Adapting is the name of the game in today's economy. By Janet Bodnar, Editor-at-Large From Kiplinger's Personal Finance, July 2014 As a monthly magazine, our job is to go beyond the headlines and interpret what the news means for you, our readers, and tell you how to cope. This month, we tackle two hot-button stories: the plight of the middle class and the new health care law. See Also: Making It in the Middle Class The genesis of senior editor Jane Bennett Clark’s piece on Making It in the Middle Class was an e-mail from Kendra Gerker, a subscriber from Van Wert, Ohio. Kendra wanted to see "more articles aimed at the true middle class—those of us making and getting by on $65,000 a year." When I spoke with Kendra recently, I was impressed that she and her husband, Eric, are getting by pretty well on their own. Kendra, 32, is an administrative assistant; Eric, 33, is a production worker for Eaton Corp. and coaches boys’ soccer at a local school. Married for a little over a year, they own a house and have an emergency fund to cover six months’ worth of expenses. They each contribute 10% of their salary (including the employer match) to their retirement plans, in which they’ve already amassed a little over $100,000. “My biggest worry,” says Kendra, “is how to budget when we add kids to the mix.” In particular, she wonders whether they should save for retirement or college. Advertisement As Jane points out in her story, retirement is always a priority. But the Gerkers already have a comfortable head start, so they can probably divert part of their savings to college, as long as they continue contributing at least enough to get their employers’ retirement match. Their ace in the hole is living in an area with a low cost of living. (See our slide show 10 Cheapest U.S. Cities to Live in.) Kendra took an $8,000-a-year pay cut to move from Columbus, Ohio, back to Van Wert, near her hometown, but even after paying for food, gas and other expenses, she still pockets $100 a month more than she did in Columbus. That’s not always the case. In her story, Jane profiles another middle-class couple, Bridget and Dave Rudolph, who live in the pricey San Francisco Bay area. As Jane writes, “If you’re making a middle-class income in a high-priced area, you have to make choices.” The Rudolphs have learned how to adapt by, among other things, refinancing their mortgage, slashing expenses and chipping away at credit card debt. “We’re heading in the right direction,” says Bridget. Beyond the numbers. Adapting is the name of the game in today’s economy. That’s especially true for people affected by the new health care law—which is just about everyone. The news outlets have been fixated on Obamacare enrollment numbers. But in her story Solutions for 3 Health-Insurance Challenges, contributing editor Kim Lankford reports that the real news is what happens when people who were previously insured start to use their new policies and encounter shrinking provider networks, ballooning deductibles and high drug costs. And Kim notes that the new world of health care affects everyone, whether you buy insurance on an exchange, directly from an insurer or through your employer. My husband is a case in point. When his employer was looking for an affordable small-group plan that was in compliance with the law, it settled on a high-deductible policy to keep premiums about the same. As a result, John’s deductible jumped from $200 a year to $2,600, in line with plans on the insurance exchanges. Until he met the deductible, he had to pay $240 for a prescription drug that required only a $25 co-payment under his old plan. Advertisement To cope with the additional outlays, John set up a health savings account, which Kim recommends in her story. Ever resourceful, he also calls ahead before he has a medical procedure to find out the cost so he can budget for the expense. And he recently asked if he could pay in installments for an expensive procedure. The doctor agreed.