What Ms. Warren classifies as "fixed costs" - mortgage, child care, health insurance, car and taxes - take up 75 percent of the income of today's two-income family. By contrast, the those costs represented about half of a middle-class family's income in the early 1970's.
I'm above average :)
I make about $36k a year. I owe $11k on my car, and probably about $13k in credit card debt. I pay close to $1200 a month (or about 1/3rd my income) to these debts.
Posted by: Mal Snay | December 07, 2004 at 10:40 PM
When I went to college, at Sonoma State in Rohnert Park CA, the new subdivision near the college was selling houses for 25000, which was about 3 times the then income of an entry level cop or teacher (I went to college a LONG time ago...). Now those same houses are selling for around 350000, and that is seven times the income of an entry level cop or teacher - and three or three and a half times the income of a married pair of cops/teachers.
Now that I think of it, I am going to move this comment from 'middle class debt' to 'home alone America' - with current housing prices, it's not going to happen that women stay out of the work force, it doesn't matter whether it's desirable or not that both parents work, we just have to try and manage it as well as we can.
Posted by: dave s | December 08, 2004 at 06:42 AM
326145: Hey, does anyone know where I can find a list of gas stations with low prices in my area?
Posted by: Debra Riley | October 17, 2005 at 04:11 PM
This is cool, you have to try it. I guessed 87823, and this game guessed it! See it here - http://www.funbrain.com/guess
Posted by: Allison Trump | October 27, 2005 at 08:09 PM