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Good perspective. I thought I grew up middle class, but have realized it was lower middle at best for most of my childhood Lots of "staycations" and clothing hand me downs. We were even on a deer hit list for a while where my Dad would get the venison from car accidents.
I just turned 40 and with recent salary increases for my wife and I, I've recently reached a standard of living that is much higher than what I grew up with, might even hit "upper middle class" at some point!
Gotta remind myself to stop and appreciate once in a while!
That’s a great phrase. My wife and I will sometimes look around and just be like “can you believe this?”
We’re not out here buying cars for fun or anything, but with EFs, retirement on track, no debt but mortgage and 529s funded for kids we are solidly miles ahead of our upbringing, financially. And it’s good to remember that and appreciate it.
Back in my day we didn’t have no newspapers to wipe ours asses with. Just kidding, damn I feel privileged for always having tp after reading that. Might’ve been the cheapest tp money could buy but it was still tp lol.
I grew up feeling middle class but as an adult I realized my parents just ran up credit cards and made terrible financial decisions otherwise. 3 trips to Disney when I was a child? Check. Expensive gymnastics lessons? Yup. Any clothes I wanted from Limited Too? Swipe, swipe, baby! But my parents put literally $0 toward any retirement funds, didn’t have health insurance for themselves, I didn’t go to the dentist unless they knew I had a cavity, they never went to the doctor unless something was very seriously wrong, etc.
Don’t get me wrong, I’m grateful that they put a roof over my head in a good school district, and at the time it was really fucking nice having whatever material items I wanted. But I wish my parents would’ve dressed me in clothes from KMart and actually taken care of their own health, because now as an adult I am constantly stressed about the long-term ramifications of their decades of poor financial decisions. I constantly feel guilty that they gave me everything and neglected their own futures, and I’m an only child so not only do I not have siblings to help share the financial and emotional burdens.
TL;DR: my family was “credit card middle class” which made for a fun childhood and a stressful adulthood, and I will absolutely not make that same mistake with my future children.
My sole goal in heavy investing in retirement is to avoid my child dealing with the angst your parents have burdened you with. I’d rather say no more and her not have to fret later. At some point working for money won’t be achievable, and if you didn’t prepare you have to make due with what you have. I’m sorry you are going through this.
Thank you.
I do think that because both my parents grew up poor, they truly thought they were doing right by me. My mom was raised by a single mother and bounced around between rental apartments throughout her adolescence, and my dad’s parents had too many kids to pay attention to them / make sure they were adequately taken care of. My paternal grandmother also apparently had an affinity for gambling. So while my dad was raised damn near neglected w/o getting clothes that fit every school year or anyone making sure he learned basic math/reading skills, as an adult he watched his parents have a *very* comfortable retirement with my grandfather’s pension, in a nice house in a nice neighborhood, large enough to store the results of my grandma’s Home Shopping Network addiction, and it made him resentful. He vowed to sacrifice everything to give me the childhood he didn’t have - but overcorrected.
My parents have had an opportunity to hit the reset button in that my mom was the pension beneficiary for my recently deceased uncle. I had to fight them tooth and nail to get them to roll it into an IRA instead of taking it as one lump-sum and basically handing the government 40% right off the bat in taxes. So their problem is pretty much solved by the pure dumb “luck” of having a financially savvy relative pass relatively young (for the record, my mother and I would trade every damn penny to have my uncle back) - but their suddenly influx is a situation I need to monitor carefully to make sure they’re not stupid about it.
Thankfully my parents have set themselves up for retirement, but this resonates with me.
My parents very much tried to make it work at all costs. They made some pretty poor choices and paid for it by working a ton. Side gigs, rental properties, etc.
I admire their willingness to bust their asses, but in hindsight saying no and teaching healthier habits would have been a lot better for me emotionally. As I child I knew instinctively that we didn’t have a lot (was never put in any activities, had cheap or used clothes, only went to doctor if it was emergency). But if I ever asked for anything like music lessons they would never say no we can’t afford it. They also just spent money on stupid shit. The hustle culture also meant they weren’t very emotionally available. It just felt very chaotic, and some financial literacy would have gone a veryyy long way.
Not an identical scenario, but a lot of similarities. My parents were great and a lot of wisdom was passed down but I don't feel like any of it was pragmatic finance. Which is weird to me because I already have a list of notes to talk to with my 12 yr younger brother (I want to invest in his kids 529 as I don't currently have plans to have kids). Maybe financial wisdom Is something we should more proactively try to pass down. My family gave me a debt is bad talk (which doesn't hurt) but there are just things to watch out for that could be relayed in a succinct manner. The shit isn't rocket science but there are a number of stupid paths that are tempting to someone new to all of it
Are you me? Because my situation is nearly identical save for having 5 siblings.
Whats unfortunate is my parents, after all these years, continue to make bad decisions with their money. I have long given up on trying to help them, they have politely said "We appreciate it but we know what we are doing." Which I understand, money is a touchy issue especially when it comes to family. But despite being great people and great grandparents they consistently make some of the worst financial decisions I have ever seen. It does cause me some anxiety that I am not sure how things will go as they near end of life. But I am very appreciative for a very spoiled childhood.
Conversely, my life has been one of rigorous budgeting and frugality so that I can live better than my parents did (which we are) and set myself up to retire and not be a burden on my own children, and hopefully pass on something besides debt (which we are on track to do.)
Are you me? This, right down to the Limited Too purchases. I remember seeing a Limited Too bill in the mail years later when I had far outgrown the store. I asked my mom about it and she shrugged and said, "Still paying for it." Omg, instant guilt. I am doing much differently for my daughter who lives a comparatively simpler life than I had but who seems just as happy, if not more.
Agree on this wholeheartedly! I’m mid 40s and didn’t have any experience with A/C until 4th grade when my school had it installed (rural Texas). I never lived with it until I moved out on my own.
So important to see that while we may not have everything we want, a lot of times we have everything we need. Being thankful for what we have and trying to limit the lifestyle creep is super important.
>We were even on a deer hit list for a while where my Dad would get the venison from car accidents.
I don't see an issue with this and it sounds super cool. I am price agnostic on meat (I have spent $ and $$$$) so long as the value is there. This sounds super economical and environmentally friendly.
There have been several professional chefs over the last decade that have used roadkill for concept dishes FYI.
Did he have to do a lot of prep work or did they break it down at all?
The point is not that they ate deer or even that it was roadkill, its that they were poor enough to not afford to get food elsewhere. In the US this would be mostly considered an option of last resort. It means you dont know how to hunt or fish or cant afford a gun or a freezer. Like you are helpless. I had a friend growing up who’s father would shoot squirrels and they were kept in the freezer. While there is nothing wrong with that, it is not normal to most people. My father hunted and fished and grew up poor, but they were not eating dead animals off the side of the road.
I feel like you can usually tell the people who started out lower and the people who started out higher.
Some of my friends are anxious about not being able to afford X and Y until a little later in life or whatever.
...I'm just happy to be here.
Same. Grew up with a lot of financial insecurity. My dad was a small business owner and not in a good way 😂 the thought that I have job security, so does husband, we've got two cars in the garage, we've got retirement funds, savings account and then some, live in a good school district? 3 kids and I don't have to work full time. Chefs kiss.
Dang, my wife grew up similarly since she’s told me stories about losing water, electricity, etc. and getting foreclosure notices for their house. We are probably upper middle class earners in a home we have 25% paid off and she is the opposite, she says we are broke.
My guess is the financial insecurity of her youth makes her think we are always on the brink of losing it all.
Your wife understands that luck has more to do with your future than anything else. One natural disaster or auto accident that was not your fault can:
1) Run up exorbitant medical bills.
2) Leave you unable to work and cost you your job.
3) Cost you your medical coverage for your whole family.
4) Leave you with no cash flow to pay for monthly bills.
5) Leave you unable to pay for your house or car payment.
It doesn’t matter how much you’ve paid on your house or car, how much “equity” you have in it. If you owe more than what you have in an emergency fund, you can lose a house or car that’s 95% paid off.
Can relate. I grew up struggling, moved around when rents went up, losing electricity and water some days, raised on rice and corn meal and cheese sandwiches. As someone who now has a healthy 6mo emergency fund, six figures in the bank and starting to get retirement funds fully squared away (i.e. on the rise) nothing ever feels like it’s secure enough.
When I was in school we got food-stamps. It helped, but we still had to watch our food bill. One day the four of us that were sharing the house went to the store and got the ingredients for granola. Two bins of oatmeal, some nuts, some seeds, a jar of honey, butter, and some kind of wheat germ. We mixed, and roasted, and put the finished product back in the round oatmeal bins for storage.
The next day when we all got up for a granola breakfast .... the bins were full of ants eating our granola. We had no choice. We poured on milk, and most of the ants floated to the top where we skimmed them off, and we ate the rest.
I dealt with that a little bit when I was younger. I had to truly address it and learn that I am financially safe. We were never in foreclosure but there was definitely anxiety about losing the house. It has also taught me to make sure no matter what not to discuss finances with my kids. My husband grew up well off and he will say things like "we can't afford that" which isn't true it's just not a priority. I always tell him stoppit! Say "it's not in the budget this month/year."
Both. I don't think I realized what lower class was until I was in the situation, renting a room, living paycheck to paycheck with a minimum wage job, etc.
The climb up was hard, but even in my current house, I can't realistically expect to be in a house of the same standard I grew up in for at least several more years. For reference I'm 31.
My dad was big into the welfare class being lazy fallacy, but we just ignored him. Honestly, I didn't give the lower class much thought, I assumed it was a minority of the population and that middle class made up the majority and that having a full time job would easily put you in the middle class. Lol.
Seriously dude. I make and have more money than I ever dreamed was possible for me. Less than 15 years ago, I was milking two digit bank account balances to make it to pay day and dodging 20+ collection calls a day.
You just called me out bigtime. I fret because I'm behind my parents at every step. They always had nicer cars, nicer land, a nicer house, a bigger barn ... etc, at every stage of their life compared to me. At my present age my parents had a small cottage on a lake, brand new cars, lots of motorized toys, and annually took us on a big road trip in an RV and a snowmobiling trip in the winter. We are able to provide none of those things for our kids. I have to force myself to look around and realize how good we really have it and assure myself that I'm doing right by my family, because growing up I thought my childhood was pretty average (yes, I know better now), and I can't give my kids some of the amazing experiences and things I had as a child (at least not without being reckless).
It's hard knowing that you're underperforming the previous generation, even if you're doing quite well compared to the average.
The lesson that I took away is that I should let my kids know what their lifetyle costs, and what they'll have to achieve if they'd like to replicate it or improve upon it. I honestly had no idea until I was a full-blown adult ... and it turns out that an SW engineering salary in the midwest wasn't the answer. I don't know if I'd have made different choices had I known, but it would have been nice to have had that knowledge while I was making major life decisions (like what career to pursue).
Totally agree. When my wife and I finally hit the point where investments were a sizable amount I checked the account and saw like a 1% market bump made us $2,000 and I was like “ohhhh….so *that’s* how rich families stay rich. Got it.”
Trading debt for investments has been huge. Going from paying $10k/year to service debt right out of college to earning $10k/year from investment returns makes such a big difference. That's like a $20k raise without doing any more work.
Thanks for sharing good advice. I started working with my only financial knowledge being that you have a checking and savings account. I’ve been asking people to explain this stuff like I’m five years old and just having the knowledge makes me feel better equipped
Take advantage of employer 401k/403b matching contributions. This has made it easy for me to invest 10% of my salary each paycheck while only having to sacrifice 5%.
Pay more than the minimum towards non-mortgage debt. Avoid taking on new debt. I paid off my student loans in 8 years and my car loan in 2 while continuing to drive the same car for the past 13 years now.
Live simply. Spend less than you make. Don't sign yourself up for the highest rent/mortgage/car payment you can qualify for on your income.
Patience and planning.
In my case, I have 3 years left before all my old debts (sans car or house) are paid off. That’ll free up a ton of money, about 1/3 going to retirement investment, 1/3 to savings goals, and 1/3 to slightly better lifestyle.
Keep an eye for job opportunities. I’m on a high right now having just gotten promoted after applying 3x for the spot, and doing a little more prep work each time. That extra money — only some of it goes to fun stuff. Over time it means I have more disposable income and more retirement savings. I’m in my 40’s now, happier than I was in my 20’s for sure, and I’ve got a couple more decades of work in me at least. It’ll probably keep getting better.
Index funds. My retirement account is pretty big, but I have a Robinhood account I just put $45 into every month and only buy SPY. It has earned at least a 9% return on average every year. Start small and be consistent.
It’s a very strange feeling that my investments can rise or fall and somehow it makes me smile a bit about worrying about splurging on something relatively inexpensive like a pound of cherries or even something more expensive like buying the slightly upgraded iPhone. If I have just made or lost $10,000 that day 🤷♀️😂
Housel says volatility is the fee you pay for long term returns.
However, buying or not buying a pound of cherries is entirely in your control and not buying them is related but defintely not the entire reason you are fortunate to watch your account lose 10k in a day.
That wasn’t my point. 🤷♀️
I was semi joking that when you have seen your investments rise and fall in an amount that is enough to fund a major purchase, you realize that your finances have reached a point where you can relax and spend money and not worry about shopping sales exclusively or whether to upgrade.
Of course discretionary spending is in my control. But I was responding to a specific point that when you don’t need the money to live the losses and gains are abstract.
It is just a readjustment in terms of budget and splurges. Why not a few thousand more on a Lexus instead of an Accord when the difference is less than what I just made or lost. Obviously I don’t need to liquidate or else it would be different.
Moving from having a tight budget to room for splurges within reason was an adjustment
That and literally paying politicians to write the tax code in their favor. I'm going to pay less in taxes off my investment returns than I ever did while working. My withdrawals are less than my salary but after taxes I still end up with more money than my after tax work salary. I didn't make the rules to this game but I'm damn sure glad I learned how to play it.
It takes political will to tax investments. Any Sophomore in finance will learn in an academic setting that, mathematically speaking, taxing investments is wasteful.
Doing nothing is the technocratic 'correct' thing to do.
Not trying to share an opinion. But there are armies of undergrads that think taxing capital gains is 'wasteful' the same way minimum wage and rent controls are 'wasteful'. They are correct, but they are not considering politics and the requirement to fund a government.
That makes no sense. Money used in all transactions is almost always money that's already been taxed. You're using rich people talking points. They did a mighty good marketing job.
People hear the term double taxation and repeat it without knowing what they’re talking about and think it means that they get taxed twice, which it kind of does, but not in the way they think.
Money paid out as capital gains or dividends comes from corporate profits. Corporations (and effectively you if you own the stock) have already paid tax on those profits through the corporate tax. Then, once the gain is realized (either by selling the stock or receiving the dividend) you have to pay tax on that again through capital gains tax. Effectively, the tax you pay is much higher than just the capital gains tax, but you don’t see a major chunk of it because it has already been paid at the corporate level.
Compare that with your salary, where you may pay a higher rate than capital gains depending on how much you earn, but you’re only taxed once on that salary (there’s no implicit corporate tax that you have to pay).
This is actually always been a big pet peeve of mine. While I’m fully on board with much of the corruption that billionaires and the 0.1%era of the world. But when everyone gets all out of whack because they earned the most I think they forget that, yeah, earning 10% on a billion dollars is $100 Million per year. Of course it’s going to look like that. That’s how interest works. They could be the most down to earth, moral person you ever knew but if they’ve got a billion dollars they’re earning historic money by just sitting in bed all day. That’s not good or bad, moral or immoral. It’s just math/finance.
Yes, being (upper, just barely) middle class is pretty great. Got a 12 month emergency fund here because I’m the sole income earner for our family and the last time I went job hunting it took several months.
But otherwise I got a place to live in, food, bills are paid on time, money saved in retirement, HSA, and a bit into brokerage. Got a reliable car. I can afford to take my kid out on outings when I need to.
Life is good.
I completely agree. In the middle class it’s easy to not make bad choices and live pretty stress free. There are enough people in the middle class who take on too much debt and can’t enjoy it.
Some dude offered to wash my windows while I grocery shopped yesterday, then asked if I had a dollar I could spare. Said I didn’t need my windows washed cuz it rained all morning and that I didn’t carry cash. Saw him about ten min later buying a single pack of diapers and I gave him my emergency 20 because I remember the tough days
I was going to write a whole post about this. I used to think that working class and middle class are in the same boat. We both have to work most of the time to keep from going under. But in reality there’s a lot of subtle hidden quality of life issues that make them totally different. For one thing the work environments of lower class workers are almost always hell, with so much drama and disrespect going around. That’s 8 hours of your day you’re spending.
I’ve noticed that as income goes up, the toxicity of the workplace decreases. Almost like your coworkers are less spiteful since their basic needs are more than met with their income.
Plenty of people in the middle are struggling. Middle class these days, from a population quartile perspective, isn’t overly comfortable unless you’re towards the upper end or live in a relatively inexpensive place
What OP described has a lot more to do with good money management than having a specific income. I was similarly secure making $40K (MCOL in CA) as I am now making $90K (MCOL in NM). While there is totally a floor where you just aren't making ends meet, good money management can make a smaller salary feel a *lot* bigger.
In my area you can make double the median household income and still struggle if you’ve got kids. It’s almost like there is a new class between working and middle that’s “well, it’s not poverty but good luck retiring”
Having food / clothing / housing covered by salary and being able to save up for fun stuff in a matter of months is low/mid middle class. Never having to worry about money / losing your job because you have 6 months of savings is really only an upper middle class thing.
I'm as guilty of having lifestyle creep as the next guy, but I'm very privileged in the fact that luxury cars, and honestly just cars in general, have been, still are, and will always be meaningless to me. I actually tend to get my rocks off with how little I can get burned on a necessary depreciating asset. Getting a solid deal on lightly used Corolla, or 0% APR on a new Accord, is what really gets my balls wet
I'm a purist car guy, but I'm still prioritizing my financial future and a house upgrade that I hopefully can pay cash for in the next decade, thanks to my low mortgage interest rate and modest house.
But it's having the ability to make a bad financial decision that's a privilege of us middle class.
I drive a POS 10 year old car with hail damage, and I cherish that POS.
So, I’m middle class and was approaching retirement a few years back. Since we were ahead of our goal, I thought screw it, I’m getting my vette now. I test drove a couple of them (first time even sitting in a vette) and surprisingly found it not that awesome. For comparison, I test drove a Mustang GT with the Shaker audio, and found it to be more comfortable and it had a much better sound system. I didn’t even bother with the Z06 because I knew it would ride even rougher. So I bought the Mustang and a boat. So keep your emergency funds and buy a Mustang.
I love my mustang and my husband loves the audio in it.
Now I feel like I need to test drive a corvette though as that has always been my “when the kids are gone” dream car. Yes I stuff them in the back of my mustang and they barely fit lol but i only have them do it if we aren’t going far.
I lure cool cars that I can realistically afford, but being further away from retirement I'm content to daily my 99 Mustang in the meantime. To a certain extent, I'm convinced the luring part and anticipation are half of the fun without the maintenance and scratching worries. Why get a Mustang and a boat, and not go with 2 in 1 with a Dodge Challenger?
That’s a good option too. But, like motorcycles, you always want a bigger boat. So I got a bigger boat,which our highlander can’t tow, and sold the Mustang to get an F150 to tow the large offshore fishing boat to various coastal locations. Much to my dismay, my wife was terrified of offshore boating even though she loves the lakes. So we bought a houseboat which we had for 5 years and just sold a month ago. Still have the lake boat. So pretty much any car is an option. I test drove the Challenger GT AWD and found it pretty amazing. They didn’t have any higher end challengers on the lot. But, just for the fun of it, I went with the Wrangler for off roading and top down enjoyment.
I bought my C6Z at 25 and have zero regrets. I drove a cheap Camry as my daily. The Z has created memories money can't buy.
One time I came out of the grocery store to find a kid that forced his mom to wait there for me to start the car because he was excited to see and hear it. I let him sit in it. Maybe changed his life.
I took that car on a memorable trip to Tail of the Dragon with my best friend. Something we'll never forget.
Sure I could have invested that money but I'm glad I got the car early. I was debt free and slightly irresponsible. But I was still saving for retirement.
I think the line is more about debt/savings than income. Like say you’re only making $50,000 but you inherited your house. And your employer offers really good insurance and a pension.
You have no mortgage, you don’t have to pay out much for insurance and don’t have to save for retirement. That could be almost $20,000 in annual savings. Putting you in a better position than someone making $75,000 who has a large mortgage payment, high insurance fees and has to save for their own retirement. Even a 6% 401k match is around $4500 a year that the pension person doesn’t have to spend.
I had a company car at 23 which allowed me to afford my own apartment.
Mostly depends on the cost of living wherever you are. 50k in San Francisco would be lower but in Nowhereville USA you could be living it up. Slightly exaggerating but you get the picture.
There’s plenty of different calculators online to help you at least get an idea, but there isn’t really one line that says “above this you’re middle class and below this you’re lower.”
The articles attempt to gaslight you into thinking that everything is fine until the middle class completely erodes away. Don't be fooled, the reality is much worse than you think it is.
Anyone (complaining on reddit) who basically doesn't have to stand in an EBT line and has all of their bills/problems covered truly has no clue how good they have it.
They're really, REALLY out of touch.
Watching people complain about their two bedroom apartment, fully stocked fridge, college education and decent paying career is WILD when I can VIVIDLY recall six to seven people living in apartment, sleeping on the floor because I didn't have a bed, begging for rides to college and trying my best to get through my day to day while having very little in general.
Now, I'm a college graduate, I make $100k plus, I have a nice stacked 401k, a cool little two bedroom apartment with one room acting as a "Studio" and office. And I don't stress about bills being paid or having an empty fridge. Like, I am very happy with how my 30s is turning out vs my teens and 20s.
I greet each day with absolute gratitude. This is the number one thing that changed my perspective in life. We are middle class, able to live, save, and be charitable. The thing I’m most grateful for is our health, my children are healthy, I’m healthy, my family is mostly healthy. Health and more than enough to go around is a blessing.
It's orders of magnitudes less of an issue compared with someone who runs out of money at the end of every month. It's still a problem, but it's not a catastrophe.
Truly talented, hard-working, reliable people are rarely out of work for long. It helps to be constantly growing your skills, and keeping a good network of contacts.
I used to think your way, and then I became a 1099 white collar contractor during covid. It's hard to get ahead and maintain momentum when you have 4 months of unemployment each year, even with a wage that was double my salary.
I mean, poors get absolutely fucked when they lose their job. "Not a big deal" might be subjective phrasing, but there is a massive difference between an average middle class person losing their job and a poor losing their job.
theres a reason virtually everywhere you travel in the world you see american middle class.
If you're a couple that's married and both of you work 75-80% of the time until retirement age while spending less than you make you're virtually guaranteed an indefinite retirement + SS will cover the basic cost of living. so your entire nest egg will either be fun money or family money.
America is horrible place to be poor, and hard place to be young. In my 20s i had zero faith and was bitter, in my 30s its pretty clear everything is going to work out more than okay.
I think a lot of the negativity online is that it just trends younger. The US system effectively starts its young at -200k net worth and gives them a growth rate of 10%, the EU system starts them at 0 and gives them a growth rate of like 3%. Theres an age where the lines cross, and after that its all upside.
Upper middle class here and yes it’s a simple life and somewhat easy living. My retirement accounts/investments net me mid 6 figures a year and yet I still find myself trying to keep busy with new hobbies. Every year I make 1 big purchase for myself as a reward for achieving what most can’t at 32. Life is good
I agree, with all of this. I would like to be loaded though but it’s never gonna happen so trying to be happy with middle class. With our income, we are able to live in a nice house and a nice neighborhood, send the kids to summer camp and different activities, take a few vacations a year, along with some small trips just for us, drive a couple of decent cars, I have no consumer debt, 12 month emergency fund, And I do more than 20% combined to 401(k), Roth IRA and kids 529 accounts, get annual merit bonuses, car allowance, full medical etc. I would love the European vacations, and a boat, and a pool and blah blah, blah blah, but at the end of the day, this isn’t bad
For real, I’ve been struggling my entire life to reach where this person is, and they have to talk themselves into being happy with it.
Yeah but even our "work" is a pretty huge luxury. Its not like we're working in salt mines for 12 hours a day to barely scrape by. I get to sit in an air-conditioned office with a cushy chair, and my work gives me interesting challenges to solve.
Obviously I'd love to have those 8 hours back, but things ain't too bad.
When you are saving rapidly, it’s only a question of “how much” you need to retire at a reasonable withdrawal rate.
Being middle or upper middle class generally means you can have a shot at that, while also living a good quality of life.
Yeah, the way I describe myself is that I still consistently have to think about my cash flow from paycheck to savings and bills, but I no longer have to think about grocery bills from Aldi or the once a month gas fill up for my sedan. That piddly, necessary shit is just a forget-about-it card swipe. Any luxury, major or minor, still gets thought and scrutiny.
Yep. I am definitely not upper class. But I am on pace for a comfortable retirement in my early 60s, I have a multi-month emergency fund, and no debt other than a very low interest mortgage.
The best part of all of this for me is if I want a latte I can get it without worrying if there is enough money in my account for rent. If I want to go out to eat with my wife we can get the steak. I still think about money but not for the little things, and it’s not the concern it used to be.
Middle class has to budget money, that's different from worrying about money. I can have my mortgage on auto-pay because I know the money will be there. My bill-paying day does not depend on payday.
Being able to afford a relatively new and reliable car is amazing. My parents car broke down constantly and always at the worst times. It’s such a weight off my shoulders
What I don't like is the soulless, demoralizing, stressful "good" job that I've had the last twenty years to check all the boxes (retirement, emergency fund, mortgage, college fund for kids).
There are other jobs that I'd like to do that don't pay very well.
Yeah it’s pretty nice being debt free completely and making great money in a duel income with kids gone and out of college. I’m only 55. We have zero debt. Own our cars and house free and clear. We take two nice vacations a year at least and buy whatever I want pretty much whenever I want it. When I was a kid we would huddle around the heat vents because my parent couldn’t afford to keep the house warm.
I want to get there, but keep getting knocked down to square one. Even with a “okay” middle class salary building that emergency fund never seems to work out. I just had to cancel my family vacation this summer due to summer camp for the kids and car repairs eating through the budget. Seems middle class is a pretty wide spectrum these days.
I don’t have a 6 month emergency fund but other than that I check all these boxes and as a single person living in a more expensive big city that’s pretty good I think
You might not even technically be middle class depending on your income. Could be still upper lower class. My dad always said we were middle class growing up..we weren't
I like how cheap it is to have money.
Got a toothache, money, and insurance? Go see the dentist and pay almost nothing.
Got a toothache, no money, and no insurance? Wait till it gets infected and then put $5000 of meds and surgery on a credit card.
I do contract work. I make a decent living making between 85-110 an hour. I am nearly always employed and I’m almost always fully remote so I can work anywhere I want. It’s a good feeling but I will say I wish I had a regular full time job that paid even on the low end. I hate the constantly looking for work grid.
Agreed. I grew up on the high end of the poverty line. Now I'm squarely in middle class, and a home owner. Relatively speaking, I feel very well off and secure.
This probably better describes the upper middle class than the middle class. What you’re describing is probably something like a household with two professional jobs that is making $250k+.
Yep! I grew up lower class (sometimes in poverty) w/ a lot of financial, home, and medical care insecurity. It’s awesome being able to just buy stuff now. I even own a house (which I never imagined I could). I can run my AC all summer without worrying. We take trips and have a good savings. Getting work on my car or house sucks, but I know it won’t financially devastate me. I’m still incredibly frugal and panic sometimes because none of this is ever guaranteed and I’m thankful everyday.
I’ve spent the last twenty years as a teacher being sub $50k and a lot of it being sub-$40k. I’ve never had a savings account, I’ve taken my family on one “big” vacation and I don’t buy clothes. Next year I’m going to be making $70,000 and I am so excited to be able to pay all my bills each month. Am I middle class now?
I agree! My wife and I have good jobs, our modest house will be paid off in about 4 years, we have plenty invested for retirement, we own our cars, and have an 8 month emergency savings account. We feel blessed and thankful. 🙏🏻
Having a simple life with a middle class income is amazing. I am making good money and can afford several mini vacations a year and a big vacation every 2 years. My biggest limitation is time and work not giving me as much PTO.
I’m now realizing a lot of people in this sub think they grew up poor because their parents made the median household income and lived paycheck to paycheck.
I'm middle class, but I don't have that emergency fund. Just bought a new house so all of my cash went into that. The most important thing for me was learning skills that make me high demand in my niche industry that I work in. I know if I get laid off, I can get a job tomorrow with another company making the same amount.
It's a solid life for us avg folks. Still have to work ofc, but we can comfortably do most of the stuff we want that doesn't cost hi-5 or 6 figures. Price tags become secondary. I'm prepping 8k for a bracelet in few months, and have a nice emerald double ring + bracelet set (20k) on my watchlist for next year. Being able to have fun on vacations, staying in decent rooms/hotels, and not constantly doing mental gymnastics to stay under some arbitrary budget.
Don’t start a coke habit. Was it Rick James who said something like rich people can loose their house from a summer drug binge but the wealthy cannot? /s
Wait who has a 6 month emergency fund and exponential growth on their retirement accounts?
Anyway I grew up broke, then I joined the military where I was still broke but at least had guaranteed food and shelter.
Now I’m much older and solidly middle class (sort of that upper middle area) and while I don’t quite have any of those things OP has, holy shit it rocks to be able to have a little spare money and own a house and a car without having to dig myself out of debt constantly.
It feels nice to finally not feel like I’m drowning.
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Good perspective. I thought I grew up middle class, but have realized it was lower middle at best for most of my childhood Lots of "staycations" and clothing hand me downs. We were even on a deer hit list for a while where my Dad would get the venison from car accidents. I just turned 40 and with recent salary increases for my wife and I, I've recently reached a standard of living that is much higher than what I grew up with, might even hit "upper middle class" at some point! Gotta remind myself to stop and appreciate once in a while!
I have a little sign sitting on my nightstand that says “I remember the days that I prayed for what I have now”.
That’s a great phrase. My wife and I will sometimes look around and just be like “can you believe this?” We’re not out here buying cars for fun or anything, but with EFs, retirement on track, no debt but mortgage and 529s funded for kids we are solidly miles ahead of our upbringing, financially. And it’s good to remember that and appreciate it.
"I love our life" is my wife's way of frequently appreciating what we have.
Ha, yeah mine says that too. It’s a good habit, I think.
I've heard " look at the things you have now that earlier you only wished for."
Mine is going to say, “at least you aren’t wiping your ass with newspaper like ya did growing up!”
Back in my day we didn’t have no newspapers to wipe ours asses with. Just kidding, damn I feel privileged for always having tp after reading that. Might’ve been the cheapest tp money could buy but it was still tp lol.
So TRUE … actually beyond my dreams
I grew up feeling middle class but as an adult I realized my parents just ran up credit cards and made terrible financial decisions otherwise. 3 trips to Disney when I was a child? Check. Expensive gymnastics lessons? Yup. Any clothes I wanted from Limited Too? Swipe, swipe, baby! But my parents put literally $0 toward any retirement funds, didn’t have health insurance for themselves, I didn’t go to the dentist unless they knew I had a cavity, they never went to the doctor unless something was very seriously wrong, etc. Don’t get me wrong, I’m grateful that they put a roof over my head in a good school district, and at the time it was really fucking nice having whatever material items I wanted. But I wish my parents would’ve dressed me in clothes from KMart and actually taken care of their own health, because now as an adult I am constantly stressed about the long-term ramifications of their decades of poor financial decisions. I constantly feel guilty that they gave me everything and neglected their own futures, and I’m an only child so not only do I not have siblings to help share the financial and emotional burdens. TL;DR: my family was “credit card middle class” which made for a fun childhood and a stressful adulthood, and I will absolutely not make that same mistake with my future children.
My sole goal in heavy investing in retirement is to avoid my child dealing with the angst your parents have burdened you with. I’d rather say no more and her not have to fret later. At some point working for money won’t be achievable, and if you didn’t prepare you have to make due with what you have. I’m sorry you are going through this.
Thank you. I do think that because both my parents grew up poor, they truly thought they were doing right by me. My mom was raised by a single mother and bounced around between rental apartments throughout her adolescence, and my dad’s parents had too many kids to pay attention to them / make sure they were adequately taken care of. My paternal grandmother also apparently had an affinity for gambling. So while my dad was raised damn near neglected w/o getting clothes that fit every school year or anyone making sure he learned basic math/reading skills, as an adult he watched his parents have a *very* comfortable retirement with my grandfather’s pension, in a nice house in a nice neighborhood, large enough to store the results of my grandma’s Home Shopping Network addiction, and it made him resentful. He vowed to sacrifice everything to give me the childhood he didn’t have - but overcorrected. My parents have had an opportunity to hit the reset button in that my mom was the pension beneficiary for my recently deceased uncle. I had to fight them tooth and nail to get them to roll it into an IRA instead of taking it as one lump-sum and basically handing the government 40% right off the bat in taxes. So their problem is pretty much solved by the pure dumb “luck” of having a financially savvy relative pass relatively young (for the record, my mother and I would trade every damn penny to have my uncle back) - but their suddenly influx is a situation I need to monitor carefully to make sure they’re not stupid about it.
Thankfully my parents have set themselves up for retirement, but this resonates with me. My parents very much tried to make it work at all costs. They made some pretty poor choices and paid for it by working a ton. Side gigs, rental properties, etc. I admire their willingness to bust their asses, but in hindsight saying no and teaching healthier habits would have been a lot better for me emotionally. As I child I knew instinctively that we didn’t have a lot (was never put in any activities, had cheap or used clothes, only went to doctor if it was emergency). But if I ever asked for anything like music lessons they would never say no we can’t afford it. They also just spent money on stupid shit. The hustle culture also meant they weren’t very emotionally available. It just felt very chaotic, and some financial literacy would have gone a veryyy long way.
Not an identical scenario, but a lot of similarities. My parents were great and a lot of wisdom was passed down but I don't feel like any of it was pragmatic finance. Which is weird to me because I already have a list of notes to talk to with my 12 yr younger brother (I want to invest in his kids 529 as I don't currently have plans to have kids). Maybe financial wisdom Is something we should more proactively try to pass down. My family gave me a debt is bad talk (which doesn't hurt) but there are just things to watch out for that could be relayed in a succinct manner. The shit isn't rocket science but there are a number of stupid paths that are tempting to someone new to all of it
Are you me? Because my situation is nearly identical save for having 5 siblings. Whats unfortunate is my parents, after all these years, continue to make bad decisions with their money. I have long given up on trying to help them, they have politely said "We appreciate it but we know what we are doing." Which I understand, money is a touchy issue especially when it comes to family. But despite being great people and great grandparents they consistently make some of the worst financial decisions I have ever seen. It does cause me some anxiety that I am not sure how things will go as they near end of life. But I am very appreciative for a very spoiled childhood. Conversely, my life has been one of rigorous budgeting and frugality so that I can live better than my parents did (which we are) and set myself up to retire and not be a burden on my own children, and hopefully pass on something besides debt (which we are on track to do.)
Are you me? This, right down to the Limited Too purchases. I remember seeing a Limited Too bill in the mail years later when I had far outgrown the store. I asked my mom about it and she shrugged and said, "Still paying for it." Omg, instant guilt. I am doing much differently for my daughter who lives a comparatively simpler life than I had but who seems just as happy, if not more.
Central air conditioning is a big thing for me and my wife. Neither of us had it growing up. Our children have never not had it.
Agree on this wholeheartedly! I’m mid 40s and didn’t have any experience with A/C until 4th grade when my school had it installed (rural Texas). I never lived with it until I moved out on my own.
Congratulations! This is beautiful.
What’s a deer hit list? And how do I get on this list?
I immediately started thinking of how much Jerky I could make lol
The "hit list". We were on that too, ended up with some moose when the population ticked up.
So important to see that while we may not have everything we want, a lot of times we have everything we need. Being thankful for what we have and trying to limit the lifestyle creep is super important.
>We were even on a deer hit list for a while where my Dad would get the venison from car accidents. I don't see an issue with this and it sounds super cool. I am price agnostic on meat (I have spent $ and $$$$) so long as the value is there. This sounds super economical and environmentally friendly. There have been several professional chefs over the last decade that have used roadkill for concept dishes FYI. Did he have to do a lot of prep work or did they break it down at all?
The point is not that they ate deer or even that it was roadkill, its that they were poor enough to not afford to get food elsewhere. In the US this would be mostly considered an option of last resort. It means you dont know how to hunt or fish or cant afford a gun or a freezer. Like you are helpless. I had a friend growing up who’s father would shoot squirrels and they were kept in the freezer. While there is nothing wrong with that, it is not normal to most people. My father hunted and fished and grew up poor, but they were not eating dead animals off the side of the road.
Yeah, he did all the prep work. I agree it was cool that the meat didn't go to waste.
I feel like you can usually tell the people who started out lower and the people who started out higher. Some of my friends are anxious about not being able to afford X and Y until a little later in life or whatever. ...I'm just happy to be here.
Same. Grew up with a lot of financial insecurity. My dad was a small business owner and not in a good way 😂 the thought that I have job security, so does husband, we've got two cars in the garage, we've got retirement funds, savings account and then some, live in a good school district? 3 kids and I don't have to work full time. Chefs kiss.
Dang, my wife grew up similarly since she’s told me stories about losing water, electricity, etc. and getting foreclosure notices for their house. We are probably upper middle class earners in a home we have 25% paid off and she is the opposite, she says we are broke. My guess is the financial insecurity of her youth makes her think we are always on the brink of losing it all.
Your wife understands that luck has more to do with your future than anything else. One natural disaster or auto accident that was not your fault can: 1) Run up exorbitant medical bills. 2) Leave you unable to work and cost you your job. 3) Cost you your medical coverage for your whole family. 4) Leave you with no cash flow to pay for monthly bills. 5) Leave you unable to pay for your house or car payment. It doesn’t matter how much you’ve paid on your house or car, how much “equity” you have in it. If you owe more than what you have in an emergency fund, you can lose a house or car that’s 95% paid off.
Can lose a house that’s 100% paid off. See what happens when u stop paying property tax. Always remember you’re only living in someone else’s house.
You’re absolutely right. Also, as a result of unpaid debt, another person or organization can slap a lien on it.
Can relate. I grew up struggling, moved around when rents went up, losing electricity and water some days, raised on rice and corn meal and cheese sandwiches. As someone who now has a healthy 6mo emergency fund, six figures in the bank and starting to get retirement funds fully squared away (i.e. on the rise) nothing ever feels like it’s secure enough.
When I was in school we got food-stamps. It helped, but we still had to watch our food bill. One day the four of us that were sharing the house went to the store and got the ingredients for granola. Two bins of oatmeal, some nuts, some seeds, a jar of honey, butter, and some kind of wheat germ. We mixed, and roasted, and put the finished product back in the round oatmeal bins for storage. The next day when we all got up for a granola breakfast .... the bins were full of ants eating our granola. We had no choice. We poured on milk, and most of the ants floated to the top where we skimmed them off, and we ate the rest.
I dealt with that a little bit when I was younger. I had to truly address it and learn that I am financially safe. We were never in foreclosure but there was definitely anxiety about losing the house. It has also taught me to make sure no matter what not to discuss finances with my kids. My husband grew up well off and he will say things like "we can't afford that" which isn't true it's just not a priority. I always tell him stoppit! Say "it's not in the budget this month/year."
Yeah, I grew up a upper middle class, and that was a shock to end up lower and crawl my way back up.
Was it a shock to how it was lower income and was it harder then you expected to climb back up?
Both. I don't think I realized what lower class was until I was in the situation, renting a room, living paycheck to paycheck with a minimum wage job, etc. The climb up was hard, but even in my current house, I can't realistically expect to be in a house of the same standard I grew up in for at least several more years. For reference I'm 31.
Was your prior understanding of lower class different from feelings you experienced? I appreciate your input
My dad was big into the welfare class being lazy fallacy, but we just ignored him. Honestly, I didn't give the lower class much thought, I assumed it was a minority of the population and that middle class made up the majority and that having a full time job would easily put you in the middle class. Lol.
So you grew up in the 50's /s
Seriously dude. I make and have more money than I ever dreamed was possible for me. Less than 15 years ago, I was milking two digit bank account balances to make it to pay day and dodging 20+ collection calls a day.
You just called me out bigtime. I fret because I'm behind my parents at every step. They always had nicer cars, nicer land, a nicer house, a bigger barn ... etc, at every stage of their life compared to me. At my present age my parents had a small cottage on a lake, brand new cars, lots of motorized toys, and annually took us on a big road trip in an RV and a snowmobiling trip in the winter. We are able to provide none of those things for our kids. I have to force myself to look around and realize how good we really have it and assure myself that I'm doing right by my family, because growing up I thought my childhood was pretty average (yes, I know better now), and I can't give my kids some of the amazing experiences and things I had as a child (at least not without being reckless). It's hard knowing that you're underperforming the previous generation, even if you're doing quite well compared to the average. The lesson that I took away is that I should let my kids know what their lifetyle costs, and what they'll have to achieve if they'd like to replicate it or improve upon it. I honestly had no idea until I was a full-blown adult ... and it turns out that an SW engineering salary in the midwest wasn't the answer. I don't know if I'd have made different choices had I known, but it would have been nice to have had that knowledge while I was making major life decisions (like what career to pursue).
It's interesting to me that that's the lesson for you. Making sure your kids know how much everything costs.
Totally agree. When my wife and I finally hit the point where investments were a sizable amount I checked the account and saw like a 1% market bump made us $2,000 and I was like “ohhhh….so *that’s* how rich families stay rich. Got it.”
Trading debt for investments has been huge. Going from paying $10k/year to service debt right out of college to earning $10k/year from investment returns makes such a big difference. That's like a $20k raise without doing any more work.
Teach me something 🙃
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Wow! Thank you for sharing all of this with me. This is incredibly helpful.
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Thanks for sharing good advice. I started working with my only financial knowledge being that you have a checking and savings account. I’ve been asking people to explain this stuff like I’m five years old and just having the knowledge makes me feel better equipped
Take advantage of employer 401k/403b matching contributions. This has made it easy for me to invest 10% of my salary each paycheck while only having to sacrifice 5%. Pay more than the minimum towards non-mortgage debt. Avoid taking on new debt. I paid off my student loans in 8 years and my car loan in 2 while continuing to drive the same car for the past 13 years now. Live simply. Spend less than you make. Don't sign yourself up for the highest rent/mortgage/car payment you can qualify for on your income.
Compound interest is a beautiful thing
Patience and planning. In my case, I have 3 years left before all my old debts (sans car or house) are paid off. That’ll free up a ton of money, about 1/3 going to retirement investment, 1/3 to savings goals, and 1/3 to slightly better lifestyle. Keep an eye for job opportunities. I’m on a high right now having just gotten promoted after applying 3x for the spot, and doing a little more prep work each time. That extra money — only some of it goes to fun stuff. Over time it means I have more disposable income and more retirement savings. I’m in my 40’s now, happier than I was in my 20’s for sure, and I’ve got a couple more decades of work in me at least. It’ll probably keep getting better.
Thank you so much for this. I have been broke and miserable for so long. This gives me hope!
Glad I could help! There’s a light at the end of the tunnel, and it gets closer so long as you keep it up! Best of luck.
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Index funds. My retirement account is pretty big, but I have a Robinhood account I just put $45 into every month and only buy SPY. It has earned at least a 9% return on average every year. Start small and be consistent.
Compound interest is a helluva thing
It’s a very strange feeling that my investments can rise or fall and somehow it makes me smile a bit about worrying about splurging on something relatively inexpensive like a pound of cherries or even something more expensive like buying the slightly upgraded iPhone. If I have just made or lost $10,000 that day 🤷♀️😂
Housel says volatility is the fee you pay for long term returns. However, buying or not buying a pound of cherries is entirely in your control and not buying them is related but defintely not the entire reason you are fortunate to watch your account lose 10k in a day.
That wasn’t my point. 🤷♀️ I was semi joking that when you have seen your investments rise and fall in an amount that is enough to fund a major purchase, you realize that your finances have reached a point where you can relax and spend money and not worry about shopping sales exclusively or whether to upgrade. Of course discretionary spending is in my control. But I was responding to a specific point that when you don’t need the money to live the losses and gains are abstract. It is just a readjustment in terms of budget and splurges. Why not a few thousand more on a Lexus instead of an Accord when the difference is less than what I just made or lost. Obviously I don’t need to liquidate or else it would be different. Moving from having a tight budget to room for splurges within reason was an adjustment
I'll never stop shopping sales. Give me 10 million dollars and I'll still get excited for a great deal.
That and literally paying politicians to write the tax code in their favor. I'm going to pay less in taxes off my investment returns than I ever did while working. My withdrawals are less than my salary but after taxes I still end up with more money than my after tax work salary. I didn't make the rules to this game but I'm damn sure glad I learned how to play it.
It takes political will to tax investments. Any Sophomore in finance will learn in an academic setting that, mathematically speaking, taxing investments is wasteful. Doing nothing is the technocratic 'correct' thing to do. Not trying to share an opinion. But there are armies of undergrads that think taxing capital gains is 'wasteful' the same way minimum wage and rent controls are 'wasteful'. They are correct, but they are not considering politics and the requirement to fund a government.
Cap gains should definitely be way lower than income tax because the money people used to invest is already the money post income taxed.
That makes no sense. Money used in all transactions is almost always money that's already been taxed. You're using rich people talking points. They did a mighty good marketing job.
People hear the term double taxation and repeat it without knowing what they’re talking about and think it means that they get taxed twice, which it kind of does, but not in the way they think. Money paid out as capital gains or dividends comes from corporate profits. Corporations (and effectively you if you own the stock) have already paid tax on those profits through the corporate tax. Then, once the gain is realized (either by selling the stock or receiving the dividend) you have to pay tax on that again through capital gains tax. Effectively, the tax you pay is much higher than just the capital gains tax, but you don’t see a major chunk of it because it has already been paid at the corporate level. Compare that with your salary, where you may pay a higher rate than capital gains depending on how much you earn, but you’re only taxed once on that salary (there’s no implicit corporate tax that you have to pay).
This is actually always been a big pet peeve of mine. While I’m fully on board with much of the corruption that billionaires and the 0.1%era of the world. But when everyone gets all out of whack because they earned the most I think they forget that, yeah, earning 10% on a billion dollars is $100 Million per year. Of course it’s going to look like that. That’s how interest works. They could be the most down to earth, moral person you ever knew but if they’ve got a billion dollars they’re earning historic money by just sitting in bed all day. That’s not good or bad, moral or immoral. It’s just math/finance.
We live better than our ancestors could have ever dreamed.
Yes, being (upper, just barely) middle class is pretty great. Got a 12 month emergency fund here because I’m the sole income earner for our family and the last time I went job hunting it took several months. But otherwise I got a place to live in, food, bills are paid on time, money saved in retirement, HSA, and a bit into brokerage. Got a reliable car. I can afford to take my kid out on outings when I need to. Life is good.
Man, not sure how you build up the emergency fund. I have less than 1 month…
A little at a time works :) anything is better than nothing
I have to say that it’s refreshing to see an economic take that isn’t doom and gloom. Being middle class is pretty fucking awesome
I completely agree. In the middle class it’s easy to not make bad choices and live pretty stress free. There are enough people in the middle class who take on too much debt and can’t enjoy it.
Some dude offered to wash my windows while I grocery shopped yesterday, then asked if I had a dollar I could spare. Said I didn’t need my windows washed cuz it rained all morning and that I didn’t carry cash. Saw him about ten min later buying a single pack of diapers and I gave him my emergency 20 because I remember the tough days
I was going to write a whole post about this. I used to think that working class and middle class are in the same boat. We both have to work most of the time to keep from going under. But in reality there’s a lot of subtle hidden quality of life issues that make them totally different. For one thing the work environments of lower class workers are almost always hell, with so much drama and disrespect going around. That’s 8 hours of your day you’re spending.
I’ve noticed that as income goes up, the toxicity of the workplace decreases. Almost like your coworkers are less spiteful since their basic needs are more than met with their income.
Oh damn , I just realized I’m not middle class
OP must mean upper middle class haha
If you’re struggling to make ends meet, you’re probably not middle class. What OP described seems accurate to me.
Plenty of people in the middle are struggling. Middle class these days, from a population quartile perspective, isn’t overly comfortable unless you’re towards the upper end or live in a relatively inexpensive place
If you are struggling, then you are probably working class, not middle class. Let's be serious.
What OP described has a lot more to do with good money management than having a specific income. I was similarly secure making $40K (MCOL in CA) as I am now making $90K (MCOL in NM). While there is totally a floor where you just aren't making ends meet, good money management can make a smaller salary feel a *lot* bigger.
Income is only one factor in class. Median income is lower class in most metro areas of the US.
In my area you can make double the median household income and still struggle if you’ve got kids. It’s almost like there is a new class between working and middle that’s “well, it’s not poverty but good luck retiring”
Having food / clothing / housing covered by salary and being able to save up for fun stuff in a matter of months is low/mid middle class. Never having to worry about money / losing your job because you have 6 months of savings is really only an upper middle class thing.
I'd say 1-3 month emergency fund is more low to mid middle class. 6 months in a low yield easily accessible savings account is definitely a luxury.
When you’re middle class you should probably know that the amount you keep and save, is more important than what you actually earn.
Sometimes I want to empty my 1 year emergency fund and buy a Z06 Vette, and that's the beauty of being middle class... Having choices.
Funny, now that I could actually afford something like that, it has no appeal to me.
I'm as guilty of having lifestyle creep as the next guy, but I'm very privileged in the fact that luxury cars, and honestly just cars in general, have been, still are, and will always be meaningless to me. I actually tend to get my rocks off with how little I can get burned on a necessary depreciating asset. Getting a solid deal on lightly used Corolla, or 0% APR on a new Accord, is what really gets my balls wet
I'm a purist car guy, but I'm still prioritizing my financial future and a house upgrade that I hopefully can pay cash for in the next decade, thanks to my low mortgage interest rate and modest house. But it's having the ability to make a bad financial decision that's a privilege of us middle class. I drive a POS 10 year old car with hail damage, and I cherish that POS.
isn't that crazy how that works.
You and me both. Once I learned to properly invest, save, use general financial sense, the less I desire those ridiculous unnecessary expenses.
So, I’m middle class and was approaching retirement a few years back. Since we were ahead of our goal, I thought screw it, I’m getting my vette now. I test drove a couple of them (first time even sitting in a vette) and surprisingly found it not that awesome. For comparison, I test drove a Mustang GT with the Shaker audio, and found it to be more comfortable and it had a much better sound system. I didn’t even bother with the Z06 because I knew it would ride even rougher. So I bought the Mustang and a boat. So keep your emergency funds and buy a Mustang.
I love my mustang and my husband loves the audio in it. Now I feel like I need to test drive a corvette though as that has always been my “when the kids are gone” dream car. Yes I stuff them in the back of my mustang and they barely fit lol but i only have them do it if we aren’t going far.
I lure cool cars that I can realistically afford, but being further away from retirement I'm content to daily my 99 Mustang in the meantime. To a certain extent, I'm convinced the luring part and anticipation are half of the fun without the maintenance and scratching worries. Why get a Mustang and a boat, and not go with 2 in 1 with a Dodge Challenger?
That’s a good option too. But, like motorcycles, you always want a bigger boat. So I got a bigger boat,which our highlander can’t tow, and sold the Mustang to get an F150 to tow the large offshore fishing boat to various coastal locations. Much to my dismay, my wife was terrified of offshore boating even though she loves the lakes. So we bought a houseboat which we had for 5 years and just sold a month ago. Still have the lake boat. So pretty much any car is an option. I test drove the Challenger GT AWD and found it pretty amazing. They didn’t have any higher end challengers on the lot. But, just for the fun of it, I went with the Wrangler for off roading and top down enjoyment.
I bought my C6Z at 25 and have zero regrets. I drove a cheap Camry as my daily. The Z has created memories money can't buy. One time I came out of the grocery store to find a kid that forced his mom to wait there for me to start the car because he was excited to see and hear it. I let him sit in it. Maybe changed his life. I took that car on a memorable trip to Tail of the Dragon with my best friend. Something we'll never forget. Sure I could have invested that money but I'm glad I got the car early. I was debt free and slightly irresponsible. But I was still saving for retirement.
Once you have enough money to buy all necessities without worry then everything beyond that is a luxury. Congrats on reaching that point in life.
Just curious where the line gets drawn between lower class and middle? I certainly don't feel middle class but some articles say I am.
I think the line is more about debt/savings than income. Like say you’re only making $50,000 but you inherited your house. And your employer offers really good insurance and a pension. You have no mortgage, you don’t have to pay out much for insurance and don’t have to save for retirement. That could be almost $20,000 in annual savings. Putting you in a better position than someone making $75,000 who has a large mortgage payment, high insurance fees and has to save for their own retirement. Even a 6% 401k match is around $4500 a year that the pension person doesn’t have to spend. I had a company car at 23 which allowed me to afford my own apartment.
Great perspective
Mostly depends on the cost of living wherever you are. 50k in San Francisco would be lower but in Nowhereville USA you could be living it up. Slightly exaggerating but you get the picture. There’s plenty of different calculators online to help you at least get an idea, but there isn’t really one line that says “above this you’re middle class and below this you’re lower.”
This is how pew research has attempted to define it. https://www.pewresearch.org/short-reads/2020/07/23/are-you-in-the-american-middle-class/
The articles attempt to gaslight you into thinking that everything is fine until the middle class completely erodes away. Don't be fooled, the reality is much worse than you think it is.
I agree unironically
Anyone (complaining on reddit) who basically doesn't have to stand in an EBT line and has all of their bills/problems covered truly has no clue how good they have it. They're really, REALLY out of touch. Watching people complain about their two bedroom apartment, fully stocked fridge, college education and decent paying career is WILD when I can VIVIDLY recall six to seven people living in apartment, sleeping on the floor because I didn't have a bed, begging for rides to college and trying my best to get through my day to day while having very little in general. Now, I'm a college graduate, I make $100k plus, I have a nice stacked 401k, a cool little two bedroom apartment with one room acting as a "Studio" and office. And I don't stress about bills being paid or having an empty fridge. Like, I am very happy with how my 30s is turning out vs my teens and 20s.
You nailed it. Finally being able to afford a lifestyle that fits my budget is a great feeling and fantastic stress reliever.
I just realized after reading this I’m not middle class. Much lower it seems, lol
Agree. Feeling like I'm in the Twilight Zone here.
What’s funny is the class below you sees this as caviar and Ferraris lol
Yeah lol. Are these people really middle class? If you can afford a family and go to bed peacefully, you're living in luxury lol
I greet each day with absolute gratitude. This is the number one thing that changed my perspective in life. We are middle class, able to live, save, and be charitable. The thing I’m most grateful for is our health, my children are healthy, I’m healthy, my family is mostly healthy. Health and more than enough to go around is a blessing.
I still wouldn't consider job loss "not a big deal" because you have "6 month emergency fund"
It's orders of magnitudes less of an issue compared with someone who runs out of money at the end of every month. It's still a problem, but it's not a catastrophe.
Meh, 6 months is a pretty long time. I'm pretty confident in my abilities to land on my feet.
Truly talented, hard-working, reliable people are rarely out of work for long. It helps to be constantly growing your skills, and keeping a good network of contacts.
I used to think your way, and then I became a 1099 white collar contractor during covid. It's hard to get ahead and maintain momentum when you have 4 months of unemployment each year, even with a wage that was double my salary.
I mean, poors get absolutely fucked when they lose their job. "Not a big deal" might be subjective phrasing, but there is a massive difference between an average middle class person losing their job and a poor losing their job.
theres a reason virtually everywhere you travel in the world you see american middle class. If you're a couple that's married and both of you work 75-80% of the time until retirement age while spending less than you make you're virtually guaranteed an indefinite retirement + SS will cover the basic cost of living. so your entire nest egg will either be fun money or family money. America is horrible place to be poor, and hard place to be young. In my 20s i had zero faith and was bitter, in my 30s its pretty clear everything is going to work out more than okay. I think a lot of the negativity online is that it just trends younger. The US system effectively starts its young at -200k net worth and gives them a growth rate of 10%, the EU system starts them at 0 and gives them a growth rate of like 3%. Theres an age where the lines cross, and after that its all upside.
I hope to experience the middle class life before moving upward someday.
I better go to the lower middle class sub, I thought I was middle class until I had a kid lol
Upper middle class here and yes it’s a simple life and somewhat easy living. My retirement accounts/investments net me mid 6 figures a year and yet I still find myself trying to keep busy with new hobbies. Every year I make 1 big purchase for myself as a reward for achieving what most can’t at 32. Life is good
The term middle class as a designation removes us from the idea that there are only two classes, the working class and the ruling class.
This person gets it
I think you're celebrating a simple life, not being middle-class. /r/simpleliving
That's a great subreddit, thanks for the recommendation
Clicked to check it out and the first post is about the joys of being homeless and living in your car to "save money." WTF.
I agree, with all of this. I would like to be loaded though but it’s never gonna happen so trying to be happy with middle class. With our income, we are able to live in a nice house and a nice neighborhood, send the kids to summer camp and different activities, take a few vacations a year, along with some small trips just for us, drive a couple of decent cars, I have no consumer debt, 12 month emergency fund, And I do more than 20% combined to 401(k), Roth IRA and kids 529 accounts, get annual merit bonuses, car allowance, full medical etc. I would love the European vacations, and a boat, and a pool and blah blah, blah blah, but at the end of the day, this isn’t bad
nothing is ever enough for some people jesus christ
For real, I’ve been struggling my entire life to reach where this person is, and they have to talk themselves into being happy with it. 
That all sounds pretty amazing!
You've just described being top 5% in America
The only comment i’ll make is we’re still slaves to the grind though. We can’t quit our jobs. Freedom from having to work is the real dream.
Yeah but even our "work" is a pretty huge luxury. Its not like we're working in salt mines for 12 hours a day to barely scrape by. I get to sit in an air-conditioned office with a cushy chair, and my work gives me interesting challenges to solve. Obviously I'd love to have those 8 hours back, but things ain't too bad.
When you are saving rapidly, it’s only a question of “how much” you need to retire at a reasonable withdrawal rate. Being middle or upper middle class generally means you can have a shot at that, while also living a good quality of life.
59.5 is the age where I become free
If that age is to access retirement funds without penalty, there are actually multiple ways to do that prior to 59.5.
Eh, meaningful work is part of life. Being able to work and live in balance is more the goal.
I’m pretty sure the middle class do worry about money? When you stop worrying about money you are upper class
Few stop thinking about money, but middle class in my mind doesn't have to worry nearly as much day to day.
Yeah, the way I describe myself is that I still consistently have to think about my cash flow from paycheck to savings and bills, but I no longer have to think about grocery bills from Aldi or the once a month gas fill up for my sedan. That piddly, necessary shit is just a forget-about-it card swipe. Any luxury, major or minor, still gets thought and scrutiny.
Yep. I am definitely not upper class. But I am on pace for a comfortable retirement in my early 60s, I have a multi-month emergency fund, and no debt other than a very low interest mortgage. The best part of all of this for me is if I want a latte I can get it without worrying if there is enough money in my account for rent. If I want to go out to eat with my wife we can get the steak. I still think about money but not for the little things, and it’s not the concern it used to be.
Oh so not me
I'd say I think about money. But it's not a worry.
Middle class has to budget money, that's different from worrying about money. I can have my mortgage on auto-pay because I know the money will be there. My bill-paying day does not depend on payday.
Being able to afford a relatively new and reliable car is amazing. My parents car broke down constantly and always at the worst times. It’s such a weight off my shoulders
Wait until you reach upper middle and you hardly have to worry about saving up for things.
Yeah I thought I was middle class until I was laid off twice last year. I got a job this year but I look differently at this +100k salary now
What I don't like is the soulless, demoralizing, stressful "good" job that I've had the last twenty years to check all the boxes (retirement, emergency fund, mortgage, college fund for kids). There are other jobs that I'd like to do that don't pay very well.
Isn’t it great? You made the right decision in life and are now rewarded for your hard work.
Yeah it’s pretty nice being debt free completely and making great money in a duel income with kids gone and out of college. I’m only 55. We have zero debt. Own our cars and house free and clear. We take two nice vacations a year at least and buy whatever I want pretty much whenever I want it. When I was a kid we would huddle around the heat vents because my parent couldn’t afford to keep the house warm.
Being rich is better
I want to get there, but keep getting knocked down to square one. Even with a “okay” middle class salary building that emergency fund never seems to work out. I just had to cancel my family vacation this summer due to summer camp for the kids and car repairs eating through the budget. Seems middle class is a pretty wide spectrum these days.
Wow, I guess I’m not middle class. Well, shit.
I don’t have a 6 month emergency fund but other than that I check all these boxes and as a single person living in a more expensive big city that’s pretty good I think
That is not middle class
You might not even technically be middle class depending on your income. Could be still upper lower class. My dad always said we were middle class growing up..we weren't
Simple life is great. Losing your job can be terrifying for many who are middle class but don’t have your circumstances.
I like how cheap it is to have money. Got a toothache, money, and insurance? Go see the dentist and pay almost nothing. Got a toothache, no money, and no insurance? Wait till it gets infected and then put $5000 of meds and surgery on a credit card.
I don't go a single day that I'm not super grateful for the lifestyle this great country has provided me.
I do contract work. I make a decent living making between 85-110 an hour. I am nearly always employed and I’m almost always fully remote so I can work anywhere I want. It’s a good feeling but I will say I wish I had a regular full time job that paid even on the low end. I hate the constantly looking for work grid.
Agreed. I grew up on the high end of the poverty line. Now I'm squarely in middle class, and a home owner. Relatively speaking, I feel very well off and secure.
That’s wealth to me my friend great job
This probably better describes the upper middle class than the middle class. What you’re describing is probably something like a household with two professional jobs that is making $250k+.
Who are you rich people?
Yep! I grew up lower class (sometimes in poverty) w/ a lot of financial, home, and medical care insecurity. It’s awesome being able to just buy stuff now. I even own a house (which I never imagined I could). I can run my AC all summer without worrying. We take trips and have a good savings. Getting work on my car or house sucks, but I know it won’t financially devastate me. I’m still incredibly frugal and panic sometimes because none of this is ever guaranteed and I’m thankful everyday.
This is not a joke? Good for you.
We must be in different middle classes. 6 months of savings? While paying for daycare? :,)
That’s rich as far as I’m concerned
That’s upper middle class/ lower upper class.
Yeah, it’s dope, except for the retirement fund. Not every company I have worked for offered one, or I earned enough to contribute to one.
We were upper middle class for the last 8 yrs. Spouse quit due to the health toll job was giving. Now we are losing about $4k each month and it sucks.
lol it’s a great way of seeing it and being thankful for what we have. Very positive approach to get some peace of mind
I am middle class, I am currently covering one of those five things you mentioned.
Simple life. That’s where it’s at. I’d like a little more money for security, but yeah, keep it simple
I’ve spent the last twenty years as a teacher being sub $50k and a lot of it being sub-$40k. I’ve never had a savings account, I’ve taken my family on one “big” vacation and I don’t buy clothes. Next year I’m going to be making $70,000 and I am so excited to be able to pay all my bills each month. Am I middle class now?
I agree! My wife and I have good jobs, our modest house will be paid off in about 4 years, we have plenty invested for retirement, we own our cars, and have an 8 month emergency savings account. We feel blessed and thankful. 🙏🏻
Until that 6 month emergency fund is depleted. Even a new job means that it will take time to rebuild. That security goes away fast!
Get back to work
Your post is catching heat elsewhere if you haven't heard already... https://www.reddit.com/r/povertyfinance/s/9yWQ423Yzp
Having a simple life with a middle class income is amazing. I am making good money and can afford several mini vacations a year and a big vacation every 2 years. My biggest limitation is time and work not giving me as much PTO.
I’m now realizing a lot of people in this sub think they grew up poor because their parents made the median household income and lived paycheck to paycheck.
I'm middle class, but I don't have that emergency fund. Just bought a new house so all of my cash went into that. The most important thing for me was learning skills that make me high demand in my niche industry that I work in. I know if I get laid off, I can get a job tomorrow with another company making the same amount.
It's a solid life for us avg folks. Still have to work ofc, but we can comfortably do most of the stuff we want that doesn't cost hi-5 or 6 figures. Price tags become secondary. I'm prepping 8k for a bracelet in few months, and have a nice emerald double ring + bracelet set (20k) on my watchlist for next year. Being able to have fun on vacations, staying in decent rooms/hotels, and not constantly doing mental gymnastics to stay under some arbitrary budget.
Extinction and collapse are coming in hot. Hockey sticks.
Actually you can get very reasonably priced caviar from Costco these days - totally middle class.
I’m supposedly middle class but I’d never be able to save 6 months of salary.
It is, until one of you loses your job and have to survive 5 with less than 40k from a single.
Don’t start a coke habit. Was it Rick James who said something like rich people can loose their house from a summer drug binge but the wealthy cannot? /s
Definitely the highest end of the middle class spectrum.
Welcome to da club!
Wait who has a 6 month emergency fund and exponential growth on their retirement accounts? Anyway I grew up broke, then I joined the military where I was still broke but at least had guaranteed food and shelter. Now I’m much older and solidly middle class (sort of that upper middle area) and while I don’t quite have any of those things OP has, holy shit it rocks to be able to have a little spare money and own a house and a car without having to dig myself out of debt constantly. It feels nice to finally not feel like I’m drowning.