How Are People Affording Nice Things?

The short answer is - there is no short answer.

When I started looking into this, I expected to land on something simple like “they aren’t affording it.” But the more data I went through, the more it became clear that it depends heavily on individual situations. The reality shown in the data is also quite different from what gets amplified in the media. Things are tight, but not universally broken. And that nuance doesn’t get clicks.

According to Statistics Canada, the median after-tax income for economic families in 2023 was $104,800. That works out to about $8,733 per month per household.

Median is important here. Half of families earn more than this, half earn less. This is far more useful than “average income,” which gets skewed upward by high earners.

That number is interesting because it lines up closely with what we spend monthly — and we live what I would consider a modest middle-class lifestyle. We actively avoid a lot of unnecessary spending. If we simply earned and spent the median, we wouldn’t have much left for savings or investing. We would be exactly what people warn about — one unexpected expense away from a problem.

But if we trim a few categories, there’s room. Not a lot, but enough to build a buffer. It’s also worth noting that this income is after tax and includes employer-based retirement contributions (like GRRSPs). So a portion of that “missing savings” is already happening behind the scenes for many households.

Where the Money Actually Goes

Looking across data from CREA, AutoTrader, Equifax, CFLA, and more StatCan tables, everything points to the same conclusion - most of the financial pressure comes from just two categories:

• Housing
• Transportation

That’s it. Not subscriptions. Not coffee. Not even groceries. Those two alone can easily consume 50% to 60% of a household’s income. This shouldn’t have taken hours of reading to figure out, but the numbers make it painfully clear.

What’s more interesting is how these categories have changed recently. Inflation has hit everything, but housing and transportation have done most of the damage. Families are reluctant to adjust either of them, so everything else starts to feel expensive by comparison.

Put it in perspective:

• If groceries double, that’s roughly a $700/month increase
• If housing costs double, that could be $3,000–$4,000/month

That’s the difference.

Pre-2020

I wanted to see what this looked like before everything went sideways. Using the same dataset as before:

• Median after-tax income for economic families in 2019: $92,400
• That’s about $7,700 per month

So between 2019 and 2023, income increased by about $12,400 (~13%). On paper, that looks decent. Now let’s look at the other side.

Housing (The Real Problem)

• Average home price in 2019: roughly $360,000–$380,000
• Average home price in 2023–2025: roughly $650,000+

That’s not a 13% increase. That’s closer to 70%–80%+. Even worse, interest rates were significantly lower in 2019. So not only did prices increase dramatically, but also the loan size increased and the cost of borrowing increased. That compounds fast.

Transportation (Quietly Getting Expensive)

Vehicle costs also crept up. Interest rates were lower in 2019 and the vehicle prices were lower.

Today, vehicle prices are higher and interest rates are higher. As a result, the loan terms are longer on average.

Nothing exploded the way housing did, but transportation quietly became a much heavier monthly burden.

So Were Things “Better” Before 2020?

Yes - but not in the way people think. In 2019 incomes were lower, debt levels were already high and many households were still stretched. But housing was significantly more affordable relative to income, interest rates made borrowing cheaper so the margin for error was larger (i.e. there was a bit more money left over).

Today, though - incomes are higher but the cost of “locking in” a middle-class lifestyle is much higher and the margin for error is smaller, meaning that very little money is left over.

The Real Answer

So can families afford the current lifestyle? Some can. Many can’t. Most are somewhere in between. What the data suggests is the “middle-class lifestyle” is still possible but it is far less forgiving than it used to be and small decisions matter a lot more than people think.

Two families earning the same income can end up in completely different situations depending on when they bought their house, whether they finance one car or two and how aggressively they manage fixed costs.

Thing the Data Does Not Show

There are a few things that don’t show up clearly in the data but matter a lot:

1. Timing matters more than income - Someone who bought a house in 2018 vs 2023 is playing a completely different game.
2. Fixed costs determine everything - Once housing and transportation are locked in, the rest of the budget is already decided.
3. “Average” is not reality - Median helps, but even that hides huge variation. There is no “typical” household.
4. Most people are optimizing for monthly payments, not total cost - This is especially true for vehicles. It makes things feel affordable while quietly increasing long-term cost.

So What Did I Find?

Things are not as broken as headlines make them seem. But they are also not as comfortable as they used to be. The middle class didn’t disappear, it just became a lot more sensitive to small decisions. And right now, housing and transportation are doing most of the damage. If the people you are comparing yourself to bought a house earlier in their lives, then there is a high probability they can afford the cars and all other daily luxuries...but with a very small margin for error. Want to know the margin? Here is a simple calculator.