Lower, Middle, or Upper class

[tripods68]

Where does your household rank in this category?

To me, it depends where you live. If you live and work in Palo Alto, CA and making over $200K a year job would be considered poor middle class given the high rent and cost of living. But take that same salary to Nebraska, you might feel rich right. So what income level do you consider yourself comfortable enough that you can afford to "live a little" minus household debt and retirement contribution? We live in Northern California (Sacramento) with a combined household income last year ($140K) but no where near what you would consider middle class because of our mortgage debt, raising two kids, 1 car payment (2 years remaining), and home loan. Although we are saving about 25% of our income towards retirement, EF, pension contributions, ROTH, and 529s, we don't have enough money leftover to indulge on other things (like drive nice car, or trip to Europe). Instead, I drive an old commuter 1995 Nissan Altima with a busted antenna. Hey, at least I paid cash for it

[Snave]

I would say we are middle to upper middle class from an income to comfort level perspective. We also live in Ohio so our money goes farther. I say we are in that category b/c we also live below our means. Even though we live in a place that is not as expensive, we could overspend, but choose not to. We like the comfort of knowing that we could have more than actually having more. That is why I put us where we are.

[Seeker]

We live in Northern California (Sacramento) with a combined household income last year ($140K) but no where near what you would consider middle class because of our mortgage debt, raising two kids, 1 car payment (2 years remaining), and home loan. Although we are saving about 25% of our income towards retirement, EF, pension contributions, ROTH, and 529s, we don't have enough money leftover to indulge on other things (like drive nice car, or trip to Europe). Instead, I drive an old commuter 1995 Nissan Altima with a busted antenna. Hey, at least I paid cash for it

I'm deliberatly ignoring the question, because in truth, I have no way to quantify this for ourselves.

The difintion of "Middle Class" according to Wikipedia:
Middle class - Wikipedia, the free encyclopedia

The definition does not help me define "classes" either. Seems to be partially a state of mind?

But I would submit that you with the ability to save 25% of your income for retirement, are better off than many, many other people in America today. Someday too, your mortgage will be finished; how many people still rent? And someday your children will be grown and on their own.

Seems like you're making a choice to save for retirement and not spend all you earn.... unlike your neighbors maybe?

$140k per year is a good chunk of income. True, it may not seem like a lot when you consider your debts.... but you probably cannot make that income in another state where the cost of living is lower. California has it's plusses and it's minuses, but when you do retire and your kids are grown, you can go wherever you like.

If you really want to do a vacation in Europe one summer, go for it.

Life is only lived once, and you seem to be reasonable about spending. One year, do a little less than 25% for retirement and plan a vacation that you and your family will enjoy. You don't have to compete with others; and you should enjoy some of the benefits of earning that income too.

[atomicrc11]

I entered the work force 3 years ago and at this point in my career I feel middle class. I live in Boston, which is a high cost of living area, but we minimize that by having only 1 car (we have the one only because I need it to get to work), take public transit when we can and watch what we spend. I rent and plan on renting for quite some time. My salary is just around the median for the country, but I feel like I am able to do everything I want. I am saving for retirement, go out to dinner once a week, go out on the weekends. It all comes down to how happy you are with your situation.

In reply to seeker's comment about renting, the statistics are interesting. The highest rates of people renting are the very low income, the renting rate dips through the middle class, and when you get to the upper middle class and the rich, the renting rate goes back up again. I feel that owning a home is like losing money. If the value of the house doesn't go up in line with inflation, you're already losing money. Plus you have to pay for taxes and repairs. With rent, I'm not investing my money, but the money I would have put into my home that isn't appreciating at a high rate is now in the stock market hopefully earning more. Now, I'm not saying that one shouldn't own a home, I plan to once I find a place I want to own a home and know I will be there for a long time. However, the fact is, a house should never be part of one's portfolio because most likely it will not keep up with inflation and at the current time, the values on average are going down. If you want to own a home, then by all means do it, but don't say that people are wasting their money on rent. In many cases it makes financial sense to not own a home.

[PrincessPerky]

if you define middle class as making a middle of the road amount for your area..with OT we are the bottom of that (Charlotte NC) without OT we are just under it.

If you define it as having some splurge money each month without needing debt to do it...we are there with OT, and just under without (thank goodness he always gets some!)

I know some folk look at their total income and wonder how on earth they can make soo much and still be just barely getting by...for some it is the area, for others it is looking at it wrong.

Try looking at your budget for what is really a need and what is a want...you may be surprised if you take a hard look at how much you are spending at wants....now if you decide those wants are worth more than saving for a trip to Europe, keep em...if not, try dumping or cutting back.

IMO for peace of mind, we need to see the internet at home as a luxury...along with a gas bill that does still cover my SUPER hot showers, and the electricity to goof off on a computer or TV for at least an hour a day..those are not needs, so my whole electric bill is NOT a need, it is part need, (stove is electric) part luxury..so long as I see it that way I know I am living the good life... meaning I have enough money to spend needs and on some luxuries, without going into debt. Not enough to do whatever I want whenever I want, but short of a movie star or MVP foot ball player, most don't. I am ok with that.. After all I don't work on Christmas, and getting pregnant wont ruin my career...

[Caoineag]

Ooh very subjective idea.

Well, I came from a lower class family (in an upper middle class neighborhood) and my DH came from an upper middle class family (in an upper class neighborhood) and we are both in the middle class strata and will probably end up in the upper middle class strata.

As to where we feel we are, I feel rich because we have so much and my DH feels poor because he can't buy me everything under the sun, lol. Seriously though, necessities only make up 33% of our budget so I think we are in very good shape (even current credit cards only bring that use up to 45%).

[jIM_Ohio]

I am in same camp as Skeeter- I will dodge this some.

Based on income and state of residence, I believe we are in top 25%-50% of income makers in country (based on gross income). I plan on doing taxes this weekend, so I will update this if I find out otherwise.

I make sure we live as a middle class type situation, even though I know income wise we are doing quite well relative to most. We save close to 15% right now, so that "lowers" whatever class our income puts us in and assures we stay in that class during retirement.

One thing I see going on around me is more people want to be in the middle, and do overzealous things to stay there in other people's eyes. The people who are comfortable there are not easily seen.

We don't eat out much
We hang out with each other and do wierd things- like drink beer and enjoy company over a campfire on a 30 acre piece of property which was bought and paid for a long time ago.
We enjoy the finer things in life once in a while to treat ourselves, but our lives would not be empty if we missed this or that stage play, this or that concert, this or that whatever.

[vsjhoc]

Also from wiki (when did it become the official source?!) is this very interesting set of data about household income.

Scroll about half way down to "Social Class." There are different models shown that are more comprehensive than just upper, middle, and lower classes, based on occupation, education, and compensation:

1. Capitalist, upper middle, lower middle, working class, working poor, underclass

2. Upper, upper middle, lower middle, working, lower

3. Super-rich, rich, middle, working, poor

[maat55]

I've heard the national househlod income is around 41000. Making three times that makes you at least upper middle class. Here's some news for ya, your RICH, if you make over 45000 a year, you are in the top 1% in the world. Class depends on who you are counting, but in reality, as humans, you and I are wealthy.

[tripods68]

I came from poverty background. I had to put myself through college to bring our income up to this level along with my wife's income. There were many times we thought of us leaving California, but just couldn't muster the energy. Our jobs, extended families, relatives, and friends are all here. We don't have any clue what would be our lives if we lived outside California, except when we travel for vacations. Plus we love our weather and hate snow. The thought of starting over someplace else; meeting new friends, new school, and environment is very hard. By every measure, we are probably on the lower end spectrum of the middle class. I think a true Middle Class for us when kids our grown and no longer need our support and we paid off our mortgage completely. Then we could enjoy our golden years after that. But that's a long ways away.

[zetta]

I've been wondering for awhile -- what do the folks who are between poor and middle class call themselves and prefer to be called by others? Working class? Lower middle class? Blue collar? Do they see a distinction between these terms? (Although my grandfather had a blue collar job, he definitely considered himself middle class.)

What do you consider to be the dividing line between working class and middle class? Between middle and upper middle?

As a generalization (noting that there are always exceptions), here's how I break it down:

* poor -- struggling to provide food and shelter, possibly uses rent assistance, food stamps, or welfare
* working poor -- working and able to provide the basics, renting, home ownership is out of reach
* working class/lower middle class -- owns home or could own one after years of saving, works in jobs that don't require a college degree, kids probably take out loans or grants if they go to university
* middle class -- owns home, job typically requires a college degree, kids go to public university (with or without loans)
* upper middle class -- owns home, job in the professions or corporate management, can afford to pay for kids university if they choose to. Generally just more expensive standard of living than middle class -- higher-end clothes, cars, and vacations.
* upper class -- able to derive enormous incomes from wealth rather than work.

Edited to add the upper middle class professions according to wikipedia:

[Upper middle class people] have not only above-average personal incomes and advanced educational degrees[1] but also a high degree of autonomy in their work...Most people in the upper-middle class strata are highly educated white collar professionals such as physicians, lawyers, economists, planners, university professors, architects, psychologists, scientists, engineers, dentists, pharmacists, high-level civil servants and the intelligentsia. Other common professions include corporate executive and business owner.

By this standard my mother's parents were lower middle class, my parents started out middle class and later became upper middle class, and we are upper middle.

[MonkeyMama]

I think there is a lot more to class than income.

I mean, we are also in Sacramento and find $75k income to be very middle class. But there are many reasons why. For one, we only live on one income. which erases a lot of the insane taxes on the second income. I find people always assume I make way more or likewise that we live way beyond our means. No, we just play our tax cards right. I don't see the point of us both working full-time down the road, just to fork it over to the government. But that has been especially true with young kids and daycare considerations.

Also, many people around here the last few years paid 2-3 times as much for 1/2 as much house. So we have quite a leg up in that regard.

But reminds me of dh's cousin who did not graduate college. HE bought a home around here for $100k in 1999 (virtually unheard of since then, in california). He now has a paid off house and drives a Corvette. He never made much money - I would guess $30k-$40k (which is not much for out here). But he eliminated the most expensive thing in the area in his 20s - rent/mortgage. With no family to support he lives quite the lifestyle on little money. OF course, I think his education and job preclude him from being true upper middle class. Likewise, he probably will have more struggles if he never gets a degree.

But you can see that someone could do quite well on very little here. & many many are struggling on "high" incomes. It's all relative. There are going to be a lot of factors. If you are young you are pretty doomed. I am from San Jose. Houses had appreciated 1000% in the last 30 years. No signs anywhere of any slow down... We gave up pretty quickly trying to afford living there, in the lat 90s. It was just crazy. Sacramento has gone much the same way since we moved up here.

[Scanner]

I am fighting with colleagues on this arguement in our closed forum. Typically my colleagues are very, very Conservative.

I'm like the last hold-out moderate (yeah, many here may actually consider me Conservative but to them, I look like Karl Marx, they are so far right)

To give you an idea, they think inheritance tax should be abolished, think they pay too much taxes, and are only moderately concerned about National Debt.

My position is that gov't policy has to be drafted/geared towards middle class.

I think our country went terribly askew when Reag-o-nomics (Reagan is the Conservative hero for some oddball reason) said we need to cater to the Superrich because "they create jobs."

Yeah, they do; I acknowledge that. I am not saying I am totally against corporate welfare and corporate hand-outs. I understand politics and how it works to a certain extent.

I just think it's gotten way out of control and left the middle class behind. Yeah, the Superrich create jobs. . .but Donald Trump creating 100 more waiters and busboys isn't exactly what I think entitles him to a plethora of tax incentives.

It's a great summary of the middle class there. I would only add the middle class is very, very important for 3 reasons.

1. They are a tax base (argueably the largest or second largest)
2. They are our military reserve (the rich and poor don't fight wars to protect our country - the army generally doesn't want indigent and the rich get out of it)
3. They are a moral repository (the middle class generally defines American values, not the poor or rich)

Why would you want to shrink those 3 assets of America and expand the poor or even the rich?

Personally, I'd give up the aspiration of becoming rich in trade for a little more feeling of security in todays climate.

[getrichslow]

Scanner,

Exactly what point are you trying to make? Are you thinking someone is trying to get rid of the middle class? Some real example would further your argument.

Do you have a source for your comments about the rich and poor not figthing wars or the "middle class" having some extra level of moral authority?

Also, the term is "Reaganomics". It has supporters and opponents and can actually be very interesting to debate. But to boil it down to "cater to the super rich" either tags you as an mindless ideologue or someone who hasn't done their homework. As for your Reagan quote, please list your source.

At the risk of being rude, your post is not well written (actually I think that was a kind assessment).

For the person who started this thread, excellent job of saving and investing! Your fiscally sound ways may make you feel less than middle class but if you are able to put aside 25% of your gross you are middle class and then some.

[sweeps]

Also, the term is "Reaganomics". It has supporters and opponents and can actually be very interesting to debate. But to boil it down to "cater to the super rich" either tags you as an mindless ideologue or someone who hasn't done their homework. As for your Reagan quote, please list your source.

At the risk of being rude, your post is not well written (actually I think that was a kind assessment).

That was rude. I think a reasonable person could come to the conclusion that the Reagan era (and supply-side economic policy in general) is a boon for the rich while the poor and lower middle class fall way behind.