Middle class

Xstatic3333 · March 2014

daisy662 said:

Sisugal said:

Being rich and feeling rich are two different things.
Also remember -- you can outspend any income.

True i suppose, but we don't outspend our income by any stretch of the imagination. We certainly aren't living paycheck to paycheck and are able to have a nice house and 2 nice cars that are paid off along with other nice things. But, I think of rich as not having to think twice before making a semi large purchase ($5000?). I have to really sit and think about buying something for even a few hundred. Maybe I'm just cheap Lol!

Or to phrase it more nicely, responsible

Totally agree with Sisugal about outspending any income. When you see people with fancy cars and houses, there's no way to know what their bottom line looks like.

cloudymeatballs · March 2014

I hear ya. What a change. Just a few years back I was thinking 100G was living large. Lol, we make just over that, live in Southern California and we make it and are able to enjoy things, but also need to watch our spending. No children yet and I wonder how we will do when we do. We own a house and own 2 cars, one paid off. Live in an okay area, but would love a larger home. As of now though, we don't have the money to move. Living here is so high its insane. Lol, I would have considered 100G upper, but now, ya I see us more as middle class. We are far from rich, way far from rich, but we live well... I would consider us rich if we made over 300G Goodness how money has changed over the years. Now I feel old..

JuneMrs · March 2014

We make about 120k a year and I feel like we are on a tight budget all the time. By the time we pay for health insurance, 401k, savings 529s for the kids, etc. there's just not a ton left. I think the middle class is just gone!

CCinLove · March 2014

JuneMrs said:

We make about 120k a year and I feel like we are on a tight budget all the time. By the time we pay for health insurance, 401k, savings 529s for the kids, etc. there's just not a ton left. I think the middle class is just gone!

I get what you mean, but I just think that the middle class has changed. Our parents making the same income would have been much better off because only recently have people been expected to pay their own health insurance, save for their own retirement, and pay increasingly higher tuition for their children's college. Add to that the exorbitant student loans that many of us have and daycare, and middle class is just a different ballgame from what it was in the 60's, 70's, or even 80's.

Personally, $250k is rich regardless of where you live. You may not feel rich because of all of the things I already noted, but people at that income level are in the top 5%. If your household has more income than 95% of the rest of the country, you're rich even if you don't fly a private jet. The ability to save for retirement, college, emergencies, etc. separates the middle class from the lower class IMO. If you have enough money to save and build wealth after paying for a decent lifestyle, you're doing very well.

lifeonthehill · March 2014

WOW! Our salaries got us $38,000 last year. Granted the school pays all our bills except our car ins, student loan payments and cell phone. We have been incredibly blessed and have managed to save a lot and pay off over $16,000 worth of SL debt in a year.

I feel like we are middle class based on what we have paid for us by the school and how much we are able to accomplish with what money we have. But realisticly we are in the low end of lower middle class.

sillygoosegirl · March 2014

I'd consider $50K-$80K middle class. I'd consider $80K+ upper middle class, and $150K+ wealthy. Just because it isn't jet money and it's easy to spend in all, doesn't mean it isn't a lot of money. I think our generation is very entitled to think that SFHs, new cars for each adult, going on vacation, paying for college, etc = middle class. If you can afford all those things, or even just several of them, you're really priveleged... Even if you have to budget carefully and clip coupons to

Something that isn't talked about so often is how the hours worked to earnings impacts the equation. I knew a man in California whose family income was $85K/year, but he had two jobs and his wife worked full time too. That seems middle class to me, where as one spouse working full time and the other being home with children seems upper middle class (much more time to save money doing things for yourself, plus more financial stability since the family isn't already stretched to the limits to bring in their income).

hoffse · March 2014

I once read a study (can't find it now, sorry) that concluded that more than 90% of all people surveyed - at all class and income levels - believed that if they made just 10% more than their current income their lives would finally be comfortable. Given that incomes have a spread of hundreds of thousands of dollars, that's a pretty profound conclusion.

The funny thing is, I can see how that would be the case. I changed jobs a couple months ago and got a 20% raise. Things felt comfortable for a brief moment until I decided to increase savings, debt repayment, etc. Now it feels tight again, and if I had 10% more to spend, I would feel more comfortable.

I consider the middle class to be in the $60K-$120K range, upper middle class maybe $120K-$200K, and anything over that is wealthy because of diminishing marginal returns - in that the more money you make, the less one extra dollar is worth to you. But that's across all age groups. When breaking down by age groups, my numbers would change a lot.

Out of my graduating high school class (public, southern school with 210 person class), I probably have the highest or second highest income of everybody I graduated with. I'm fairly certain I will have the highest household income by a wide margin when H starts to work in September. So compared to people of a similar age, background, upbringing, and geographic region I should be in the top 1-5%... or "upper class." But I make just over 6 figures on my own. Compared to other groups, I would be middle class. Maybe upper middle class.

Remember age matters a lot. 20-something usually make a LOT less than 40-somethings in the same field.

Really interesting discussion, though.

katlizabeth · March 2014

I don't think you can separate middle class lifestyle and middle class earnings...which to talk about a monetary middle class, you need to. We make about 90,000 and live in a what I think is MCOL and I feel like we're in the upper middle class. We have a mortgage on our house and a second property, and no other debt. We own two cars, have an emergency fund, and fund our retirement. I feel like to be able to do all these things, we're better off financially than so many other families. Our actual spending money isn't that much...and I agree with pp, I have to contemplate any large purchases, well, almost all purchases. But I feel like we don't/can't spend a lot because we prioritize all those other things, not because we're middle class or lower middle class.

MommyLiberty5013 · March 2014

Some of the wealthiest people don't appear wealthy or rich at all. I once read that the average millionaire still buys $200 suits and drives an average car for a long time.

We gross over $110k. My perspective is that we are upper class. However, we drive old cars (our newest is a 2005) and I buy my kids' clothing from consignment stores. I care about coupons and waiting for sales. We also bought a home well below what we could afford.

I think there is a difference between being rich and being wealthy. I think someone who is wealthy is SMART with their money no matter how much money they have. Someone who is rich just has a lot of money and flaunts it without any prudence or responsibility.

Xstatic3333 · March 2014

MommyLiberty5013 said:
Some of the wealthiest people don't appear wealthy or rich at all. I once read that the average millionaire still buys $200 suits and drives an average car for a long time.
We gross over $110k. My perspective is that we are upper class. However, we drive old cars (our newest is a 2005) and I buy my kids' clothing from consignment stores. I care about coupons and waiting for sales. We also bought a home well below what we could afford.
I think there is a difference between being rich and being wealthy. I think someone who is wealthy is SMART with their money no matter how much money they have. Someone who is rich just has a lot of money and flaunts it without any prudence or responsibility.

This is all so true! I read somewhere that Warren Buffet drives used cars.

I also like to think that no matter how much you make (over a certain threshold) you can still feel wealthy by retirement if you're smart, and lucky enough to avoid expensive emergencies of course. I'd define that feeling as having some money to help me kids get started out, either while we're here or as inheritance. My parents did help me a lot, which I know not all families try to do, but it made me feel like I owe it to our future kids to try to do the same. That's why I keep shoveling 15% into my Roth even though I really want to just focus on our house fund.

ta78 · March 2014

Wow. We make around 75k a year and I would have never considered us to be low income. It does depend on where you live I guess, but still. We live outside of Seattle, so not as HCOL as being in the city, but higher than other parts of the country it seems. I feel like we live comfortably, which is why I'd put us in middle class.

I also feel that 250k makes you wealthy regardless of where you live.

goldiemu · May 2014

I live east of San Francisco and making less than 100,000 per year plus saving for retirement and an emergency fund and paying all your bills doesn't even allow you to afford a house. It is SO expensive and I commute over 3 hours a day to get to my job in the city so I can afford to live here.

So, I would say that middle class here is making at least $100,000 per person.

juliebeannn · May 2014

cbee817 said:

I feel like $50 - $100 is lower middle class, $100 - $250 is middle class, $250 - $750 is upper middle, and $750+ is wealthy. I don't know where I came up with those numbers, but that would put DH and I at middle class, which seems right to me.

This. DH and I live in a suburb a stones-throw from NYC and we together make around $135k. I consider us middle class. Many of our friends who work in finance in NYC, make our combined HH income, as individuals (bringing their total HH income to $250k+).

The $ amounts that would be considered middle, upper middle or wealthy is totally relative to location. Just my 2 cents.

short+sassy · May 2014

juliebeannn said:

cbee817 said:

I feel like $50 - $100 is lower middle class, $100 - $250 is middle class, $250 - $750 is upper middle, and $750+ is wealthy. I don't know where I came up with those numbers, but that would put DH and I at middle class, which seems right to me.
This. DH and I live in a suburb a stones-throw from NYC and we together make around $135k. I consider us middle class. Many of our friends who work in finance in NYC, make our combined HH income, as individuals (bringing their total HH income to $250k+).

The $ amounts that would be considered middle, upper middle or wealthy is totally relative to location. Just my 2 cents.

So much this! I look at middle class as more strictly black and white. If someone earns within 10-20% of the average income for their area (not the whole USA), they are middle class. Over that is upper middle class. Double that is rich. And so on and so forth. There can be exceptions to this.

People who are good savers can bring themselves up a class and people who are poor savers can bring themselves down a class.

I read a very interesting article a few years ago about the psychology of money, spending, and saving. This goes a bit to what hoffse was saying. In the study, they followed people of all different income levels for (I think) 20 years. What they found was, no matter how little someone made or how much someone made, their spending/saving patterns were about the same. For example, if they started their young life making minimum wage and living paycheck to paycheck...even if they were making a high six figure income 20 years later...they still lived paycheck to paycheck. Their toys, cars, and houses were sure a lot better. But they were still buying to just barely keep up with their larger income.

Same with the other side of the coin. People who were savers and regularly socked away 10-20% of their income, would still sock away money even during very lean times.

Don't get me wrong, I don't think it is quite all "destined" like the article made it sound. I think people can make conscious choices to go against their money psychology. But I can see where it would take more effort for someone who is not naturally a saver to make those changes.

Middle class

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