Enough - The Household Version
This post is the second in a short series exploring what we term an ‘ethic of enough’ and one way that ethic is applied to personal finances.
In the previous Partnership Economics post we introduced what Robert Reeves of the Brookings Institute describes as the “Me? I’m not rich!” problem. (If you don’t fully remember or haven’t read that post we recommend doing so before reading this post.) Picking up from that previous post, we’re here to help you explore and consider what’s objectively enough annual income for your household. Let’s start by you figuring out how your household income bracket compares to others.
Image Credit | Cannon Beach Gazette
At the time of this writing the most current benchmarks regarding national average poverty thresholds are from the 2019 Census Bureau, and benchmarks regarding national average minimum incomes levels to qualify as middle and upper income are from a 2016 Pew Research Center analysis. The table below shows those poverty thresholds and minimum income levels for household sizes from one to five persons. As a cultural point of reference, these data are from the years toward the end of what just finished as America’s longest running bull market (2009–2020).
Minimum Middle Income
Minimum Upper Income
*Census Bureau, “Poverty Thresholds.” (Note: Census Bureau poverty thresholds as a whole are higher amounts than Health and Human Services (HHS) poverty guidelines. For purposes of comparisons to middle and upper income we selected the higher Census Bureau thresholds.)
This chart shows minimum middle income levels average 204 percent of the respective poverty thresholds; minimum upper income levels average 300 percent of the respective middle income levels; and minimum upper income levels average 611 percent of the respective poverty thresholds. You can extrapolate the thresholds and income levels if your household comprises more than five people. How does your household income bracket compare to others? Why do we even invite the comparison? Not to embarrass you, nor to give you a reason to be prideful, nor to create pressure to increase your income. In fact, we have altruistic motives.
Yes, really. We want to help you objectively determine whether your household has enough annual income and whether it may be time to stop striving for more. Maybe you’re working for the misdirected goal of simply earning more? Maybe not. But have you taken the time to do the math to figure out what you're doing with your professional life or have you just assumed your professional life is about increasing your household income? That’s what we want – for you to think about it and make the conscious decision whether you need to increase your household income or recognize that you just think you do because that’s what our culture has taught us. Your life; ideally, your conscious decision.
To that end, in the next Partnership Economics post we introduce our innovation of the “enough-ratio.” Our enough-ratios for household income will provide you an objective gauge and reality check of whether your household is earning enough or has enough wealth. For some, we also want to help you realize that if you’re capable of making excess money (that does not involve planation system economics and exploitation of others), then it’s past time for you to start thinking about ways to use your current and excess income for purposes beyond hoarding for yourself and your family.
You know your household income and the chart is right in front of you; take a look. We understand this may be an emotionally charged exploration, but you need to do it with clear eyes, head, and heart. For example, do you have a household of two people and a household income of over $110.706? More? Okay. Cool. That places you in the upper income range for Americans. Get a sense of where your household sits as compared to U.S. national standards.
Now, hold that thought and that figure. You'll use both in the next post, along with our enough-ratio, to help you determine whether you objectively have enough income from your household and perhaps, just perhaps, you can stop striving for more because your household has enough annual income. Hmm, beginning to sound like a possible pathway to personal and professional freedom?
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