Determining Your Social Class: Identifying if You Belong to the Upper, Middle, or Lower Class

Over the past five decades, there has been a decrease in the proportion of middle-class individuals in America. Even though the majority (51%) still belong to this group, it is worth examining how these classes are categorized. For those interested, there are straightforward methods to determine this based on your financial situation, as suggested by the Pew Research Center.

First and foremost, it is essential to recognize that your present financial status does not indicate that you are permanently confined to your current social or economic class. There are actions you can implement to enhance your financial situation, like utilizing a budgeting app .

Here are three methods to determine your position within the social class hierarchy, along with additional advice for enhancing your financial situation.

1. Credit rating

Your credit score is a significant factor in determining the category you belong to. The FICO scoring model outlines the different ranges of credit scores for reference.

• Poor: <580
• Acceptable: 580 to 669
• Fairly satisfactory: between 670 and 739
• Excellent: 740 to 799
• Outstanding: over 800

Keeping that in consideration, here are the middle credit scores for different income levels:

• Income level is 658, which is considered to be low.
• Income at a moderate level is 692.
• The middle income is 735.
• Earnings: $774

In this context, individuals with moderate or average incomes can be seen as belonging to the middle class. On the other hand, those with low incomes are considered part of the lower class, while individuals with high incomes are associated with the upper class. Therefore, having a “good” credit score typically indicates that you are part of the middle class.

2. Net worth

An alternative method to assess your financial standing is by examining your net worth, which is calculated by subtracting your total debts from your total assets. It is important to note that it is possible to have a negative net worth. The Federal Reserve’s latest Survey of Consumer Finances provides the average net worth for each socioeconomic class.

• The income of the lower class is $16,900.
• The income for the lower-middle class is $58,550.
• The middle class makes an average income of $169,420.
• The upper-middle class has a median income of $300,800.
• Individuals belonging to the upper class have an income of $793,120 or higher.

3. Income

Your earnings can be a significant indicator in determining your position within the American social class hierarchy. The 2022 Survey of Consumer Finances also examined the middle income for individuals within different class groups. Below are the income ranges for each group:

• The lower class refers to individuals or households with an annual income of $30,000 or below.
• Individuals falling within the lower-middle class category typically have an annual income ranging from $30,001 to $58,020.
• The middle class falls within the income range of $58,021 to $94,000.
• The upper-middle class income range falls between $94,000 and $153,000.
• Individuals belonging to the upper class earn $153,001 or above.

Here are some factors that can assist you in determining the social class you currently belong to. It is important to note that your geographical location can significantly influence this classification. For example, earning $100,000 in a small town may make you feel wealthier compared to the same income in a metropolitan area such as Los Angeles. In the end, your perception of your financial situation is crucial.

Here are some steps you can take to enhance your financial position.

Assessing your financial well-being involves considering your credit score, net worth, and income. Improving these aspects is crucial, and while it may require considerable time and effort, the benefits far outweigh the challenges in the future.

One effective way to enhance your net worth and improve your credit score is by prioritizing the repayment of consumer debts such as credit card balances. Additionally, establishing an emergency fund is crucial for strengthening your financial situation as it can serve as a financial safety net for unexpected expenses, ultimately boosting your overall net worth. If you have already achieved these goals, you may consider initiating or continuing other financial strategies. putting money into stocks to increase your wealth.

Dealing with income can be challenging, especially with the presence of misleading job listings and widespread layoffs. However, income is also a significant factor with a strong influence in this situation.

Requesting a salary increase by presenting evidence of your strong performance or finding a better-paying job elsewhere are great strategies to consider. Not only can this help improve your credit score and overall financial worth, but it can also accelerate your progress in advancing to a higher socioeconomic status.

Understanding your current situation can be valuable, however, the significance of these data points depends on your own perspective. It is your responsibility to determine what will have the greatest influence on both your daily life and financial prospects.