I’m middle class, but feel like I’m always on the brink of financial collapse — how do I finally pull ahead?
The American middle class is shrinking. While 61% of Americans were considered middle class in 1971, that number fell to 51% by 2023, according to Pew Research [1].
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Pew defines middle class households as those with an income that is two-thirds to double that of the U.S. median household income, which is around $80,000.
Mark, aged 40, lives alone in Ithaca, New York and is technically middle class with his $60,000 per year salary, but he doesn’t feel very financially secure at all. Mark has no debt, but he only has $10,000 in emergency savings, and he lives in a one-bedroom apartment. He worries that some crisis such as losing his job or a health emergency could plunge him into serious financial difficulty.
If you’re feeling the same about your financial situation, here’s what you can do to become more financially stable, prepare for a potential future emergency, and start building wealth.
Being middle class isn't a guarantee of financial security
Pew Research reported that growth in middle-class income has fallen behind the income growth in the upper tier, and the share of total U.S. income held by households within the middle class has plummeted. The middle class’s share of all household income is just 43%, while 51% of the population is considered to be middle class. Their share of income is below their share of the population, as the incomes of middle-class households haven’t kept pace with the rise in the incomes of upper-income households.
While the middle-class lifestyle once meant having a nice house, two cars, a couple of kids, and some money in the bank, that's not necessarily the case anymore.
How far middle-class individuals can stretch the income they do have depends on location, as well as which end of the scale their income falls. As a result, it doesn't really matter which class you are in when it comes to your finances. What does matter is whether you feel secure in how much money you have in the bank, and whether your income stretches far enough to cover what you need. If it doesn't, then you need to make a change, regardless of whether you're lower, middle, or upper class.
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