6 SIGNS THAT YOU’VE MADE IT TO THE MIDDLE CLASS

According to almost every statistic and survey on the subject, today’s middle class has become a disappearing breed. It is still difficult to define “middle class”, despite all the attention given to it. Everyone wants to be middle-class, regardless of their income. Let’s not focus on the dollar, but instead, let’s look at six lifestyle criteria that define middle-class status.

Do You Consider Yourself Middle Class?

In an attempt to define the middle classes, a wide range of numbers has been used. You should also consider the fact that Americans have a wide range of opinions about what constitutes the middle class in terms of income.

According to Northwestern Mutual’s 2018 Planning and Progress Study, 68% of Americans consider themselves middle-class. The majority of Americans (78%) feel an annual income below $100,000 to be middle-class. 52% think it is between $50,000 and $99,999, and 26% believe it is less than $50,000.

Six Signs That You Are Middle-Class

Although there is no financial standard, the Obama Administration’s Middle-Class Task Force defined the U.S. middle class in six ways that still apply today. These can be viewed as benchmarks. You are most likely to be at least part of the middle class if you can tick off all six points: 2

1.Homeownership

The American Dream of owning a house is still possible. Renting to owning is a step towards success and accomplishment. The ability to reach this goal is dependent on where you live.

2.Owning a car

A car gives you freedom and allows you to avoid the cramped spaces and tight schedules of mass transportation options like buses and subways. Again, the cost of cars can vary greatly depending on the type of car you need. A used Hyundai is sufficient for one driver. A new BMW is the best way to achieve this goal.

3.A college education for the kids

Middle-class families have a primary goal of helping their children succeed in life. The cost of a college education can range from the low tens to thousands of dollars to hundreds and thousands. The price tag will be affected by the college or university where your children are enrolled.

4.Retirement Security

Nearly everyone dreams of retiring. It is a sign of success and a reward for years of hard work. Again, the definitions matter. The amount of savings required for your later years may vary depending on whether you are considering a staff of 10 at a villa in France or a Peoria, Ill. townhouse.

5.Healthcare Coverage

For middle-class wage earners, the ability to access healthcare is a crucial goal. Healthcare coverage is a vital need due to the rising costs of healthcare and prescription drugs. It could have severe financial consequences if you are seriously ill or injured.

6.Family Vacation

A family vacation is a staple of middle-class life. Vacations show that a family has available income and is able to spend time on leisure.

What happened to the Dream?

According to a report released by the Pew Research Center in September 2018, approximately half (52%) are part of the U.S. middle class. 

Technological advances and globalization began to reverse the rise of the middle class. The United States manufacturing base changed as high-paying jobs in factories and heavy industry moved to lower-paying countries, and labor unions lost much of their bargaining power to obtain good wages.

Later, jobs offshore replaced white-collar positions such as data entry and accounting. Computers and other technological advances that improved productivity eliminated many jobs that were still available in the U.S.

Many households were forced to become two-income households in order to maintain or achieve a middle-class lifestyle. It became harder to attain middle-class goals when employers stopped providing defined-benefit plans. The cost of college continued to rise, and so did the price of healthcare. 

How to get there

While there are many obstacles to middle-class status, there is a way to make it happen. Budgeting is the first. It is possible to determine the exact composition of the benchmarks that you are trying to match by understanding where your money goes each month. You can also use it to control your spending. Not a BMW.

Another important step is planning. Is the child going to a public college or a private school? Scholarships are an option. Many families are savvy enough to find the funds to send their children to college through programs that help them.

Another requirement is to work. You might need to find a second job or start a business that will help you achieve your goals. It is essential to put your money to use. Investing has been a way to build wealth over the years.

The bottom line

There is no standard financial definition of what makes up the middle class. It’s about living a high standard of life, including owning a house, having the ability to pay for college for your children, and having enough income to go on a family vacation.

Although many studies have shown a decline in the middle class, this demographic is still about half of all households in the U.S.