It was not too long ago that most people considered the American dream to be a house with the traditional picket fence, vacation time and pay, a car, a couple of kids that you could send to college and maybe a dog.
Today the middle class is evaporating according to various surveys and statistics on this very topic. It’s so important that the Federal government has issued a task force to study the issue. But how one defines “middle class” may be the issue as to whether or not your in the middle class. Don’t look at money as the definition, but your lifestyle instead.
So how does one define the middle class if the amount of money you make is the benchmark? There are wide opinions as to what makes you middle class. Some say if you make 20% of the average household income and then some say it’s 80% of the average income, and of course there are people in the middle of that spectrum. Here are 6 benchmarks that seem reasonable to peg a family as “middle class”, regardless of your income level.
Home ownership is probably the first and foremost indication of being middle class, because it’s still part of the American dream. For one to move up from renting to home ownership is significant. Of course, depending on where you live, affordability of home ownership varies tremendously.
Owning a car has it’s own status symbolism as well. It gives a person greater mobility and freedom, and doesn’t tie you to any type of schedule that riding a subway or bus entails. Of course, there is also the value or equity in a car depending on it’s condition, mileage, and age.
College for the kids
A priority for any middle class family is sending their offspring to college. Each year of a college education can costs tens of thousands of dollars. The old school method of paying for college was saving up for it, but it doesn’t seem as though that’s the case anymore. Which college or university your kid or kids go to will be the ultimate deciding factor in costs.
After educating the kids and sending them off on their own, parents then start focusing on their own retirement. Social Security alone is not the nest egg that one can reasonable look at as a benchmark goal. Hopefully there is a 401k fund or extra savings somewhere to supplement social security. Some people might just settle for having their home completely paid for, others look at having maybe two homes, one as a primary home and the other for getaways.
Health Care Coverage
Health care coverage is one the most important indicators of having a middle class lifestyle. One reason for this is the catastrophic implications of not having health coverage. Like it not we live in a health for profit society where medical coverage costs money. Even people with health coverage can still find themselves spending significant amounts of savings, or worst, equity in their home if they have to deal with a serious illness and or prescription medicines for a loved one.
Ah yes the family vacation….how long has this been a major staple of the middle class? There is good reason, because it demonstrates that a family has disposable income, and have benefits from the job allowing them to take a vacation. The ideal situation of course is a paid vacation!
Things have changed dramatically over the years. Factory jobs were once the very vehicle that helped propel families into middle class status with just a high school education or even less. Of course we all know those jobs disappeared and most likely won’t be coming back. Plus the once powerful labor unions have diminished in numbers and strength as well.
Computers have taken over jobs that once demanded decent wages along with other technological advances. Developing your skills in a trade still works and of course their are other semi-professional and professional jobs that can automatically help you to attain middle class status. Don’t forget that college education, not so much just a college degree nowadays, but what degree can make all the difference in the world.