How Do Median Income Families Spend Money?

Two families who live thousands of miles apart share at least one thing: they both earn the median American family income: $54,000 a year.

But what they do with it is a different story — and a reminder that depending on where you live, and more importantly, how you live, the average median family income of $54,400 can go in very different directions.

It can go towards helping you live comfortably, or it can lead you to live from paycheck to paycheck. Good Morning America's Financial Contributor Mellody Hobson met with the two families, and got an inside look at how they spend their money, and what improvement each family needs to make.

Slices of Life

Michelle Spicer, a divorced mother of three boys, lives in the heart of Chicago in a three-bedroom condo that she rents for $1,300 a month. A manager at a major clothing retailer, she pays $94 a week for groceries, uses Chicago's public transportation system, and enrolls her children in public schools, which saves her a bundle.

Greg and Kari Marzola and their three children live in the suburbs of Baltimore, in a house they've owned for nine years. Their monthly mortgage is $697. Greg, a phone company technician, did a lot of the work on the house himself. They spend $100 a week for groceries. The family car is paid for, but their pickup truck costs $436 a month. They pay $370 a month for their son's private school.

If you look at fixed expenses — housing, food, transportation, education — the two families' lives and locations make the costs different, but their monthly "must have" money is pretty similar. It totals about $1,662 for the Spicer family, and about $1,507 for the Marzolas.

But take a peek into the rest of their piggy banks.

Another Day, Another Dollar

Maryland Family: Kari Marzola works mostly as an at-home mom, but she puts in a few early morning hours at a daycare center.

On the way to work, she stops for a small luxury at a gourmet coffee shop — a caramel cooler coffee drink.

Kari's husband says he takes no money to his work — but brown bags his lunch every day.

"And the guys joke about it," Greg Marzola said. "When I buy lunch out, it's a big ordeal: 'Oh my goodness, he's buying lunch out.'"

While Greg makes breakfast for the boys, Kari is at the store. She shops at stores with the best prices, even if they are not the most convenient.

"Neither one of us will go out and spend money on something we definitely can't afford," Kari Marzola said.

Chicago Family:

Over in Chicago, Spicer makes a coffee stop at Starbucks also, spending $5 a pop. She then makes another stop for a bagel, hits the newsstand, and heads for the ATM. By mid-day, her workday tab is adding up.

"Lunch is usually about $7. It's $5 for coffee, $2 for the bus or the train there, then back is another $2," she said. "[Plus,] maybe a bagel, maybe a snack during the middle of the day."

The average daily out-of-pocket expenditures are $35 for the Marzolas, and $25 for Spicer. Spicer admits she could be a more disciplined spender.

"I'll buy shoes for the kids or movies for the house, an outfit for the weekend, a purse, those shoes I saw that I just have to have," Spicer said. "I think if I thought about, and made, more responsible choices that it probably wouldn't be as tight."

What About Savings?

If money is tight when it is rolling in, what if a sudden need arises?

"I'm not sure, you know, that I'd be able to cover an emergency," Spicer acknowledged.

In fact, both families are at risk if there's trouble.

"If there's an emergency, I suppose we would have to hit a credit card or something," Greg Marzola said.

Neither family has saved for their future years or college for their children.

"No, we don't have any savings," Greg Marzola said. "I guess we're shortsighted as far as that's concerned."

Spicer has only about $200 in savings. She is carrying about $10,000 in debt from college loans and furniture store debt. She had to file for bankruptcy in 1999.

Greg and Kari's only savings is his 401(k) plan, which contains $32,000. They have a credit card balance of about $10,000.

They are not alone. Nationally, nearly half of all workers have less than $50,000 saved.

Michelle wants her children to do better with money.

"I say manage it, respect it and it will respect you," Spicer said.

And how does she respect money herself?

"I don't," Spicer said, with a smile. "But that's a 'Do as I say, not do as I do.'"

One reason for the disparity between the two families is simply where they live. If Kari and Greg moved from suburban Maryland to Chicago, they would need about $90,000 a year to afford the same lifestyle.

"I think that I'm going to stay here, and not move to Chicago," Kari Marzola said.

Fixing Financial Missteps

A key piece of advice from Hobson: One of the most important things that families should have is a nest egg.

"You have to have a nest egg, and to do that, you have to pay attention to your spending," Hobson said. "Because if we know anything from how volatile the financial market has been lately, anything can happen. Michelle in Chicago, because she's bankrupt, didn't even have a credit card to fall back on ... And you don't want to ever get in a situation like that."

The families should also start paying attention to what they are spending money on. For example, Spicer was spending $5 a day at Starbucks, where she picks up a coffee and biscotti.

"She's got to eat, but she could take a lesson from Greg in our other family, who takes his lunch to work," Hobson said. "Michelle's already making lunches for the kids, so she can add a lunch for herself."

Mellody's Math: If you add together the $5 that Spicer spends on Starbucks and the $7 she shells out for lunch, it comes out to $12 a day, or $60 for the workweek. It totals $240 a month and $2,880 a year.

If Spicer, who is 35 now, invested that in the stock market, and it compounded at a rate of 8 percent over the next 30 years before she retires, she would end up with a huge amount in savings: $360,365.

Also, she could save $25 a month by purchasing a monthly, rather than a daily bus pass. If you add that to the investment mentioned earlier, she would save even more money: $397,903.

The Maryland family also has a big choice to make: saving for their own retirement, or putting aside money for their kids' college educations. What should they do?

"You always take care of yourself first," Hobson said. "It's like when you're on an airplane and they do the announcement: 'in case of an emergency, put the oxygen mask on yourself first, and then on the small children you're traveling with.'"

Young people have so many more options if they take on debt now, in terms of paying it back when they are older. But if parents put college savings before saving for their own retirement, they will never get back on track for their own golden years, Hobson said.

Mellody Hobson, president of Ariel Capital Management in Chicago, is GoodMorning America's personal finance expert. Click here to visit her Web site, Ariel Mutual