First Person: Why 6 Figures Isn’t Making Us Rich

Yahoo Contributor Network

I used to think if my husband and I could pull in $100,000 between the two of us, we'd be set. According to a recent article by Bankrate.com, making a 6-figure income used to be the benchmark for financial success. Twenty percent of households in America now belong to the 6-figure club, but most of us couldn't afford a country club membership on our salaries.

I can't even remember when my husband and I officially crossed over the magical line from making less to more than $100,000 because I've never felt rich. I do know our middle-class lifestyle hasn't changed as the price of college tuition, food and health care has risen. Now, if my husband and I each made $100,000 a year, I'm sure we would be taking lava rock showers in Fiji or sampling the latest concoction from our personal chef. But until I am in that situation, it's difficult to know how much money I'll need to maintain a high-end lifestyle.

According to Bankrate.com, there are several reasons why it's hard to stretch 6 figures in today's economy.

Purchasing power is diminished

In order to have the same purchasing power of someone making a $100,000 income in 1980, I'd have to earn $279,000 today. Although the inflation rate is not as high today as it was decades ago, the cost of college tuition and health care costs have risen faster than the rate of inflation.

Hitting the income plateau

Another challenge workers today have to deal with is stagnant wage growth. I know I didn't receive a pay increase for a number of years. To add insult to injury, I received a pay cut this past year. Moreover, I'm dealing with furloughs or unpaid days off while the economy still wavers. From 2000 to 2010, real incomes fell 7 percent, according to Bankrate.com.

Being unable to afford status symbols

I laughed when I read the story about how a high roller in the 1980s often had an expensive home and BMW in their driveway, but today's 6-figure earner is more likely to drive a beat-up Toyota and live in a 1,500-square-foot house. The engine to our BMW burned up a few months ago, which left us with a budget car in the driveway of our Florida starter home.

Raising a child costs more

My husband and I decided against having more than two children because we know raising children takes a huge commitment. Experts say the cost to raise a child to age 18 can be as high as $234,900, which is up 40 percent from a decade ago. Amazingly, the U.S. Department of Agriculture figures don't even include the cost of college.

Although my husband and I can't control the costs of college, gasoline or food, we can keep our middle-style lifestyle in check by staying at home instead of going out and wearing the same clothes longer. Some experts say people get into trouble with lifestyle inflation because they spend more money as they make more money. After the Great Recession, we embraced our lifestyle devoid of status symbols and luxuries. I don't know if we will retire with the magical $1 million, but I'm not naïve. I know it will take twice that amount to rise above out middle-class lifestyle in retirement.

*Note: This was written by a Yahoo! contributor. Do you have a personal finance story that you'd like to share? Sign up with the Yahoo! Contributor Network to start publishing your own finance articles.

More from this contributor:

My life after debt

Breaking the Habit of Living beyond my means

My House Isn't Making me Feel Poor

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