Many people from states with moderate housing prices have a very hard time understanding how a family earning $100,000 a year is having a challenging time staying in the middle class ranks. The idea of a six-figure income certainly doesn’t connote the same wealthy status as it did a decade ago. But where is all the money going then? Now that we are quickly approaching the great Wal-Mart voucher stimulus revolution and will see our accounts increase by $600 to $2,400 depending on our family situation, once we look at the cost of monthly items we realize that this money is a drop in the bucket for most Americans. In fact, there is so much debt out there that many are now saying they’ll use the money to pay off current debt or save; certainly not the intention of what the current government has in mind. They would love nothing more if you went and blew your stimulus check on a new laptop or stove and one month later, are back in the same spot. This is the problem with deficit spending on many levels. At a certain point debt will crush an economy if it is not handled properly. We have done an abysmal job managing debt over the past few decades and now we are seeing the after effects of this. Today I want to put out a hypothetical budget for a family with 2 kids earning $100,000 a year and show you how easily it is to go into debt. This data is conservative and I will talk about a few of major line items later in the article. So now I present to you going broke on $100,000 a year:
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