Are you REALLY a middle income household?

[AnyDream]

Simply put, it's dividing your disposable income by the number of people in the house (given a weighted value).

But what if you have 2 adults contributing equally? They should both have a value of 1.0

No, because this is a measure of how much income you theoretically need to live on. So 2 adults can theoretically live on 1.5 times the the resources that a single person can live on. Because there are efficiencies from sharing resources in the household.

[JLeigh29]

Interesting, thanks Marydean.

I so agree RainbowBrite! It's all about how you choose to spend your money and what you value. A few friends were talking recently and I was amazed that some of them spend $100-$200 a week on alcohol and ciggies (and that's with only their partners drinking and smoking). And a couple admitted to spending upwards of $50 a week on chips, chocolate, lollies and soft drinks. Add in the expensive mobile phones, DVD's/music etc and it's no wonder they just scrape by. I guess if we spent that much a week on all that stuff we wouldn't be able to afford our monthly takeaway or meal out, or our couple of week-long holidays.

[Glamourcide]

Eep, our family is in between the first and second quintiles! We live in a mining boom town so costs are just going up and up, and DH works on the fringes of industry (he's in a manual labouring job that relies on the industry that's around, but not where the money is, itms? He's on approximately half the income that friends who are working for the big companies earn) so there are times when we definitely feel the pinch, as our income stays static while living costs and 'luxury' items just keep getting more expensive. However, we are lucky to own a house (on 'half a mortgage' as we inherited) and two cars, and we're both smokers, I'm a borderline shopping addict, there are many areas in which we could be making our money work a lot better for us. That being said, we live quite comfortably on what we have and it doesn't affect us much to be considered 'low-income' because we are able to live within our means and save a bit each week
Interesting info, thanks for posting! Was a bit of a strain on my non-math-oriented brain, but it's interesting to see where we are compared to other households We're not doing too badly for being so far from 'middle income'!

[AnyDream]

I am below the 1st quintile
So I supposed we are classed very low income but on saying that we do alright, eat well, clothes, nice rented house, electronics ect.
It is hard at times, but what is on paper does not always accurately represent how you live.
We all live to our means.

That is so true, and in fact the level of income is less closely tied to experiences of financial hardship than you would imagine. I remember reading something a few months ago where they excluded the lowest income earners because it would skew the results. Either because some of those very low income earners don't need an "income" because they are living on accumulated wealth (eg self-funded retiree with lots of assets) and other low income earners have very low expenses (because they have good access to very cheap housing, medical, or they have access to very good support from family members etc). By the same token, people in higher income brackets also experience financial hardship (although usually for shorter periods and to a smaller proportion). It just goes to show you can't judge from the outside.

[SunnyRain]

I think it has more to do with how much an extra adult would "cost" rather than how much they contribute. ie the cost of the second adult's food & clothes but not fixed costs like rent. ITMS

I see. But in that case my son should be 0.5, my daughter 0.4 and me about 0.1 given they're the ones needing new clothes constantly and my son eats so much and he's only 3!

I don't take up anything.

--'--,--'--<@
Jude 07/10/08 | Lilac 16/06/11

[Amity]

Interesting. I'm classed as middle income according to this but I certainly feel better off than that!

[Rouge]

Really? Wow? The only reason we are I think is because we are financially supporting 2 other adult children.

[Maruschke]

Middle here... as we knew. I don't work FT and DH doesn't work at all so I think we are lucky to even come out at that.

[Epacris]

I was shocked, totally stunned, at how low we are on that scale. I feel like we’re really rich and doing just fine??? So interesting, thanks for posting MD.

[~Hestia~]

According to that we're high income...it makes me laugh as I don't feel it!

Although, if DH was paid fortnightly instead of monthly we mightn't struggle so much.

[RainbowBrite]

That is so true, and in fact the level of income is less closely tied to experiences of financial hardship than you would imagine. I remember reading something a few months ago where they excluded the lowest income earners because it would skew the results. Either because some of those very low income earners don't need an "income" because they are living on accumulated wealth (eg self-funded retiree with lots of assets) and other low income earners have very low expenses (because they have good access to very cheap housing, medical, or they have access to very good support from family members etc). By the same token, people in higher income brackets also experience financial hardship (although usually for shorter periods and to a smaller proportion). It just goes to show you can't judge from the outside.

I agree with you, but sometimes living ok on a really low income just comes down to good budgeting and being very frugal

[wysiwyg]

Interesting - I always think we are middle income but we actually come out as low 10th at the moment while I am not working, when I go part time in a year might scrape into middle, and if I went back fulltime would get towards top of middle, but we can only afford to be low income because we were previously middle income/perhaps high as was pre-kids.

[Mildez]

Low income here also

[Butterfly Dawn]

Think I musta dun sumthing wrong cause I ended up with about $26 Imagine!

[fionas]

We're bang in the middle on one income. I feel very lucky that we have no mortgage/rent but we deliberately did that (sold up and moved from Melbourne) so that I could have a career break/change after DD2. If I was working we'd be in a high income bracket but we'd also have a mortgage.

I'm surprised that they don't take mortgage/rent into account as it's such a determinant of your overall financial position.

[The[cookie]Doctor]

I did the figures roughly because I couldnt be bothered pulling out the tax records and form what I can say we are upper middle bracket.
That has come as a bit of a shock I would have thought lower middle bracket to be honest but maybe that is because most of the time I don't feel like we live any differently to how we did 3 year ago on only 40% of our current incomes. We now save a fair bit though so I suppose that contributes to feeling like we have less money as I put money away before accessing the money to spend ITMS.
After getting a shock at being high middle income I think I will budget at how much we are 'allowed to spend' per week rather than budgeting a figure to save. The more I have thought about it this afternoon the more I feel disgusted at just how much we have taken advantage of our additional finances. I don't see it as a bad thing but it hits home a bit that I could have saved that much more. So glad I track all our spendings so I can look at it and go - well here's the extra $5000 we could have saved, at least we have XYZ to 'show' for it.

[Butterfly Dawn]

Okay, worked it out now PHEW! that made my brain hurt
We are low (between 1 &2) with 1 income. If I worked we would be middle-high.
It doesnt worry me on a day to day thing and I know that once our business is going well we will be better off- but stil living the same as we'll be saving madly to come home. I dont want the kids to go through the high school system here (7am-9.30pm 6 days a week) and I just wanna come home.
DS1 complains his clothes arent as nice as some of the kids in his class. DS2 is too young to care about all the hand me downs-of the not so nice clothes :LOL: DD will get minimal hand me downs being that the clothes will be pretty worn out by the time they get to her.
But really we want for nothing on a daily basis and have room to tighten if we needed to
Intersting though

[Amity]

I have a good accountant Rouge