Who are these people living on $40k/yr, and what size cardboard box do they live in?
$37k mortgage $15k bills - electric, water, Internet, car insurance, cell phones, etc. $15k - food, gasoline, clothing, haircuts, other "necessities" (many of which are not)
Then of course there's vacations, Christmas/birthdays, and unexpected large purchases (e.g. the out of warranty laptop broke), so maybe add on another $10k?
But we could also easily tighten the belt a bit and cut those bottom 2 items to $20k with only a little bit of pain.
When you're walking home after taxes with $175k/year you definitely get a little flabby on what should be sensible cost cutting (e.g. I'm sure I'm paying a few hundred dollars a year for streaming/subscription services I don't use enough to justify, but it's not worth the hassle.)
We are of course extremely privileged to not have any major medical issues, a good support system for child care, 2 work from home parents, and to have somehow avoided most of the crazy tuition hikes of the 21st century.
Which is >100k/year before tax which is well above median household earnings.
That’s not even counting the portion that comes out of my check.
I could easily drop 20-25k from that spending if we didn't have kids - in fact, at the time I had my first kid, my mortgage was $24k/year, my bills were nearly 40% lower than they are now, and I didn't track food and clothes budgets back then but even if they were 80% of present day levels (I suspect it was much lower) that'd put us right around $40k/year.
But I also am on the real estate property ladder, so I think it'd be foolish for me to spend any less of our income on our housing than I do, so counting it as pure "expenditure" is a bit misleading.
Also since someone asked this year I paid $2,200 in healthcare distributions on top of $750 annual premiums.