Are you on track? How do you stack up?
You’ve got big goals, and you’re working hard to reach them. Yet there’s that little voice inside your head that wonders “Are you on track”?
The January 2007 isse of Money magazine asks these questions in its cover story: for your age and stage of life, are you “on track” with major life goals like owning your dream home, sending kids to college, or retirement? And how do you compare with the Joneses?
Some of the Joneses are doing quite well; in fact I’m surprised how well. For instance, “about 8% of U.S. households have a net worth of $1 million or more (not including equity in a primary residence).” The average household income for millionaires is $209,000, 81.5% of them have college degrees, and 86% of them are married. The average age of the millionaire head of household is 58.
On the other hand, most Americans aren’t doing so well. Take saving for your kid’s college costs: “31% of parents plan to help, but haven’t started saving; 64% of parents are saving for college but have put away less than $10,000.”
But what does this mean for us? As gays and lesbians, to whom do we compare ourselves? I’m not sure who the Joneses are. And all comparisons with others aside, how do we know if we’re on track?
Because of issues around coming out (I’ll speak for myself), we tend to get partnered later in life, if at all. So, for many of us we’re dealing with a single income for more of our adult life than our straight counterparts. On the other hand, gays and lesbians tend to have fewer children compared to heterosexuals (it’s a little more complicated for us, right?) so that keeps a major source of expenses down for some of us.
In many ways we’re just like anyone else: we work, we save, we spend. But in significant ways we live differently, plan differently, and probably prioritize and spend differently. I’ve been single most of my adult life, so when I was saving to buy a house, it took a long time: I only had one income, and I had to make rent while saving for a downpayment. I couldn’t afford the vacations my peers were taking.
However, I didn’t have to pay for a wedding in my 20’s, like almost all of my straight friends. Since most people I know borrowed money for that (despite financial help from parents) a chunk of their double income went toward wedding debt for years.
I guess my point is, I’m fairly interested to learn how the straight majority sets goals and budgets and saves, but to some degree it isn’t that helpful for us as gay people. We have to set our own unique goals (for example, to finally pay off my student loans next year, without the tax breaks that married couples get at my income level).
And if we care to compare ourselves to others, we have to find our own peer group (for instance, I know a gay couple 20 years senior to me who have done well for themselves from humble beginnings, and they are more valuable role models to me than straight married couples with 2.3 kids).
Well, it’s nice to know that according to Money magazine, 86.1% of my peer group own a home, and 96.2% of them carry a mortgage (like me) , but 67% of them carry a credit card balance month to month, averaging $3,525 (unlike me). But ultimately, as a gay man I have to chart my own course, and realize that the straight world doesn’t actually hold up a mirror to my own life. More like a picture window, and I’m looking in from the outside.
I think for us it is very hard to get a comparison b/c most research all talks about “straight” money & situations. Of course, you can not tell by just trying to look and compare yourself to others in the community b/c so much of what we see is leased or bought on debt. I find it a struggle to know how I am doing b/c I have no real comparison to make sure I am where I think I need to be.
Most of us can find ways that we don’t match average people, either in our circumstances, our goals, our values, or some combination.
I think the best we can do is look at our goals, our time frames, and what we’ve accomplished so far. And then use these broad statistics only when they help us.