Explains practical signs that may indicate someone is not truly middle class despite common assumptions.
Money vanishes
Many people believe that if they’re able to pay their bills, they’re doing alright. If your savings account is simply a holding place for money until you purchase your next gadget or vacation, you are not middle class, you’re high-income broke.
The real hallmark of middle-class standing is having savings that can keep you afloat for a while in an emergency.
If every dollar you make beyond your bills gets spent by the end of the month, you are lacking the “secure” part of being middle class.
Lifestyle Borrowing
Don’t lie to yourself with debt. Don’t use debt to act like you’re wealthier than you really are.
If you’re financing your groceries or your little pleasures with interest payments, you are not middle class. You’re just poor with good credit.
Eliminating lifestyle inflation through debt is the only thing that differentiates the majority of people who aren’t living paycheck to paycheck from the minority who are.
You can’t handle sudden financial emergencies
Things are going great until your check engine light comes on. All of sudden you’re shaking like a leaf. If you don’t have wiggle room in your budget for a $500 car repair or unexpected medical bill, you are not middle class.
Middle class means you’re comfortable. It doesn’t mean you look a certain way. Yes, things like this suck. But they shouldn’t make you panic or run out and borrow money. If a flat tire requires you to borrow cash, you’re likely living on the edge financially.
You don’t invest or plan for the future
You know how you’ve always heard “middle class” defined by the word “earning”? Turns out it’s actually defined by the word “planning.”
You can feel pretty high class eating dinner at a fancy steak house when you can afford it, but if you have no investments, that high class lifestyle is only an illusion.
Most middle class families plan to skim off a portion of their paycheck for later, even if it’s only a little bit.
If you spend every last penny you earn the second it lands in your hot little hand, you live in a world of “now,” which is the antithesis of middle class.
Your job controls your life completely
Facts are stranger than fiction. The term middle class used to refer to someone who had a career, not merely a job. There is power in career. A job powers your paycheck.
If you can’t envision yourself living life without that exact same amount of money deposited into your account every other Friday, then you are middle class with a big mortgage.
Stability means you can change positions or even be temporarily unemployed without your world collapsing around you. If your job has you completely in its grasp, you could be on shaky ground.
You chase trends instead of essentials
Many believe that in order to gain entrance into the middle class, they must own certain brand-name items. People start chasing after specific cars and watches, believing they have to own them.
However, if you purchase items solely for your neighbors and/or coworkers to believe that you have “made it,” you are hurting yourself. Being middle class is about functioning, not putting on a show for others.
You lack health security
Financial experts will often tell you that there is one thing that affects the middle class more than anything else: being under-insured. Cover yourself first.
If you lose sleep over a $1,000 doctor bill, your finances are not as strong as you believe.
Middle class is a state of mind, but part of being middle class is being prepared. You should care more about your health insurance than your designer goods.
You don’t have control over your time outside work
Many believe that if they bring home a paycheck, they’ve made it. However, if you’re scrambling for overtime hours or working your side hustle just to survive; you are not middle class, you’re an exhausted laborer with a better car.
Middle class is the luxury of being able to turn down overtime. If you work weekends just to call it something else, you don’t have the “free” in freedom.
You rent more than you own
Between a leased car, rented furniture, and a slew of subscriptions, you’re not actually accumulating assets. Sure, you might look like you have it all together, but there’s nothing being built behind the curtain.
Middle class is about accumulation. It’s not just about what you can buy today. If you are always paying for everything on a monthly basis, you are just middle class living the lifestyle, not building it.
Your social circle shapes how you spend
You may believe that your financial decisions are yours and yours alone. However, your peer group affects you more than you think.
If your friends are eating out frequently, constantly upgrading technology, and flexing online, it eventually becomes the norm for you too.
It becomes difficult to save money or have your feet planted if everyone around you lives as if every paycheck was meant to burn. You won’t even realize it until it’s too late.
Typically, true stability comes from surrounding yourself with others that have a future mindset. People who don’t feel the need to show off.
Sources: Please see here for a complete listing of all sources that were consulted in the preparation of this article.
15 Things the Middle Class Used to Afford Easily
There used to be a time when having a middle-class income meant you could afford to enjoy life. Those times now seem like a distant memory. Prices have increased dramatically over the last ten years but incomes have remained the same.
