If Canada’s Middle Class Is Better Off Than America’s, Why Doesn’t It Feel Like It?

Apr 27

A recent study claiming Canada’s middle class is better off than their American counterparts raised eyebrows in both countries. The study was based on measuring median income per capita after taxes.

Middle Class incomes chart While politicians and economists on both sides of the border contemplate and interpret the meaning of the study, I’m left to ponder why, if Canada’s middle class is supposedly better off, why it doesn’t feel like it?

Figures usually vary as to what constitutes a middle class income, but the range tends to be between $50,000.00 to $90,000.00 per year.

For a number of years now, my wife and I have a combined income that would rank us in Canada’s middle class. I’m a freelance writer, she works at an investment company. I also draw a military pension and a small disability pension. We’re fortunate to live in a part of Canada with a low cost of living.

We have a fixed mortgage on a modest three-bedroom home. We recently finished a six-year car payment (and intend to keep driving our that car until it reaches the equivalent of a monthly car payment in maintenance to keep it on the road) and pay off our credit card monthly, keeping the limit to a reasonable $1,500.00.

We do have consumer debt, with the equivalent of the cost of a compact car in a line of credit, the painful leftover of a failed business venture several years ago. We make monthly payments with the hopes of paying it off in the next three or four years. We’re actually better off than most folks carrying consumer debt.

Our only child moved out on his own nearly two years ago, so it’s just my wife and I in our home. We’ve always lived frugally, a long-time habit left over from the reckless spending of our youth. We meticulously budget every cent, ensuring we regularly pay our bills, have sufficient money for groceries, and still leave enough for our modest entertainment needs.

We also have a tax-free savings account, which we use for emergency purchases, like an unexpected car or home repair. We both contribute monthly into RRSPs, and my wife regularly purchases shares in her investment company.

Over the years both of us have learned through sometimes-painful trial and error to live within our means. Overall our lives seem comfortable, perhaps even a little dull.

Yet every year feels like a struggle to keep our heads above water. Our financial adviser and accountant tell us we’re doing everything right, but there never seems to be enough money. We never seem to get ahead. Sure, we comfort ourselves that we’re doing better than most, but that often feels like cold comfort.

It’s not as though we want to have a lot of money to throw around on frivolous, expensive purchases. We don’t need a bigger house, or a second vehicle. Having traveled extensively in our youth, we’re not interested in expensive resort vacations like many of our friends.

Part of it is due to my freelance career, as my revenue fluctuates year-to-year, but more of it seems tied to the rising cost of living. The cost of even basic home and vehicle maintenance gets more expensive. The price of heating a home and driving a car keeps rising. Buying food and appliances gets more expensive. Municipal and provincial taxes. Cable. Electricity. Water and sewage. Home and vehicle insurance. All seem to rise with each passing year.

Despite the strong efforts we keep making to pay down our debt and live within our means, it keeps feeling like we never get ahead. Just when it seems like we’re making progress, we seem to fall back a step or two.

Maybe the majority of my fellow middle-class Canadians genuinely feel like they’re doing better. To me, it feels like I’m standing still.

If most middle-class Canadians feel as I do, then it must truly be hellish for the American middle class.

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