He lives in a city where the average family brings in $44,000, and he's making $60,000. So why is he barely scraping by?
Editor’s note: This is part of a series by Bob Sullivan called The Restless Project.
John Southerland knows where every penny goes. In fact, after reading other Restless Project budgets, he sent me a spreadsheet detailing all of his family’s expenses for the past 10 years. And his perspective is simple: For his family, a middle-class income doesn’t support a middle-class way of life.
“I have a family of five. We are trying to live what I consider a middle-class lifestyle. The Recession really hurt us, and I have been trying to climb back ever since,” he wrote. “We are currently making about $60K per year. Realistically, there is not a huge difference between 2, 3 or 4 or more children. The major expenses (house, commute, utilities) don’t change THAT much as you achieve some economies of scale. … We have no debt, other than our mortgage. We’re driving two vehicles that both are over 10 years old and have 200K plus miles. No money for savings, no money to buy a new(er) car, no money for unexpected repairs or illnesses.”
Southerland and his family live in Jacksonville, Fla., where homes are cheap: a median-priced home in nearby Duval County costs $110,000; but he lives just over the border in Saint Johns County, where median prices are around $234,000. His house payment is just a touch more than $1,000, quite reasonable. Still, costs add up quickly, so even though his household income is considerably higher than the local median — $44,000 — he still feels like he’s falling behind.
Despite that, the Southerlands maintain a high standard for generosity, as do many Americans who have submitted their budgets to me, donating $500 or more per month through tithing.
Here is Southerland’s monthly budget
Here’s July, when the Southerlands made it just under the wire, even though their balance sheet includes $0 medical and school expenses. “Dates” cost only $24.22. Their take-home pay was $3,783. They spent $3,731.
Mortgage — $1,074.56
Electric — $198.03
Maintenance — $61.22
Tithing — $518.27
Phone — $37.47
Internet — $42.13
Cell phone — $89.60
Life insurance — $97.35
Medical — $0.00
Car insurance — $110.40
Fuel — $496.92
Car maintenance — $35.96
Groceries — $525.47
Eating out — $149.76
Gifts — $0.00
Dates — $24.22
Family outings — $0.00
Travel — $132.05
School — $0.00
Other — $138.52
Total — $3,731.93
The $51 in-the-black monthly result is also skewed because the family pays property taxes of around $6,000 annually. Spread that evenly into 12 months, and they are roughly $500 in the red for July. Southerland dips into his 401(k) to plug the budget gap.
“On average, we’re spending $665.22 per month more than we’re bringing home,” he said. “So, assuming no major catastrophes, we will use $8,000 — half my remaining 401(k) — this year. Next year we project to lose only half that – again, assuming no major catastrophes. We hope to break even in 2016. I think it boils down to the type of lifestyle you are trying to live. But $60,000 doesn’t cut it for my family.”
He used to earn more as a general contractor building residences and small commercial buildings, but the Great Recession forced him to change careers. He now works for a railroad engineering and construction firm. The change forced him to take a step back in income, one he hopes is temporary.
“If I get in this industry to where I was in Residential/Light Commercial Construction, I will make significantly more than I did before,” he said. But for now, he watches every penny and hopes there’s some left over at the end of the month.
More from Bob Sullivan:
- The Restless Project: This Is Why You Can’t Sleep at Night
- Do You Feel Stuck? New Book Offers 8 Ways to Break Free
- Big Data, Kill Switches, Facebook Stalking — Debt Collection Goes High-Tech