5 Signs You've Made It To The Middle Class

The middle class is in economic condition that millions of Americans either see themselves in currently or strive to enter in the near future. The middle class is certainly a vaunted status, but it's one that's increasingly difficult to pin down. Admittedly, people across the economic spectrum would rather be "rich" than a part of the middle class, but you have to start somewhere, right? Middle class living starts with a good salary, of course, but there's a lot more to this condition they're just earning decent money.

Political messaging in recent years has made understanding the middle class far more difficult. You frequently hear politicians talk about the shrinking of the American middle class while at the same time messages of hope for those looking to vault themselves up from lower incomes abound. Polling frequently shows that people across vast swaths of the population see themselves in this light, so it can be difficult to pin down exactly what the middle class is. Even with this confusion persisting, there are some important characteristics that can make a big difference in any American's quest to join this classification of the economic spectrum. These five signs can help you identify where you fall and perhaps act as a road map for those who aren't quite there but are striving toward a middle class lifestyle for themselves and their family.

The first indicator to explore when discussing the middle class is income level. A household income of roughly $100,000 is a clear signal of a middle class existence. Importantly, this can be a single earner's salary figure or a combined income between partners who've chosen to make a life together. Because the "middle class" is an economic designation, there's no getting around the importance of income when exploring what it means. Hitting a six-figure salary is critical when evaluating a range of other economic mobility factors. Beyond just your paycheck, things like savings, your housing situation, and more play key roles in labeling you as a middle class earner or keeping you out of this grouping.

In order to satisfy a variety of other factors that signal a middle class lifestyle, you'll need to earn enough money to make them feasible parts of the conversation. Therefore, starting with your income level can be incredibly instructive. Those who don't satisfy this first condition will want to look for mobility options that bring them into new lines of work or provide promotions that can add to the bottom line. It's important for workers to remember that company loyalty isn't a major part of the modern job market. Instead of seeking promotions internally, it's often a great idea to hunt around for a new job at a different company on a regular basis. This can help leapfrog your salary figure and bring you closer to this mark with greater speed.

Speaking of salaries, it's worth noting that a college education is frequently a tool that helps enable you to achieve a middle class income. College educated individuals are more likely to earn higher salaries than those with a high school diploma or some other intermediate level of educational attainment (but they'll have to balance paying for that degree). Although, with that said it's worth noting that many degree programs feature depressed earnings potential. Shying away from these kinds of programs might be warranted for those seeking increased financial flexibility.

Another important thing to keep in mind is that a great many high paying jobs don't require a college education. In fact, among the six industries with the highest volume of middle-income workers, half are largely considered blue collar jobs, and the largest of the six is the military—a profession that largely requires no higher education. Even so, among similar earners there is a trend in which trade professionals who frequently enjoy the greatest personal autonomy in their work and can sometimes even set their hours with impunity are less likely to be seen as middle class. This is true even when earning more than enough to satisfy basic income thresholds. This doesn't mean a blue collar worker can't be a definite member of the middle class, though.

Your income alone isn't particularly valuable in determining economic status. Your paychecks act as a baseline for exploring other elements of the equation, but the way you leverage that money speaks volumes about your economic class status. Among the unsettling financial statistics that underpin modern America, it should be noted that 62% of the country lived paycheck to paycheck at the end of 2023, including roughly 42% of Americans earning over $100,000 per year. Regardless of whether you're one of the wealthiest CEOs in the country or an hourly employee on minimum wage, wasting your money on fruitless expenses is a great way to find yourself in dangerous waters. Living paycheck to paycheck is a financial hardship that everyone will want to avoid. A sudden change in your circumstances like an injury, illness, or layoff can throw you into the depths of financial crisis without warning.

Those who earn a high salary enjoy greater flexibility when it comes to setting aside money, but this doesn't mean that they actually do it. A critical hallmark of those firmly entrenched in the middle class is a savings moat that can help them navigate the hard times. Building up your emergency fund is the first step here. It's also a good idea to start investing money in the stock market for additional, perhaps even unstructured savings, or setting aside cash for big purchases that will inevitably come in the not too distant future—like a replacement for your current car or new appliances. The larger your moat the more financial stability you enjoy, placing you firmly within the context of the middle class.

On the subject of major purchases, middle-class Americans are more likely to own big ticket items like a car and their own home. Those with lower incomes and lesser savings volume may not have the financial means to invest in the real estate market. But middle-class Americans find themselves more likely to have the means to purchase these kinds of goods. A car is a big deal in the United States. Many places around the country don't feature very good public transportation infrastructure. This means that personal vehicle is required for efficient transportation to and from work, and to support basic tasks like getting the groceries or bringing children to school or activities. A car is a massive productivity booster that can save huge amounts of time in your daily tasks.

Owning your own home is another indicator of a middle class lifestyle. Of course, you'll need to have at least decent credit in order to finance this purchase, but higher than average credit scores are another baked in feature of middle class lifestyles. The average credit score for a low income individual is 658 while a middle income American has an average score of 735. Homeownership isn't the right approach for everyone, but it's undeniable that owning your home helps entrench a valuable asset within your net worth calculation.

Middle-class Americans frequently have additional financial safety nets. Saving for a rainy day is certainly part of the project becoming a middle-class American, but those who are a part of this grouping have generally taken steps to shore up other aspects of their financial present and future. One area is in health care. Middle-class Americans frequently prioritize an investment in moderate to high quality health insurance. They may not always need this additional coverage, but an improvement to their health care service delivers important peace of mind and frequently reduces the cost of major expenses when compared with cheaper coverage options. There's no crystal ball out there that can help illuminate what kind of health you'll enjoy this year or at any other time in your life. So investing in a more expensive health coverage plan may not pay off right away. However, having more expansive coverage in your back pocket allows you to make decisions about your health and wellbeing with greater flexibility.

Another aspect of middle class lifestyles is the prevalence of retirement savings. The middle class is certainly not immune to changes in inflation and damaging market conditions. There remains a significant drop-off in overall savings levels between upper-class individuals and those in the middle class. Yet the difference between low-income Americans and those in the middle class is distinct. Those who haven't saved for retirement with consistency may never be able to exit the workforce. On the other hand, middle-class Americans are frequently on track to enjoy at least a modest retirement when it's all said and done.