Are You 'Middle Class'? Here's What the Experts Say

It’s likely that you consider yourself to be middle class. Most Americans believe that they are, even though some would technically fall above or below the middle-class line.

For example, some people making a significant income would be considered middle class where they live, but if they moved to another state, they might not be.

So where do you fall? Let’s take a look at a couple of middle-class definitions to find out, and how you can improve your personal finances if you need to.

How some experts define middle class

The Pew Research Center defines the middle class as anyone who has an annual household income that is two-thirds to double the national median income.

According to the U.S. Census Bureau, the national median household income was $74,580 last year. So, if your annual household income is between $49,720 to $149,160, then you may be in the middle class. To find out for sure, Pew has a handy calculator you can use to enter your income, state, metropolitan area, and how many people are in your household. It also adjusts for the cost of living in your specific area.

Pew says that 50% of Americans are middle class, down from 61% in 1971.

But it’s worth noting that not everyone chooses this definition of the middle class. For example, the Brookings Institute says there can be three definitions of the middle class based on how much cash someone has, what their credentials are, and even culture. Here are the three middle-class definitions from Brookings:

  • Cash: This definition may change based on income levels over time, but it’s the general idea that income and wealth define whether a person is in the middle class. Economists likely prefer this set of rules.
  • Credentials: This definition of the middle class is built around educational achievement, qualifications, and a person’s occupational status, according to Brookings. Sociologists may prefer this set of standards.
  • Culture: The middle class in this category is defined by someone’s attitudes, mindset, or self-definition. The Brookings Institute says philosophers and anthropologists may prefer this definition.

There are, of course, overlapping features of each of these definitions. But when you consider all three — and the Pew definition — it’s easy to see why defining the middle class can be tricky.

But there is one thing that most people agree on, even if they can’t agree on a definition of the middle class: The middle class is essential to our economy.

Why the middle class matters

With half of Americans in the middle class, it’s pretty obvious that a healthy middle class would be a good thing for the economy. But here are a few more detailed reasons why a robust middle class matters, according to the Center for American Progress:

  • It fosters human capital development and a well-educated population.
  • It creates a stable demand for goods and services.
  • It helps create the next generation of entrepreneurs.
  • It supports political and economic institutions.

In short, a strong middle class benefits many core parts of the U.S. economy, education, businesses, and politics.

The middle class can still live paycheck to paycheck

Just because someone is in the middle class, doesn’t mean that their finances are in the best shape. In fact, about 64% of Americans live paycheck to paycheck.

If you need extra help boosting your income, here are a few suggestions.

1. Develop a new skill

Research from Gallup, shows that workers who develop a new skill earn an average of $8,000 more per year than those who don’t.

2. Pick up a side hustle

Many people have experience and talents they’ve honed that can be used for side projects. Some lucrative side hustles have been made even easier by incorporating artificial intelligence.

3. Find a way to create passive income

As legendary investor Warren Buffett once said, “If you don’t find a way to make money while you sleep, you will work until you die.” Investing some of your money is one good way to do this, but even renting out a room in your home is a good way to generate passive income.

And if you need some additional help managing your money, you may want to consider trying out one of the top budgeting apps. A budgeting app can help you figure out where your money is going each month and help you set financial goals like saving for a house or building an emergency fund.

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