Make sure home is where your future shines brightly

We’ve been hearing a lot lately about the struggles of the middle class in America.

The Brookings Institution defines a middle-class income as somewhere between $42,500 to $166,900, a wide range that largely depends on where you live.

Here in San Diego, the figure hovers around $80,000.

While on paper that looks like a lot, the deciding factor comes down to, “Great, but what it will buy?” Not as much as it used to, that’s for sure.

While we’re fortunate to live in San Diego County, we pay a premium to live here. In fact, our region has one of the nation’s biggest gaps between cost of living and earnings, thus, the so-called “sunshine tax.”

The most obvious challenge is the cost of housing, both ownership and rental. Much like we’re in an employee’s market now, it is also a landlord’s market.

Due to a lack of supply and a high demand for rentals — both for apartments and houses — landlords are able to increase rents virtually at will. It’s the free enterprise system.

Unless you’re willing to relocate, sitting home and comparing rents in places like Phoenix, Las Vegas and elsewhere doesn’t accomplish much. What to do?

Concentrate on increasing your earning potential

You know how strongly I feel about waking up in the morning excited to go to work. Well, you just may have to put off that career move as you concentrate on increasing your earning potential.

You or your stay-at-home partner or spouse may have to consider going to work at a less-thanperfect, but higher-paying job.

Consider taking a second job on weekends. Those added earnings could go into a home-buying savings account.

In the current economy, the three basic “H’s” are housing, higher education and health care. The need to attain a higher level of all three escalates every year.

Let’s start with housing. You may have to buy into a condo rather than a house for that first-home ownership.

It may be smaller than you wanted. Or it may be a fixer-upper, part of a gentrification of your new neighborhood.

Assuming working from home isn’t an option, your commute to work may be longer if you move to the outer fringes of the county.

But buying that first house or condo will get you into the game and it surely will appreciate in value. You may want to sell it in a few years and use your equity gain to buy into your desired neighborhood.

You may decide to leave San Diego for a few years, then come back with higher earnings and savings. Or maybe you’ll settle into a new rhythm elsewhere and wind up not missing San Diego at all.

Yes, you thought you were done with school, but today’s job market has changed. Life-long learning through higher education isn’t just a cliché, it’s a necessity. To make sure you’re still relevant in the job market, keep your skills sharp.

The last “H” is health care. Just like when you’re shopping for a job that pays more, and one that has education benefits, search for one that pays for health care. You’ll need all three.

As an aside, very likely this is the first generation in which our children may not do as well financially as their parents, especially if their parents are in good financial shape.

Try not to regard your parents as your competition. Maybe they can be your lifeline. Maybe they’d be willing to loan you the down payment on your favorite house or condo. Or cover costs of additional classes or monthly health insurance. Don’t be too proud to ask.

Someone along the way probably helped them out. They probably took second jobs to get established and often both spouses worked and scrimped to get to where they are now.

Don’t beat yourself up over the struggle for housing, higher education, and health care. Make some tough decisions and sacrifices now and they’ll pay off in the long run.

You’re in a marathon, not a quick sprint, toward establishing your future. Your career management is a key piece, but there are lots of other pieces to consider short-term.