7 Key Signs You’re Truly Middle Class — It’s Much More Than Your Paycheck
Written by
Nicole Spector
Edited by
Cory Dudak
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In recent years, defining the middle class has become a slippery issue for economists. That’s largely because the income range that institutions use to define this cohort is so broad.
According to the Pew Research definition of middle-class income being two-thirds to twice the median income., a household of four earning between roughly $52,000 to $156,000 a year is considered middle class. However, that’s a pretty big wage gap as you can do a lot more with $156,000 than you can with $52,000, surely. And then, what if you’re making $100,000 in, say, West Virginia, while another family is making $70,000 in San Francisco?
To define the middle class solely by income range is weak and unreliable, because there are just too many other variables to consider. Here are some signs you have landed yourself squarely in the middle class.
The Majority of Your Net Worth Is Attributed to Your Home
One of the biggest chunks of your monthly expenses typically falls under your rent, mortgage or housing payments. So whether or not you are considered middle class is largely determined by the context of where you live and the cost of living.
The most obvious marker of someone who’s middle class is if the majority of their net worth is tied up in their home. Simply put, if your home makes up around 80% of your assets, you likely find yourself in the financial middle. This is especially true when you have high mortgage payments or property taxes, as that keeps you from growing your wealth steadily. But hey, at least you’re not paying rent.
You’re Not Renting
If the amount owed on a mortgage signifies whether one is middle class, what does that mean for renters? It means, usually, that they’re beneath the middle class or on the lower end of it.
This also depends on where you live, though, and the housing market in your area. Even a middle-class income may not be enough to buy a house in some places.
You Have an Emergency Fund
However complex the issue of defining the middle class may be, some indicators of this status are almost obvious. For instance, in an emergency, most of those in the middle class are financially prepared enough to handle it.
So, if you have at least some savings set aside for unexpected expenses such as job loss or medical bills, it is a middle-class status symbol of sorts.
You Have an Investment Strategy
Earning and saving money are important, but if you can invest it as well, this is a key sign you’re in the middle class.
This means that not only do you have a sufficient salary, but you can also live comfortably with a higher risk tolerance. Knowing it takes more than a savings account to grow your retirement fund, and investing as such, is a crucial factor for this social and economic class.
You Have the Confidence To Quit
Those who participated in the phenomenon dubbed “The Great Resignation,” wherein they quit their jobs for another, may also be considered middle class. This is not only because they had the luxury of being able to quit, but because they recognized that they had only themselves to rely on.
If you feel the freedom to act on job dissatisfaction by leaving your current employment, that confidence typically stems from a middle-class core.
Debt Isn’t a Stressor
Another factor to consider when assessing whether one is middle class is how affected they are by debt. Everything from student loans to car payments can make growing your wealth difficult, but if you are covering your cost of living and then some, you are probably comfortably in the middle class.
You Can Afford College Education for Your Kids
If you have the ability to provide a college education for your children, that’s a pretty solid indicator that you exist within the financial parameters of the middle class. In fact, being able to afford higher education in general is a sign of that status.
The expense of a college education for a child can range from the low tens of thousands to hundreds of thousands of dollars, depending on the university, so this is no small financial feat.
Caitlyn Moorhead contributed to the reporting for this article.
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