Who Is Middle Class In America?

The funny thing is that most of us probably consider ourselves middle class. It is an American concept that is not that easy to define.  But a lot of people want to know what is really considered middle class in American, so we thought we would try to define it somehow.

How Much Money Do Middle Class People Make?

The type of people who study such things, like sociologists and economists, have different financial standards. Even recently, it has been defined as anything from an income of $25,000 to $100,000 a year. And yet, I would imagine that most families who have to subsist on $25K a year probably feel poor most of the time. In fact, I know families who make more than $100K a year who feel budget strain.

Is There A Middle Class Living Standard?

If we take some mid-range salary, like $60,000, we would have to look at family size, location, and other factors. For example, a single person in a small town may have a fairly high standard of living on that sixty thousand dollars a year. If that same amount had to support a family in an urban environment, it may not go very far towards luxuries.

It is not always easy to decide who is midde class by their living standards. We have all heard of the millionaire next door by now. Many people with higher incomes do not choose to spend it. On the other hand, many Americans live well beyond their means.

Is There A Middle Class Education Level?

The bare minimum standard seems to be a high school education plus, perhaps, some training. A college education seems to place an individual more firmly in the middle class. Of course, we can all think of exceptions to this too. Some individuals drop out of high school and start a business, and there are lots of stories about self-made millionaires who dropped out of college. On the other hand, we have known college educated people who just never made it economically, and it would be hard to define these people as middle class.

The Lower, Middle, and Upper Middle Class

To make more sense, many categorize the midle class into 3 distinct groups. Professionals and highly educated people may tend towards the upper ranges, while skilled workers may tend towards the lower ranges.

What Do You Consider Middle Class?

We’d love to know what you think! Register for free and comment!

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Finding Cheap Term Life with Value!

If you watch TV at all, you must have seen several advertisements for low cost term life insurance policies. They usually show a happy an attractive family. The husband and wife talk about how they want to provide for their family’s security with life insurance. Then they go on to talk about the fabulous deal they got on a term life policy.

Those rates always sound really great, but are they the real term life insurance rates you would get? And if you did get them, would those policies be the best ones?

Note - Get competitive term life insurance rates here.

Are you super select?When I worked as a life agent, I would try to give realistic quotes based upon what I knew about my potential clients. Many times, they would tell me they had an internet quote for some sort of super-preferred rate class that was a bit lower The thing is, I knew these people would never qualify for that rate class, and I tried to give them a realistic quote so they would not be disappointed later.

Term life is an affordable way to get a lot of coverage for most people. Your own rate will be what insurers offer you, and not what they offer some fictional couple on TV!

Some Things To Consider About Cheap Term Life!

Look, we frugal people like to save money. But we also want value for our money. So beyond making sure that the premium quotes are realistic, here are some other things to consider about any policy you may consider.

Return of Premium (ROP) Term Life – It costs a bit more, but refunds all the premiums if you survive to the end of the policy. For some people, this is a great way to get a nice check back at the end of the term. Read more about return of premium (ROP) life insurance here.

Option To Convert To Whole Life – A term policy may seem like the best option today, when you are younger and need a larger face value to cover your mortgage and kid’s education. But nobody knows what will happen in 20 or 30 years. A policy with an option to convert with no medical underwriting can be handy later. Does the term policy you are considering include this?

Financial Stability – Most insurance is well protected by state regulatory bodies. Still, a policy from one of the top life insurance companies can provide additional security.

Length of The Policy – Make sure you are comparing the same term lengths when you compare. An insurer will, all other things being equal, charge more for 30 year policies than they will for 10 year policies. They are taking a bigger risk, and that costs more.

Insurers Are Different! .

Note that you will find premium differences between top insurers for the same policy. While you should ask questions before you buy, I encourage you to shop around. You can compare multiple polies in your local area, and find contact information for qualified local agents who are eager to work for your business here - Fast Term Life Insurance Quotes!

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How To Afford Health Care

Bear with me. This article is a little complex. I do have a lot of experience with this topic, but since my audience is diverse, I have to answer the question for different types of people. I will assume that most people who are reading this are from the millions of Americans who lack group medical benefits. Some of you may have a group health plan at work, and that is usually your best option. However, I do understand that these days, that some employers expect the employees to kick in a large share of that too.

Millions more of you may work at a company that does not offer group major medical, be self employed, or laid off. Some of you may already suffer from a pre-existing health condition that makes it hard to get private insurance, or that even makes it hard to find another job!

Individual Health Insurance

You should not assume, right off the bat, that you cannot afford a private medical plan. These days, there are so many options that you may find one that covers you in case of a serious accident or illness at a budget friendly price.  If you just lack group health, and want to cover yourself or your family, start with individual health insurance quotes. The online system is simple and quick, and it will give you a variety of alternatives in your area.

Be Wary of Health Discount Plans

There are discount health plans being marketed that are not health insurance at all, but discount cards. They may be very inexpensive, but since they are not actually health insurance, they are also not that useful.  If you are approached with an offer like this, be sure to ask and get an asnwer to your questions about what the plan actually is! If you are still not sure, you an always check with your state insurance department.

High Risk Health Plans for Declines

Every state in the US has a high risk health plan, sometimes called a high risk health pool. These are for people with pre-existing conditions who do not have group health, and who have been declined (or would be declined)  for coverage in the past.  The new federal high risk health pools are part of health reform. You can find out about how this is being integrated into your state by checking your state high risk health plan as well. A simple internet search for “YOUR STATE” high risk health plan – should give you the answers you need. You can also ask a good health insurance agent because they should know how things work in your local area.

Unemployment or Low Income Alternatives For Health Insurance

COBRA – If you are unemployed, you may have a COBRA health insurance extension. This law extends your benefits for several months. But you will have to pay the whole premium without an employer contribution. Also, not everybody qualifies. Look here for COBRA Alternatives. and Unemployment Health Insurance.

Medicaid – This is the federal/state health insurance for low income people with very few assets. Again, search for information in your state.

CHIPS - The Children’s Health Insurance Program (CHIPS) covers moderate to low income children. It also covers pregnant women! Search for information on the plan in your state.

Local Resouces – The PPARX.org website is a wonderful resource for peope who are having trouble paying for prescriptions and medical care. There is a handy zip code search where you an find low cost clinics and other types of medical care in your area. You can also find foundations that award grants to people with specific diseases.

Your county hospital system may also have a health plan with a sliding scale.

Seniors Or Disabled People On Medicare

Medicare is the federal health insurance plan for seniors and disabled people. It does not cover everything, though, and many covered people supplement it with other plans. This whole area is as complex as any other, but look at this simple way to Compare Medicare Health Plans.  Some of these plans have premiums because they are from private companies. Other have low, or no, additional cost beyond the Part B premium.

If You Do Not Have Health Insurance….

If you lack health insurance, it is much better to explore your options now, while you are healthy! There are private plans, and there is some help from county, state, and federal programs. Health reform will bring more options but we are still waiting for it to be fully implemented. I believe I have given you plenty of resources so you can figure out some alternatives.

We welcome and comments or suggestions in the comments.

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Saving Money Quotes

The next time you need some inspiration to pack away your credit cards, or just a good line to use on your kids, you can consult these famous quotes on being frugal!

Ben Franklin was pretty well known for his thouughts on the subject.

• A penny saved is a penny earned
• If you would be wealthy, think of saving as well as getting -

I like the last one, and my own dad always said, “It’s not how much you make. It’s how much you save.” This is similar advice, and as a teen, of course, it always annoyed me. Now I just wish I had paid more attention earlier. :)

Sir Henry Taylor also had some words on  the subect.

• The art of living easily as to money is to pitch your scale of living one degree below your means.

That should strike a chord with many people, especially these days.

Samuel Johnson, the English poet and critic had some very sage advice too.

• Without frugality none can be rich. With it, few would be poor.

So you have a favorite Frugal Living Quotes?

Feel free to register for free and put it in the comments. We do moderate comments to keep out SP#M, but we love to publish your thoughts!

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House and Car Insurance

One of the best tips ever for finding cheaper car insurance and cheaper homeowners insurance is very simple! Many insurers know they save money on marketing and administration by getting you to give them all of their business. They are ready and willing to pass along substantial discounts with auto home insurance discounts!

I really did not know this, so I used a so-called discount auto insurance company for my cars and drivers. I used another insurer for my home. One day I decided I was just paying to much for insurance. My total bill dropped by almost $200 a month (yes, month!) when I found a larger company who would offer me a great price break for getting all of my business.

In my opinion, saving over two grand a year made a little bit of inconvenience very attractive!

See if you can save some money too: Compare Car Insurance

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Is Debt OK?

We talk a lot about paying off debt. We really hate high credit card balances because they tend to be for things that are not really tangible or long lasting, and those rates can really run out of control. There has been a lot of talk about the mortgage crisis, but I am sure that credit cards have gotten a lot more people in financial trouble with little to show for their expenses.

Emergency Credit

Of course, it is better to be able to pay for an emergency bill with your savings. But we, of all people, understand that sometimes troubles just seem to pile up. It is not always possible to choose between filling a cavity and getting your car repaired. Your dental problems could just become worse if you neglect the cavity, but you may need your car to get to work. So sometimes, the cost of debt will be less than the cost of waiting for a service. In that case, you should probably just go ahead and charge it.

Long Term Goals

Most experts advise us that it is ok to borrow for a long term goal.

An affordable home mortgage is one example of a loan that is usually acceptable. We all need a place to live, and you should, at least, have a house to show for your loan! Besides, we also all have to live somewhere. You will probably have to pay rent or pay a mortgage.

Borrowing for an education, that can help you get a better job and more productive life may be another example. These days, we hear a lot of stories about graduates who got in deep trouble because of loans, so you should really consider all of your options to keep debt as low as possible. It is becoming a lot more attractive to spend, at least, a few years in a local community college if university tuition is out of sight.

Basic transportion may also qualify as an acceptable loan. If you have a Kia budget, don’t go for the new Lexus though. Auto really devalue, and people save a lot of money by purchasing the least amount of acceptable transportation.

What does not qualify as an emergency?

A vacation does not qualify, and neither does a restaurant meal. These thing can really add up, and you can find yourself making payments for years on vacations or nights out you barely remember.  If your budget is tight, it may be time to rediscover the pleasure of a picnic or day trips. Hotels are nice, but if Aunt Marge doesn’t mind, pack into her place for your visit.  If you are short on funds for the grocery store, why not try cleaning out the pantry and using up all those cans of chile you bought a few weeks ago? Maybe next time, that emergency savings account will be funded.  

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Office Lunches are a Big Money Leak

I know tha when I worked in an office that was far from home, enjoying lunch out was something I really looked forward to. I needed that break from my cubicle or office, and it was also nice to get together with coworkers to bond a little bit. But those lunches out got expensive. That $5 a day started turning into $10 a day or more. So when my budget got tight, it was hard to justify spending $200 a month on lunch time restaurant meals.

Office Lunch Clubs

So here’s a great alternative to brown bagging that is popping up all over. Most work areas do have a lunch area with a fridge and microwave. So lunch clubs are forming. Each member is assigned days to bring lunch. That day, they provide the lunch for the other group members.

For example, if there are 5 members of your group, you can simply assign each person a M-F day. If you have 10 members, you might either assign an every-other week schedule, or you might assign one person to bring paper goods and drinks, while the other person brings food.

This does not have to be complicated or expensive or difficult, and it can actually be a lot of fun. Coworkers can enjoy eating together, but can save a lot of money. Instead of spending $10 a day on lunch, you could spend $10 a week on a nice lasagna and salad. If a group member is cooking impaired, they could still pick up KFC grilled chicken buckets with sides for about $20, which is still a lot cheaper than eating out every day!

If you are a group manager, or if you own a small business, you may actually want to encourage this habit. When workers stay on site, they are more likely to keep lunches fairly short because they will not have to factor in travel time. Some savvy business owners even provide the lunch once a week, and some do it every day! This benefit can actually benefit a business quite a bit!

 Others may offer to underwrite the cost of drinks and paper goods. There are lots of great ways to use this idea to advantage, and it will probably be appreciated by your workers!

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One great idea for a low cost business start up, that actually does well during tough economic times, is a thrift shop. There is a famous article and ebook on tgtbt.com about a woman who started her thrift shop for the $900 she had left in her bank account after she lost her job. And there was a happy ending because she had her business in the black within 6 weeks!

This business was started quite a few years ago, and $900 does not go as far as it used to go. But there are ways to start this type of consignment or resale shop for every little money, and there are some ways to do it for even less than a grand.

Finding Space for Your Thrift Shop

Ok, rent and a rental security deposit may eat up a lot of your seed money.  It will be best, of course, to place your business where you have plenty of exposure and parking. However, you may save a lot by getting a location just a bit off the main roads, and then making sure people can find it with your promotion.  Word of mouth advertising, online social networking, door hangers, and flyers can give you a lot of attention for a little bit of money.

You Save On Inventory

If you plan to start a thrift store, you inventory should cost little or nothing. Consignment stores do not have to pay for items until they are sold. Resale stores should only pay a fraction of what they expect to gain. Before you purchase any thrift store items, make sure you visit some similar shops to get a really good idea of what you can expect to sell items for. 

A Thrift Shop with No Shop?

You can start out by selling online to save up enough for rent.  You must pay for your advertisement on online auctions like EBay, but they allow you to “pay as you go” so you can get a feel for your business. Even if you do have a brick and mortar store, online sales can complement your business.

Consider A Niche

It takes awhile to learn any business, even if you are reselling other people’s used things. In addition, you may have noticed other competing thrift stores in your area. One tactic is to specialize.  What type of items do you know well? Upscale, brand name only resale shops seem to do well in any economy.  You could also consider a resale shop for baby and toddler items. These things tend to get purchased, used for awhile, and then stored in the garage.  And when I think of thrift shops, I tend to think of clothes. But there is a market for gently used furniture, tools, electronics, or applicances too.

Do you have any ideas about frugal startup businesses? You can register for free and comment.

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Is there anybody you know who doesn’t want to save more money? Everybody I talk to feels the pressure from the recent economic downturn. The banks are paying a lot less interest on our savings accounts and CDs while they are charging a lot more for our credit card debt. Many of us have watched our retirement account values sink while our jobs and businesses have become less stable. So what we need are some way to reduce our monthly bills so we can save money every month.

Our List of Ways to Save Money This Month (that you probably aren’t doing).

Car Insurance: This is one bill that most of us have to pay so it should be a logical place to start saving money. If you have not compared insurance quotes for awhile, you probably can save money on insurance by doing some competitive shopping. Sure, most of us need auto policies, but it is also a very competitive business.

Gym Memberships: Are you even using that fancy gym membership you purchased for your New Year’s resolution. Maybe now that the weather is starting to get nicer, in the summer, you would be better off taking walks and pulling your bike out of the garage.

I have a friend who found an exercise bike at a garage sale for $15 which has been a much more conveient way to get her heart rate up than dressing and driving to the gym anyway!

Think about how much it costs you to join a gym in transportation costs, gym clothes, and monthly dues. You could use thto sat money to start a spring garden, which would give you exercise and pay you back in fresh produce.

Orgainze Your Pantry Before Shopping: I cannot tell you how many times I used to go the grocery store to purchase items I already had. My problem has always been clutter. Take a few hours to clean out your pantry, and go ahead and give away or toss items you aren’t using. But this way, instead of purchasing your third jar of of salsa or pickles, you will actually be able to use the ones you already have before they expire.

Plan Grocery Shopping: I am not a big fan of detailed shopping lists. I think it is better to list some staples you always need, like eggs or milk, and then make a general outline of the meals you need to prepare. That way you can take advantage of sales and seasonal produce so you can really save money on groceries.  Produce, in season, will be fresher and taste better, and it will be cheaper! Besides, I think it is more fun to go grocery shopping without a very detailed plan, but just a general idea of what I need.  

If you are a coupon shopper, make sure you are actually buying things you use, and not just buying something because you have a coupon for it. That is a great way to clutter your pantry and waste money. 

Party At Home: Instead of going out for dinner and a movie, maybe plan this at home sometimes. If you are going out with friends, 4 couples could spend a couple of hundred dollars – or more – on restaurant meals and movie tickets.  You could prepare a feast at home and rent a movie for a quarter of this price. You could turn your special night in into a potluck, or just have friends take turns hosting.

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Who doesn’t want to stretch their paycheck these days? And since most of us need to buy car insurance, that bill seems like a popular place to start. You probably need auto insurance, but you do not need to overpay for this important coverage. On the other hand, be wary of saving a few bucks by cutting your coverage. This can cause more problems in the long run.

Shop Around! You really can save money on car insurance by shopping around! Do not assume that all insurers are the same, or that your old company is rewarding you for loyalty either.  Another company may offer better discounts for things you do to reduce risks.

Some examples of things that can earn auto insurance discounts  are safety features, anti-theft devices, and taking defensive driving classes.  I know that I beefited from this when I had to add a new driver to my policy. My old insurer almost tripled my rates at that time, but I found rates that were $200 less a month by shopping around for the right company for my own unique situation! My new company is also a nationally known, top insurer. They were just a better choice for me!

Be Wary of Cutting Coverage: Some may advise you to cut out comprehensive coverage when you pay off your car loan. I am not so sure that is always good advice. You may not owe any more money to a bank or finance company for your vehicle, but you will still have to replace it! 

Consider Customer Service:  Again, saving a few dollars on your your monthly premium will not help if you don’t have a great insurer at your back. You can check insurance company ratings oline, and you can even ask your friends and neighbors what they think of their own company.

Do you have any tips for getting quality coverage and buying car insurnce the frugal way? We’d love to hear them.

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