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Middle-class families share how much they have in their savings accounts and it's eye-opening

"We make the most money we ever have and have zero savings. We live paycheck to paycheck and every month I don’t know how we get by."

Photo by Karolina Kaboompics/Pexels

Many middle class families are sharing that they have nothing in savings right now.

According to an April 2024 Gallup poll, 54% of Americans identify as part of the middle class, with 39% identifying as "middle class" and 15% identifying as "upper-middle class." That percentage has held fairly steady for years, but what it feels like to be a middle-class American has shifted for many.

Notably, inflation caused by the pandemic has hit middle-class families hard, with incomes not keeping up with cost-of-living increases. Housing costs have skyrocketed in many areas of the country, mortgage interest rates have risen to levels not seen since the pre-Obama era, and grocery bills have increased significantly. One government study found that the cost of living has increased between around $800 and $1,300 a month, depending on the state, since 2021, putting a squeeze on everyone, including the middle class.

How much money do middle-class Americans have in their savings accounts?

One woman shared that her family is just getting by and asked other middle-class people to "chime in" with what they have in their savings accounts.

@abbyy..rosee

somethings gotta give #savings #middleclass #relatable

"I swear, every paycheck I am putting money into my savings, but needing to transfer it back within a few days," shared @abbyy..rosee on TikTok. "My registration is due. My husband's registration is due. He needed two new tires, even though they had a warranty. That's $300. My oldest needs braces, he needs a palate expander, that's $120 a month. Not to mention groceries are $200 more a week. Forget about feeding your family great ingredients because who has $500 a week to spend on perfect ingredients to feed your family?"

middle class, cash, savings, family finances, dollar bills, A depressed couple doing their bills.via Canva/Photos

She explained that her husband makes enough money that they should be able to live comfortably, and that she quit her job because the cost of daycare was more than she was making.

"At some point, something has to give," she said. "What is going on? How do I save money?"

People in the comments chimed in with their savings account totals and it was quite eye-opening. Many people shared that they have $0 saved.

"We make the most money we ever have and have zero savings. We live paycheck to paycheck and every month I don’t know how we get by."

"I think the middle class is 1 personal disaster away from bankruptcy."

"Y’all got savings accounts?!?! 😂"

"I used to freak out if I had under $10k in savings, now I’m happy when I have over $150. 😫"

"We make almost 100,000 a year with no savings!!!! It's always something!!"

"I'm lucky if we have $500-$1K for an emergency. Every single time we start saving, something happens: the vet, the cars, the kids... something."

"Savings account? I transfer money each paycheck but always end up needing to transfer it back. My husband makes great money too but we are scraping by."

"$803 but we have to pay a $750 deductible this week b/c my Husband hit a deer soooo… back at it 😭 It’s exhausting. Constantly draining it, refilling it, transferring."


middle class, cash, savings, family finances, dollar bills, An upset couple doing their bills.via Canva/Photos

Some people shared that they do have some savings, but several said it was because they'd had an inheritance or other chunk of money come their way. Many people shared that their savings has dwindled as increased costs have taken their toll. Some people gave lifestyle advice to save money, but most agreed that just the basics have gotten so expensive it's harder to make ends meet much less put extra into savings.

Thankfully, the inflation issue appears to be waning, but even just plateauing at their current financial reality isn't ideal for many American families. Middle class is supposed to be a comfortable place to be—not rich, but well enough off to feel secure. That's not how many middle class folks feel, though. Most Americans don't have anything close to the amount of money saved that is recommended across the age spectrum, but at least hearing that others are in the same boat is somewhat comforting.

middle class, cash, savings, family finances, dollar bills, An upset couple doing their bills.via Canva/Photos

Further, a 2024 study found that 37% of Americans can't afford an unexpected expense over $400, and nearly a quarter of them don't have any emergency savings at all. “Not all surprises are good, and people know it. The study suggests financial precarity at a time when household finances may be stretched due to rising prices and inflation,” says Rebecca Rickert, head of communications at Empower. “Life happens, and people are stressed about the surprise expenses that could tip them off-balance.”

It can be vulnerable to share your financial reality, but it's helpful to hear what other people are doing and dealing with so we all feel less alone when we're struggling. Perhaps if people were more open about money, we'd all be able to help one another find ways to improve our financial situations rather than lamenting our empty savings accounts and wondering how to change them.

This article originally appeared last year.

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Education

This surprising map reveals the real value of $100 in each state

Your purchasing power can swing by nearly 25 percent from state to state.

Image by Tax Foundation.

Map represents the value of 100 dollars.

As the cost of living in large cities continues to rise due to inflation, tariffs and other economic factors, more and more people are realizing that the value of a dollar in the United States is a very relative concept. For decades, cost of living indices have sought to address and benchmark the inconsistencies in what money will buy, but they are often so specific as to prevent a holistic picture or the ability to "browse" the data based on geographic location.

Each year, the Tax Foundation addresses many of these shortcomings using the most recent Bureau of Economic Analysis data to provide a familiar map of the United States overlaid with the relative value of what $100 is "worth" in each state. In recent years, they've further updated their data so that you can break down the value of your money across every single metro area in the United States. It's an incredibly valuable tool with so many people considering, or having already migrated from states like California to Florida, Texas and other states with friendly state taxes rates and more affordable housing options.

The map quantifies and presents the cost of living by geography in a brilliantly simple way. For instance, if you're looking for a beach lifestyle but don't want to pay California prices, try Florida, which is about as close to "average" — in terms of purchasing power, anyway — as any state in the Union. If you happen to earn, or luck, your way into Silicon Valley tax brackets, head to Hawaii, D.C., or New York. You'll burn through your money in no time. And in some of those places like Hawaii, there are quality of life measurements that often exceed raw purchasing power.


So, where does your dollar go the furthest in 2025? The financial planning site GoBanking.com compiled its own list of cash purchasing power across each state and found that in California, you get the least bang for your buck, only $87.42 in real purchasing power for every $100 of cash. The average person in California makes $96,344, one of the higher income levels in the country. However, just living in California on average costs residents a staggering $86,408, leaving the average person with little flexibility for long-term financial planning projects like retirement, saving for a new home or even buying a new car.

At the other end of the spectrum is Arkansas, the state where your dollar goes the furthest. In fact, that $100 bill burning a hole in your proverbial wallet is in fact worth more than its technical value, with a real value of $113.49. On top of that, the cost of living is only $37,067, less than half of that in California. Further, the average cost of a new home in Arkansas is $208,743, less than one-third of a new home in California. Not coincidentally, in 2023, Arkansas was the top destination for people moving to another state within the United States, followed by Texas.

value of $100 in each state, money, economy, inflation, tariffs, Arkansas, California, Florida, TexasA woman holds six $100 billsImage via Canva

How about Florida, which has received outsized attention in recent years for its overt efforts to draw residents from California and other states with higher costs of living? According to the most recent data, Florida is in fact much closer to California than Arkansas, coming in only in 40th place on the GoBanking rankings, with $100 in cash only being worth $96.55. However, the annual cost of living is still only slightly more than half of that in California, $53,505. And if you're looking to buy some real estate, the average home is valued at $404,924. That's still well outside the purchasing power of many Americans but with built-in advantages such as warm weather and the top-ranked state education system in America, it's obvious why so many people, especially those with families, are choosing Florida over California in recent years.

According to U.S. News and World Report's data analysis, California only has the nation's 23rd best education system and is ranked a paltry 37th overall in their state rankings. It's quite a contrast for a state that bills itself on the promise on opportunity, natural wonder and positive lifestyle options. And with 2024's wildfires, the constant threat of earthquakes and other factors, California clearly has challenges beyond economics if it wants to remain one of the more attractive states in the nation.

Of course, those numbers are always in flux. And political leaders in California have promised concrete reforms in order to address the state's high cost of living compared with the value of the its social and emergency services. If you want proof of how quickly things can change, look at a similar analysis of the value of $100 in each state from 2015:


- YouTubewww.youtube.com

However, those negative statistical trends aside, California continues to have an incredible pull on our collective imagination. 423,194 Americans left their state for California according to the most recent data in 2023, placing it in third behind our previously mentioned top two states, Arkansas and Texas.

So, it's clear there are a number of factors that determine the best place of live in America. When it comes to raw purchasing power, you cannot beat Arkansas. But there's so much else to consider: public resources like education and healthcare, job opportunities (you probably won't make nearly as much in Arkansas as you might in California) and other factors such as proximity to family, friends and personal interests.

There's no doubt America is rapidly changing and that includes what people value the most when they decide where to live. In uncertain economic times, the face of America will likely change radically in the coming years, with the political, economic and social landscape shifting in meaningful ways.

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Democracy

Millennial shares a spot-on theory about why his generation and Gen Zers are so burned out

They're not lazy, they're exhausted.

via Canva/Photos

A woman is feeling major burnout.

Freddie Smith is a popular TikToker and host of The Freddie Smith Podcast, where he talks a lot about income inequality and finance from a down-to-earth perspective. One of Freddie’s biggest topics of focus is how the younger generations, millennials and Gen Z specifically, have it a lot harder than their Gen X and baby boomer counterparts. Recently, he described why he believes the younger generations feel so burned out: They are spinning their wheels and not getting ahead because of the rising cost of living. This counters the boomer notion that young people are entitled and lazy.

“They're working 40 hours a week, but at the end of the month, they have nothing to show for it. So if you're not making any progress and you look back five years and go, damn, I made $300,000 in the last five years or I made $400,000 in the last five years and I have nothing,” Freddie says. “If, anything, I have $25,000 in debt, that's gonna create burnout cause you feel like you just put in 5 years of work and have nothing to show for it.”

@fmsmith319

Why Millennials and Gen Z are facing burnout

Freddie adds that the younger generation's inability to get ahead leaves them constantly strained. They are stuck in apartments and can’t grow their families, or if they do, they don’t have the same quality of life that they were raised with.

“It's the 30% increase in rent prices where people are spending 40% of their money on rent, you're still being taxed 20, 25, 30%. People just don't have any money,” Freddie adds. “People aren't having kids, and they're unable to start families. People are struggling financially, fighting financially, and suffering in relationships. This is all decline in living standards.”

stressed woman, stressed millennial, financial stress, burnout, gen z stress, young womanA young woman is stressed about her future.via Canva/Photos

Feddie’s numbers are backed up by research, and the biggest significant issue that younger generations face is the price of home ownership. Adjusted for inflation, in 1985, the average home cost $96,985 in today's money. However, the average price of a home today is a whopping $426,100. Rent is a little better, but still tough. The average rent in 1985 cost $1,031 in today’s dollars; in 2023, the average rent is $1,406.

In a video published in November 2024, Freddie did the opposite and shared five reasons baby boomers had it much easier than millennials and Gen Zers.

  1. You could buy a house for 30 to fifty thousand dollars
  2. Union jobs were more prevalent
  3. College actually worked
  4. Social Security was actually strong
  5. The invention of 401(k)s
@fmsmith319

Why Millennials and Gen Z have it harder today compared to boomers

“The boomers always come at us and say ‘Why are you saying it was easy I was living paycheck to paycheck. You don't realize how hard it was.’ Look at all the advantages you had and how hard it still was,” Freddie says. “Think about the kids today, they cannot buy a house, union jobs aren't available, college is completely out of whack. They're spending 80 grand to get a job for $50,000. It's backwards.”

Freddie makes a strong case for millennial and Gen Z burnout. Because, face it, there’s nothing more exhausting than grinding away at something and not moving an inch. At the same time, things only become harder. Rent goes up. A carton of eggs is $8; if you are fortunate to have money in a 401k, it no longer feels safe. “Humans are good at adapting,” Freddie concludes his video. “But there's a fine line between adapting and being taken advantage of. And I think we're being taken advantage of.”

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Learning

In two sentences, finance guy crushes the idea of buying a new car. But people disagree.

Here's why people are still doing it.

via Canva/Photos

A woman gets the keys to her new car.

There are many reasons to be squeamish about spending money in today’s economy. Interest rates are high, trade wars may drive inflation, and financial experts say we may be headed for a recession. That comes after the post-COVID period, when the process of everyday necessities, such as rent and groceries, went sky-high.

There’s a lot of economic uncertainty out there, but that won’t stop some of us from needing a car. And, of course, those are getting more expensive, too. The average car cost $49,740 in January, nearly an all-time high. Part of that is inflation, but it’s also because Americans love buying nice cars, and more are choosing luxury models. So now, to purchase a new car at $49,740, with zero dollars down and a 5-year loan, would cost over $950 a month. That’s a lot of money for something that will only decrease in value.

Real estate expert and author of “Retire FIlthy Rich,“ Ravi Sharma, wasn’t shy about sharing his thoughts about buying a new car on TikTok. The post received over 1.2 million views.

"Controversial topic: That $50,000 car loan that you finally paid off after 5 years cost you $62,000 (due to interest). That car is now worth $20,000 due to depreciation. Losing $42,000 in 5 years would be seen as a bad investment, yet people are still buying new cars. Thoughts?"

@personalfinancewithravi

Controversial Topic - What’s your thoughts about this? 🤔 #personalfinancewithravi

Is it financially smart to buy a new car?

Sharma’s logic is hard to argue with. A car is a depreciating asset that will lose its value over time. In fact, according to Kelly Blue Book, the average new car loses 20% of its value after the first year. That number grows to over 60% after five years. So, why not buy a car that’s five years old, costs less money, and is significantly cheaper to insure?

Strangely, most people in the comments pushed back against Sharma’s logic. "You forgot to factor in the benefit of owning that vehicle and the pleasure of driving it. For most, it's priceless. Not everything in life is about making money," Patty wrote. "I have 3 bad investments and loving them. We only live once. Enjoy,” Rich added. Others noted that even though the car's value goes down, you got use out of the vehicle so it's not a total loss.

new car, finance, ravi sharmaA woman inspects her new car. via Canva/Photos

There were a few people who agreed with Sharma. "Yes! Car payments are one of the top wealth killers. I have always bought used and paid cash,” a commenter wrote. "Amen. I’ve never purchased a brand-new vehicle. If you want to be a millionaire, don’t live like one,” another added. "Just driving the new car off the lot depreciates it by 20-25%. Buying pre-owned, someone else took that depreciation. Don't believe me? Buy a $50k new car then try to sell it tomorrow,” a commenter wrote.

Many people pushed back against Sharma because buying a new vehicle gives them joy. But the real question is, how long does that last before it just becomes your everyday car and no longer has the wow factor it had when you drove it off the lot? Further, going back to our car that cost $49,740 and about $950 a month, what if you bought a car for half the price and invested the $475 a month of the payment in a sensible mutual fund? After 5 years at 6% of growth, that would amount to over $32,000.

new car, finance, ravi sharmaA woman gets the keys to her new car.via Canva/Photos

With the constantly rising cost of living, it’s good to consider what it really means to make a big purchase and whether the joy of something new is worth the loss that comes with spending versus investing. Ultimately, the decision comes down to one’s values and financial priorities. Is short-term satisfaction worth the long-term cost when opting for a used car means more financial freedom tomorrow?

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