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The Secret Sauce Episode 021
The financial profile all of the average American or more accurately profiles of many average Americans since a proper apples to apples? Comparison takes into account several factors. So we're GONNA approach this this by looking at the financial life cycle of somebody which of course starts with birth. Fortunately you don't have to pay for your own birth. That's good because because the average cost of a birth in America these days ten thousand dollars and that's if there are no complications whatsoever So let's jump ahead to one of the first experiences people have have with actually earning money and that is an allowance. How many kids get an allowance? And how much do they get law. According to a recent survey from the American Institute of CPA's as two thirds of parents get allowance and the average is thirty dollars a week. It's pretty nice. Isn't ages they say what ages they start giving they broke it down a little bit. Okay but what was interesting to me was far too five. Parents expect the children to do work. Some people feel like you should just allowance because that's how you learn how to be responsible And they expect at least one hour week of chores but on average children are spending five point one hours a week doing chores for their allowance. So let me just say that my kids are below average with my kids are not doing five hours. Where the tour? I don't even do five hours worth of chores in our house and I do a lot of chores in our. What are these are? Are these kids living on a farm like that's a very good question. Chores chores could be clean your room for us. It is dishes this. This is the number one joy that kids do and we're not even very good of making them. Do it. Put your own shoes on in the morning to dress yourself. Live at Downton Abbey. Everyone everyone here anyway. So there you go. That's allowance so that's money from your parents but you'll eventually reach the point where you can start earning money from other people and here we are talking about being a teenager but the emphasis is can because most teenagers don't according to a study by the Hamilton project. And the Brookings Institute back in Nineteen nineteen seventy nine fifty eight percent of teenagers. Were doing some sort of work. But today it's only thirty five percent most teenagers don't have a job which not even like babysitting reasoning or I I guess not then the factors for why this has gone down as number one. They say that teenagers just have more things to do. Like like more kids are doing More kids are taking classes over the summer. Also there's less low wage work more competition from older folks and immigrants. That said I have three teenagers and I'm not sure I quite vile this Mike. Especially in the summer my kids have managed to find jobs but regardless the majority of teenagers not working. What was your first job while so I used to cut before I was of age to be doing? I cut lawns in the neighborhood and Dan. I watered flowers at a local flower shop. Then sure I've told you this story F.. I faked my birth certificate so I could work in McDonalds when I was age. Fifteen instead instead of sixteen so I did that ric have I to you. It was your first job horrible paper route once where you have to go door to door and collect the money which I always hated to do you so I never did it so I never really got paid for thing. What about you so my first job? I I went to high school where you are expected to work like four hours a day so you go to class in either the morning or the afternoon and then you would then so what kind of like work at the school. Yeah you'd work in the school or you'd lurk working in nearby bakery or you'd work farm too so you could work on the farm. Some people had farm jobs or work on maintenance and the school So I worked for the principal symbol. Of course I was responding. I did a lot of you. Know entering in people's grades and typing let transcribing letters and just the office work so as like fifteen. I think started. Did you like that because I've often thought especially as a former elementary school teacher junior high teacher. I thought a lot of this education is wasted in the dish. It's been half the day like working out in the basically interning at different types of jobs because they're not learning so much in school. Yeah no I mean it was is one of the better jobs to have on campus. That's for sure. So did you. And your friends. I'll get straight a's no but we I mean we could. We could have definitely changed. All of our grades were honest asked by it was a religious school so God would have smoked in us we. We were well aware of the consequences for changing our grades. So we didn't do it got got it. At least I didn't what's next in life. maxine life is well. We're going real job hitting their well even before. Then you finish high school and and then what college you go to college. I should first of all point out that it's nice if you want to write so point out. First of all. The graduation rate from public high schools is now eighty five percent near an all time high. So let's go so how many people then go onto college sixty nine point seven percent according to the Department of Labor not everyone gets four year degree as some people go to college and they don't get a degree. People get the associates so when you look at four year bachelor's degrees and graduate degrees. It's it's between thirty five and forty percent of people who actually end up with a degree but almost seventy percent do end up going to college which of course brings us to one of the first major financial decisions. A kid has to make depending on how much their family is willing and able to pay and that is the cost of college so according to the College Board. Let's go over the numbers here for the two thousand nineteen thousand twenty year a four year your public in State Education Room Board Fees Tuition Twenty one thousand nine hundred and fifty for your public out of state thirty eight thousand three hundred and thirty four year private school forty nine thousand four hundred ninety dollars ice now. The College Board is quick to point out at those are the published sticker prices and that most people don't pay those they say that about three quarters of students receive grants that reduce the actual price that people pay and just just about every college these days has something called net price calculator. You go onto their website. You put in some basic financial information. It gives you a general idea of how much you would pay. It's not binding or anything but if you're thinking of a college go to the net price calculator and you get an idea of how much aid you might receive. That said. We all know that grants. It's an aren't enough. which brings us to the topic of educational loan so approximately two thirds of kids graduate with debt with the average being between thirty thousand and forty thousand dollars depending on which source? You're looking at repayment. Can Take Ten to twenty years. And according to the Federal Reserve one fifth of ours were behind in their payments in two thousand in seventeen. So you have to wonder is a college degree worth the cost well for most people. The answer's probably yes. College grads on average earn seventy I five percent more than high school grads but that said the Fed did find that college is not a good investment for about twenty five percent of graduates and several studies of people who have loans at found that the majority of people regret the debt and they wish they would have found some other way to pay for college either going to community college allege not going to the private school something like that but regardless of how you pay for it you do graduate head out of college time for that first job. How much can you expect to make while starting salaries these days around fifty three thousand dollars? But who's paying you the most well engineering degrees computer. Peter Science and math those starting salaries are between sixty five thousand and seventy thousand math math. Now that's crazy math data that everyone is so hot with the data. One loves the data exactly so since we just brought up salaries. Let's expand this beyond starting income income in general in the United States. What is the average or the median household income and the United States and the answer is whereas the sixty three thousand one hundred seventy nine dollars? that's what you said family or average average average household household income but there are a lot of factors that would tournament starting with where you live. So the highest incomes are in the northeast. Meeting is around. Seventy thousand thousand filed by the West Midwest and the South South is lowest at fifty seven thousand. Being married helps. The median income for a household with a married couple earns. Ninety three thousand six hundred dollars Also age is a factor the households will make the most are in the forty five to fifty four age range with a median income of eighty. Four thousand four hundred dollars. We've talked about this before. Where income generally peaks at some point in your late forties or early fifties? Finally just just give me an idea of where your income puts you in relation to the rest of America. Here's how the income dispersion breaks down so if you make thirty seven thousand dollars you're in the bottom thirty thirty percent again. Median sixty three thousand. If you make one hundred thousand year in the top thirty percent hundred eighty four year in the top ten percent and to be in the top five five percent you make two hundred and forty eight thousand dollars. That's generally how income breaks down.