David Sweede, a 44-year-old accountant living in Chesapeake, Va., and his wife face significant financial pressures despite their substantial income.
The couple pays $2,900 monthly to rent a house near Sweede's parents in his hometown—a property he describes as "not that nice." Additionally, childcare for their twins costs $2,780 per month, and groceries average around $1,500 monthly, even with diligent couponing and budget-conscious shopping. These basic expenses alone total $7,180 monthly, not including transportation, healthcare, or entertainment.
In 2021, while residing in Oregon, Sweede and his wife purchased a home, viewing it as a prudent investment. However, after relocating to Virginia for employment opportunities, they opted to rent it out. The property, burdened with a $2,700 monthly mortgage, currently generates only $2,250 in rental income after property management fees—a net loss further exacerbated by a recent $6,000 home repair bill. Despite the financial setback, the couple hesitates to sell due to potential losses after accounting for real estate commissions.
Despite earning over $200,000 annually—placing them in the top 10% of U.S. household incomes—Sweede finds it "insane" that they still encounter common financial challenges. He notes, "I can’t even fathom spending money right now on a vacation. We’re definitely not doing what you would think somebody with our income could do with the money. We just can’t."
Across the U.S., many families with six-figure incomes struggle to maintain a middle-class quality of life, defined as being able to comfortably cover needs and some wants while saving for the future. The Census Bureau reported that the median income for a four-person family was $114,425 in 2022. However, escalating costs in housing, childcare, and healthcare mean that even with a middle-income, many Americans live paycheck to paycheck with little room for unplanned expenses or future planning.
SmartAsset, a financial-information site, reveals that a typical family of four in major U.S. cities needs $117,500 annually just to meet basic needs, based on 2024 estimates from the MIT Living Wage Calculator. The Bureau of Labor Statistics supports this, showing that middle-income families spent an average of $101,514 in 2022. The Economic Policy Institute (EPI) adds that the median annual expenses for similar families in the largest 100 U.S. metro areas were $104,760.
Despite definitions of the middle class typically including financial security, Zane Mokhiber, EPI’s director of data management and analysis, suggests current budget estimations might be a step below, as they do not account for savings necessary for long-term stability. A Washington Post poll reinforces this, identifying stable employment, the ability to save for the future, and comfortable retirement as key middle-class indicators—many of which are now out of reach for those in this income bracket.
In the most expensive U.S. cities, basic living costs for a family often exceed median income, forcing many to compromise on essentials or seek governmental or employer assistance. EPI and other analyses have attempted to quantify these costs to aid policymakers and employers in understanding the financial burdens faced by typical American families.
Despite improvements in the overall economy and household wealth post-COVID-19, many families, particularly those of color, report growing financial pessimism and insecurity. Federal Reserve surveys highlight a decline in financial well-being among Americans, with inflation and debt significantly affecting their ability to pay bills and save for the future.
This ongoing financial strain suggests that even high earners are not immune to living paycheck to paycheck, with many supporting family members or grappling with substantial debts. Addressing these challenges requires not just individual financial management but also broader social support and policy changes to improve economic conditions and security for middle-income Americans.
