Rethinking the “The Middle Class,” Part 1: The Definition

It started almost a year and a half ago, when my husband’s health insurance coverage kicked in. With that massive expense covered, we had finally arrived at the financial reality of our lives. Before that we were always in a transition of some kind: my husband finding a new job, maternity leave (without pay), working 80% to be home more after the second kid, purchasing our family’s health insurance out-of-pocket (to the tune of $2.5K A MONTH). When my husband’s coverage FINALLY kicked in, we were both earning as much money as we could expect to make for the foreseeable future. We had arrived. And yet, we were still living month to month, still watching the reimbursements from our tax sheltered child care account, and even most of our tax refund, going to unexpected home renovations or paying for our homeowners insurance when it came due. We didn’t feel we could put as much as we wanted into retirement and still pay the bills, and we weren’t putting anything aside for our kids’ college funds, let alone into savings.

I didn’t understand it: How could we barely be making ends meet? We had jobs that paid decent salaries. We were paying the mortgage on a modest house in a not-so-great part of town. We didn’t go on vacation. We didn’t buy extravagant things. Shouldn’t things be… easier? There was such a massive disconnect between the life I had expected and the reality of our financial situation, and every time I tried to investigate what might explain that disconnect, I came back to one thing: the idea of the middle class. I identified as being middle class, upper middle class even–and with two advanced degrees!–and I seemed to believe that along with my membership in that class, I had been promised a certain quality of life. And I didn’t expect we’d have to struggle so much to barely maintain it.

I grew up assuming I was middle class. Besides our stint abroad, our childhood seemed very “normal.” We had a nice house, two cars, we attended public schools, we were told we could attend state colleges or universities (without taking on debt), we took vacations, and we didn’t seem to think about money. It wasn’t until I was a senior in college and my father had been out of a job for over a year that my parents denied me something because of a lack of money: I was to graduate on time or foot the bill for anything I took in my fifth year. I promptly abandoned my Spanish minor and graduated in four years (quite a few of my friends went on to be “super seniors”).

I vaguely remember a conversation with my husband, early in our relationship, in which I asserted that my parents were, indeed, middle class, after he suggested we were actually better off than that. Even then I was protective of my inclusion in the “middle class” club. I bristled at the idea that we had more than most people; in my mind we were the same as everybody else. And I suppose that was true, because everyone around us was upper middle class–or better off–just like we were.

I believed I grew up middle class, and continued to be middle class, until this past year when I started googling the term to see what exactly the middle class was. While I’m still not clear on exactly who can claim ownership in the middlc class–no one is!–I’m pretty sure most people would not consider me a member. It seems, I am irked to say, that I am solidly upper class.

How can that be? How can a family that struggles to make ends meet, and isn’t saving, be upper class? Well first, let’s look at the numbers.

The range of incomes that delineate the middle class is not widely agreed upon. Some economists consider those making the middle 50% of incomes to be middle class. Others determine that those who make +/- 50% of the median income are middle class. The numbers I saw referenced most widely were provided by Pew Center Research, which performed a study on the middle class using government data in late 2015. Their income range of two thirds to two-times the national income median provided a spectrum of $46,960 – $140,900 a year for a four person household.

We are a family of four, and we make around $175,000 a year–we fall well outside that range. But we also live an area with a very high cost of living. Surely in San Francisco, where the median price for a home is $1.1 million, we are considered middle class. Well, CNN Money’s Middle Class calculator doesn’t think so. When I plugged in our salary and county (San Francisco city and county comprise the same area), I was informed that the upper threshold was $153,866. Even in the crazy expensive city of San Francisco, I’m still not considered middle class, at least not when it comes to how much I make.

Of course, income is not the only way to determine who is middle class. In fact, there are many economists who argue it is not the best indicator, because it fluctuates so much over a lifetime. For some economists, wealth is seen as a better indicator of economic status, as it takes into consideration inheritance or trusts that aren’t recorded on your W-2. An article at CNN Money presented one economist’s range –those that fall in the middle three fifths of the wealth spectrum (0$ to $401,000)–as being middle class; the lower fifth are in debt and the highest fifth are considered wealthy. While the article does not explain how to determine one’s “wealth,” I’m assuming a mortgage does not count as “debt” since it is a secured debt (my house is an asset held as collateral by the bank). If that is the case, we fall on somewhere in the range of middle class, as we have no unsecured debt, but no where near $400K in savings.

That same article presented three other ways that economists and federal agencies determine the middle class: consumption, aspiration and demographics. The aspirations of the middle class (illustrated in a cute little infographic)–home ownership, car, retirement security, family vacations, and college education for the kids–definitely encapsulates my understanding of the middle class, but I think it is less helpful in differentiating the middle and upper classes than it is the lower and middle classes.

I found the demographics section, which combines sociology and economics, most interesting. This infographic used age, education and race to determine if you are middle class by sending you through a series of yes/no questions until you finally end up in one of three categories: stragglers, middle class and thrivers. The most interesting part was there was no race distinction for people under 39. and both the White/Asian–Over 39 demographics who finished college were considered “thrivers,” (and those groups didn’t need to finish college to be considered middle class), while “any race” under 39 who finished college weren’t considered “thrivers,” but instead where deemed “middle class.” Sadly, those under 39 who didn’t finish college were delegated to the ranks of “stragglers.” According to “demographics” I am middle class, though I wonder if our post-graduate degrees (which were not accounted for in the infographic) would have pushed us into the “thrivers” category.

So, am I middle class? Probably not, but I’m still not sure. And the more articles I read, the more I realized that no one else is either.

So, why is it so hard to define the middle class? More on that tomorrow…

Does seeing the actual numbers ($46,960 – $140,900 a year for a family of four) change how you view your membership in the middle class? Does that range surprise you?



  1. Look I get that San Francisco is insanely costly….
    But being totally honest here, I blurted out holy shit! when I read your income. All this time I thought maybe your combined incomes were more in the 100k range (I guess I should have paid better attention) and that’s why you were feeling so pinched all the time.
    I’m thinking you can make this work noemi…..and thanks for discussing the topic. I believe this sort of thing needs to be discussed more in everyday life.
    Kay in Massachusetts

    1. That is fair. It is a shit load of money! What we actually net is $100K, and that includes take out for our pensions (and a modest $350/mo take out for my retirement). Our monthly take home is about $8,500 a month but our mortgage (plus escrow–we pay $7K a year in property taxes) is almost half of that. And childcare is another $2K a month and life insurance, plus home and car insurance are $500 a month. So that leaves us with $2K a month to buy everything else and save. Our grocery bill hovers around $900/mo (trying to get that down) and gas is around $250 (we only have one car but I commute 50 miles a day round trip). Our student loans are around $600 (but mine will be paid off this year). Right now we get by (and we never carry a balance on our credit cards), but we aren’t really saving. Or we do and then the house needs $5K in repairs and the savings is gone. That is our problem. But you’re right. We can do this. We just need to figure it out.

      1. For what it’s worth I thought your incomes were $150K-$160K, so same ballpark. Although in my mind, I view $80K as the dividing line between an okay salary and a really good one. I don’t know why that number is so significant to me.

        1. That’s interesting. For me the dividing line is $100K, but maybe that is because so many people in my area make $250K+. Fucking tech boom.

          1. It’s ridiculous, because I am a lawyer and I know a lot of big firm lawyers. I guess I meant in the non-profit/government world (which I am now in), I view $80K as the threshold between “I don’t make a lot but I feel good about what I do” and “I am an established, nonprofit professional with a decent salary.”

            1. I think in the non-profit world $80K does sound like a REALLY good salary. It would be here. My husband was working as a lawyer at a non-profit and he didn’t make anywhere near that much and knew he never would, which was one of the reasons he felt compelled to leave.

      2. I’m sorry….I had to laugh out loud. You live in SF and pay $7K a year in property taxes and I live in a suburb of Chicago, have a townhouse where I don’t even own the land and I pay $6K a year in property tax. By numbers, as a single person I would be pretty well off, but as I am a single mom, I’m fucked. Childcare is 50% of my net income, and my car payment and mortgage are the other half. Now my kids’ dad is supposed to pay half of childcare, but will not be doing so for the foreseeable future. I receive child support payments for which I use to pay half of all child related expenses, but with only about $400 to cover bills, groceries, gas, and everyday expenses, I have zero savings. It’s definitely a challenge to figure out, but it’s doable. I’m certainly not where I want to be financially, and I used to think of myself as middle class, but now I’m not so sure. Good luck though, and thank you for posting on this topic.

        1. Good luck to you too. I know you’re in a really difficult position right now. I hope you find some relief soon.

      3. Our property taxes are $8,500, and I think our house cost $100,000 less than yours! My dad always said Iowa property taxes were high, but I had no idea until comparing to yours! Holy crap!

        1. That is crazy! I believe in SF they are around 1% at the state level and then cities add to the. I honestly am not super clear on how much we spend on property taxes because it is part of our escrow payment and then the bank pays from that account. We usually get some money back from that account after our property taxes have been paid (just $50 or something) so it’s not something I think about that much.

          Low property taxes in CA (especially the effects of Prop 13) have totally decimated our public school system. We don’t make nearly enough, and it’s totally devastating to funding. CA spends less per student than all but two other states. And it has one of the biggest economies in the world. It’s deplorable.

    2. We just got my husband’s W2, and we make more than $150k a year…and we couldn’t make living in SF work long-term (we ran the numbers last year for fun). There was recently an WSJ (?) article that made a pretty good argument that it is cheaper to live in Las Vegas and commute to SF on a daily basis….rather than live in SF.

      If I’m being honest, I only know 3 people/families who live in SF (except Noemi)…all of them have significant personal wealth.

      1. Yeah. It is very costly. I appreciate you saying this. I know we could spend more widely, but it does seem harder than it should be making as much as we do.

      2. There was a similar article recently that showed it was cheaper to live in Madrid, Spain (where I live) and commute to work in London than live in London. Some cities are just insane.

      3. I know a family that did a weekly fly-in commute from the Midwest to SF because of the cost of living. People really do that! I was startled at first, then they showed me the math, and it sadly makes sense.

  2. Wow- seeing your numbers makes me realize how costly it really is to live in your city. You would be very wealthy here if you made that same salary. We make significantly less than half that, and yes, we struggle but make it work.

    1. Yeah, it starts to add up. It seems like so much money to spend and then everything is so expensive. My daughter and I have different spring breaks and I’m looking at camps for her when she is off–they’re all $300-$400+! For a week! That is just so much money. I bought her swim lessons recently (she can’t swim, these are to make her safe in the water), and it was over $500 for 15 30 minute lessons! Vision therapy is costing me $180 a week! That is why we don’t have our kids in any activities. It really adds up.

      1. Yep- all the kid stuff totally adds up. I don’t have C in any activities other than 2 day/week preschool (and we have a scholarship) because we just can’t afford it. I’m with you on the swim thing though- we’ve got to figure out swim lessons for safety.

  3. I definitely think you’re middle class, but upper middle class. A lot of sources divide the middle class into lower-middle, middle, and upper-middle, because it’s such a big group. That may be part of why this is confusing. Culturally and educationally, you seem upper-middle to me. Financially, you’re at the beginning of the wealth-building phase of life and struggling with kid expenses– totally normal. And of course, you’re dealing with a bit of a hangover from your earlier expenses and the shopping problem, which is now under control, you said?

    Wealth is a better measure than income, for the reasons you stated, but it does vary over a lifetime too, of course. I do think mortgage debt counts, because secured debt is still debt. You still have to pay it. So it’s negative wealth.

    1. The shopping problem is under control, yes. Honestly, what we’re recovering from is paying out of pocket for our health insurance for the past 8-10 years. (My husband 8, me 10 and of course the kids since they were born). That started getting REALLY pricey about five years ago and was eating up a considerable amount of our monthly income. Since my daughter was born it had been $1K a month at its lowest, and increased significantly every year until when my son was born it was up to $2.5K a month. We were paying that for over a year! That is over $30K on health insurance in one year! I would estimate that we spent close to $75K on health insurance coverage in the past five years. I really think that is what was killing us for so long. Now that we don’t have those costs, we can make the changes necessary to start saving, but before, when we had that strain on our budget, it was impossible for us to save. Also, during two of those years I was at 80%, and I took six months worth of unpaid maternity leave during those five years, so yeah. All of that adds up. Now things should be easier.

        1. My husband worked at a non-profit when we had our kids and had no coverage there. I work for a small school district and our coverage was so bad that it was cheaper for me to take a pay out and buy my own at first (it was a SIGNIFICANTLY better deal for a long time). Even when we had our daughter, there was only a basic “family” option at work and that was so much, and was so poorly subsidized by my district, that it make more sense to buy catastrophic for my husband and regular coverage for my daughter and I (and still get the pay out). My husband’s job with the city was “temporary” for six months and then it took them another six months to finally start covering us, so a year of him working there we didn’t have coverage. Later we kept the pay out, even when it was starting to look like buying from my district would be cheaper, because now the pay out isn’t offered, so if I ever gave it up, I couldn’t get it back. I’m glad we kept doing that, because now my husband has great coverage and we still get the $5K payout from my district (which I include as part of my “salary”), which is a significant amount of money.

  4. That range does surprise me, specifically the lower end of the scale. That’s surprising. I’d figure anything lower than $60k or less, would be considered low income.
    And wow, San Francisco is extremely expensive! I know I couldn’t do it so I tip my hat to you.
    However, your net take home, $100k, is actually what we gross. So, me, just myself – take home is $3,100 a month. I make it work…savings, mortgage, gas bill, utilities, food, etc. I live month to month as well and The Hubs paycheck helps, about $1k a month and he saves the rest of his paycheck. We struggle and scrimp and save for things (swim lessons are a must!) but we’ve cut down our grocery bill in half (need vs want)
    What we’re doing is cash and carry. Doing the whole Dave Ramsey approach, pay off one bill extremely (smallest debt first) then tackle the next when that one is done. It’s helping and we don’t feel SO overwhelmed. You can do it!

    1. Do you mind my asking how much you manage to save a month? I’m trying to figure out what a good percentage would be, both to start out at and as a final end goal. You absolutely don’t have to share–I thought you might not mind since you volunteered your other financial specifics. 😉

      Also, if you could share how you cut your grocery bill in half I’d love some tips. I thought we did so well this month, I’ve found our rhythm and I know what we eat every week and I very rarely buy food we don’t end up eating anymore, and still it was $950. I was so disappointed. I know we could cut out a few non-essentials, but we buy almost no snack foods, no sodas, no juices. I’m just not sure where to cut costs, without ditching things like organic milk and cage-free eggs. God, I hate grocery shopping.

      1. I’m also surprised at your grocery bill because you don’t seem to eat much meat or fish and your kids don’t have big appetites (my son can eat 8 oz of salmon — it’s insane). I wonder why it’s so much.

        And, yes, expenses like spring break daycare and vision therapy and house repairs seem to undo everything you work for. It’s so frustrating. Have you had to do El Niño work this year? It adds up.

        1. We just realized that we have water damage under one of my daughter’s windows. We didn’t see it for a long time because there is furniture against that wall. We haven’t called a contractor yet to see how much it’s going to cost. 🙁

          I know my grocery bill is high. We definitely buy too much processed/convenience type foods. I need to work on that. A lot.

      2. Between The Hubs and myself, we save about $3k a month. Keep in mind that he only contributes $1k to our checking and saves the rest. And then I save about $1k as well. This also doesn’t include investments…like our stocks.
        I cut my bill by using Amazon Subscribe & Save on paper products (towels, toilet paper, etc.) and saves a lot. I buy generic brands and not a whole lot of meat. I spend more on fruits and veggies. I take advantage of specials & try to go to the less high end stores (I love me some Whole Foods) Anyhow, we don’t buy organic milk or cage free eggs but I want to but don’t. I need to make the effort to change this.
        I also enforce that whatever we want – beer, trail mix, chips (wants not needs)…comes from our own personal budget. Once budget is blown for the month, it doesn’t come out of grocery budget, you just have to wait. I hate grocery shopping too.

        1. If you make $3K a month and save $1K, and he only contributes $1K to the checking and savings, that means you can pay for your mortgage and everything else on $3K a month. Is that right? I’m just trying to make sure I’m understanding what you said over the two comments. I’m assuming you have rent or a mortgage, right? That is an impressive amount to save, especially with two small children. Do you have childcare expenses? It’s insane to me that my mortgage and childcare costs are DOUBLE your entire monthly expenditures. Am I understanding that right?

          You guys are doing a great job saving. I need to figure out how to put something away, and soon.

          1. I bring home $3k net. Gross (insurance, life insurance, 401K, directed savings) all gets taken out beforehand…I’m left with $3k. He contributes $1k to checking…the rest goes to savings, so about $2k a month. My mortgage is a little over $1k. We put a huge down payment, saved for 7 years to do so, but it was worth it in the end. I do not have child care expenses as my inlaws or parents watch my kids on holidays. I do pay for schooling (for the little one) and get my parents or inlaws to pick them up after school, where they provide 2-3 hours of daycare. That’s how we save.
            That’s going to change however when Summer comes. I’m not looking forward to it and I don’t know if we CAN continue to save with childcare.

  5. Well we were def middle class growing up even accounting for the increase in range since then. And yeah, if the most you had to worry about college expenses was not getting a fifth year…not middle class.

    And, based on that range plus the other factors I guess we are “upper class” now.

    Does “wealth” include retirement savings?

    I live in an expensive area that includes VERY expensive sub-areas (25M homes etc) so maybe that clouds my view. But I need to really recognize that despite our struggles we are very privileged.

    I think part of it is that how I grew up (still very privileged compared to many but not upper class) sticks with me. My college experience was very diff–never occurred to me to stay past 4 years, no one footing the bill, and the entire time I was living under constant stress of not having enough money to continue. So I still kind of have that mentality (and I’m trying to save enough so my kids’ college experience is a lot more secure). And ugh, I’ll be facing the “camps” issue soon.

    1. I look back on how I saw my childhood and laugh now. How could I have thought we were middle class? I guess because everyone else had what we had or more. Also, my dad was unemployed a lot, so that caused stress, but it didn’t trickle down to us in specific ways. Still, it was frequently an undercurrent. Also, my parents grew up very middle class, maybe even lower middle class, so I think I incorporated that into my understanding of our financial situation. Still, the comparison with others is probably the biggest part. Tomorrow’s post talks a lot more about that.

      I also have to recognize that we are very privileged. I do, but that realization can be faded by the glitz and glamor I see all around me. It’s weird where I live, because we are clearly better off than most of the people in our neighborhood, who are clearly living in houses that have been in their families for a while. And yet our peers make, for the most part, a lot more than we do, and have more than we have. The dichotomy is striking, and I’m never quite sure how to see myself.

  6. I definitely think retirement savings counts as wealth. It’s very hard to calculate the value of a pension, because you don’t know exactly how much you’ll get– it depends on a lot of factors including how long you live. It’s not like an IRA that has a dollar amount. But I think paying into a pension plan counts as “saving”, at least in the sense of giving yourself a pat on the back for it.

    I also think your income isn’t so high for SF. We make similar to that in an expensive east coast city and with student loans and two kids in daycare, it really is tough, even though our mortgage is quite reasonable and all of our kids’ activities are free. The travel (only to see grandparents) is killing us.

    1. The pension thing is really tricky, especially since I pay into my pension IN PLACE OF social security. So I will ONLY have my pension when I retire, and no social security to add to that. Of course I’m not paying into social security either… My husband pays into social security and a pension plan. He maxed his 401K when he was at the law firm (for two years) but hasn’t been contributing to retirement (outside of his pension) since then. He still has way more in his 401K than I have in my 403B though.

      I appreciate hearing that someone else with a similar financial situation also struggles, or at least finds it challenging. That is the conversation I was hoping to have with these posts–an honest conversation about how hard it can be, even when you make a lot of money. Thank you for weighing in.

      1. The ss thing is tricky. I have 20+ years in Pers plus I pay into ss, except for 5 years with an employer where my bargaining unit didn’t pay into SS didn’t. But there’s a windfall provision which means I’ll get less from SS due to my pension. I don’t know the details although I really should.

  7. My household income is just a bit higher than yours. I understand how things would feel like a constant struggle for you. I don’t live in an area with a particularly low cost-of-living, but it certainly is much, much lower than the Bay Area (my mortgage is about half of yours, for instance) so my household is solidly outside of the middle-class.

    But my day-to-day existence feels very middle-class: nice but not very big house in a desirable urban neighborhood, two decent but not fancy cars, two children in public school and maybe one vacation per year. No fancy clothes or nights out on the town or major indulgences of any kind. I think these external markers are what make me feel middle-class even though I recognize that by the metric of household income I clearly am not.

    My lifestyle is also very similar to what it was five years ago when my household income was quite a bit less (in the upper end range of middle-class) and expenses higher (two children in child care). Thinking about what is different between then and now, it’s almost entirely my ability to save: I now max out my retirement savings and am able to save a decent amount over and above that. With that in mind, what really makes me upper-class aren’t the external markers of the wealthy, since in that regard I’m very similar to the truly middle-class, but instead it is my ability to save for the future that is the distinguishing factor.

    So it all comes down to wealth. I think the economist who posited that the middle-class are those with wealth of $0-400k is providing us with a much more useful metric than household income of what it means to be middle-class. Using that metric I am still middle-class, but just barely, and will probably pass out of that class sometime this year. When I do, I doubt I’ll feel a sudden sense of financial security. I do recognize, however, that my ability to save sets me apart from most people in this country.

  8. I’m actually surprised by the upper end of that number when it applies to the whole country—$140K a month is a HUGE income in lots of parts of the country and would definitely let one achieve a very upper class lifestyle & accumulate wealth.
    I knew our family did better than “middle class” growing up—most of my classmates had never been on an airplane by the time we graduated high school. Many did not go to college, much less graduate school! Went on to work at “jobs”, not “careers” (I think this is a HUGE distinction in the “feeling” of class)
    I think a lot of us live in a quite a bubble (and this blog-o-sphere is probably even worse, a very very select group of highly intelligent & overachieving women here!) and do not realize that a VAST number of people honestly cannot make ends meet without debt, and have to make much tougher choices and bigger sacrifices.
    I think a lot of dissatisfaction comes from many of us growing up more “upper class” and finding ourselves just above the “middle class” border now (we gross similar to you, we have a lower mortgage but other costs seem similar if not higher; no pensions, so just our retirement accounts in terms of “wealth”) and finding it hard to afford the things we had as kids. The other part, of course, is that you are absolutely still young, as someone said, beginning the “wealth building” phase—which you WILL get to once you pay off your debt, and paying for childcare, etc… I know my parent struggled HARD during the early years—we did NOTHING and lived in one bedroom for years. What I’m remembering as the “easier times” came a lot later. We are also impatient 😉

    1. Amen to all of this. 100%. I wrote about a lot of the last part of your comment in my third post (yes, I’m verbose) so I won’t talk about it too much here. 😉

      I’m not sure why Pew used 200% of the median instead of 150% (and 2/3 instead of 50%, for that matter). Maybe because so many areas do have such a high cost of living? The range really is incredible.

  9. The pension thing versus social security is tricky. Are you unable to collect on both if you have contributed to both? Do you have ANY social Security quarters from summer jobs or jobs at college or such? Because you might want to look at ‘tutoring’ and paying both halves of the social security costs in order to rack up your quarters as both an insurance benefit for you and your children in case you were disabled or died young ,as well as achieving a minimal income in addition to the teacher’s pension. But you need to run the numbers carefully on this idea. Social Security quarters can make a difference that makes actually netting zero income now worth doing. The ‘grumpy rumblings’ blog might have some commentary on this.

    1. In my case there wasn’t a choice–at the public agency I worked for my bargaining unit as a group didn’t participate in SS. And there is a windfall provision resulting in less from SS.

  10. Your household income is quite nice. I just think that in HCOLA it doesn’t buy as much and it certainly doesn’t get the luxuries associated with being upper middle class, or even middle class. I just think the sad reality is that few important factors — stagnant wages, demise of pensions (and fairly steady jobs) and student loans/cost of college — means that the middle class lifestyle will NEVER be the same as previous generations.

    1. It IS quite nice! That is why I’m surprised that we have such a hard time putting a significant amount away. I think it will get easier when we aren’t paying child care. Maybe then we can really start saving. And I think you’re right, that with stagnant wages and the rising cost of health care and higher education, the middle class lifestyle won’t be the same as in previous generations.

  11. In Britain, where I live, middle or working class is a cultural identity. It is linked to what you earn, but not defined by it. There’s general agreement that times are hard financially for the middle class though. And we don’t even have to pay for healthcare.

    1. I have found the conversation about England’s social class so interesting. I think America doesn’t have that as much because it’s a younger country that was first settled by people who were trying to make their own fortune. I think there probably is more of this attitude on the East Coast, but on the West Coast it’s almost non-existent, maybe because this area was settled by the people who wanted to get away even from the attitude of the East Coast and find their fortunes out west. I do think California is the least weighed down by notions of social class, but I could be wrong.

  12. I have to agree that when I saw your salary, I was a little in shock about how high it was. But I went and ran a cost of living comparison between San Francisco and Huntsville. Your $175k there, is like $68k here. So adjusting the number to local dollars, your struggles sound about right to me. Enough that it feels like you should be doing better than you are. On the flip side, my salary here is equivalent to around the $250k there that you describe, which also sounds right. We don’t have child care, car payments, or student loans, and our house payment is $550 a month for a 1700 sqft house (house insurance, taxes, and mortgage insurance are all already included in that cost). So we are able to cover all our expenses and save about 15-20% of our income without feeling any stretch.

    1. And I have to admit, that when I saw how much you pay a month for a 1700 sq ft house, I went a little bug eyed. You couldn’t rent a corner of a studio in the area of SF where people are shooting heroine outside your door for that much. Not unless someone has been on the lease for 20 years. And if that is the case, you have to live in constant fear that you’ll be evicted when they sell the building.

      It’s awesome that you cover all that with only 15-20% of your income. You’d have to make a lot to buy or rent something in SF on that percentage. A lot, a lot.

      1. The calculator I used said that San. Fran housing is 454% higher than here, so it’s a huge factor in the COL difference. And just to clarify, we save about 15-20% and spend the other 80-85%. We probably *could* save more if we tried, but it’s not something that we are interested in. I spent my childhood at the poverty line and I don’t want to relive that unless it’s absolutely necessary.

  13. Well, I live in Spain so my experience isn’t comparable really. Here we are, I think, lower upper class in terms of income (average 4-person household income in Spain is around $25000!!) but our lifestyle is not upper class at all (as was mentioned I think in a previous post, “upper class” has a different connotation in a country where people are counts and dukes and the like…). Also, we live in one of the most expensive areas of the city, but people around us appear to be much higher class (send their kids to private schools, drive fancy cars, have au pairs, etc.). But there’s also a subset of society that is very wrapped up in being “posh.” FWIW, we don’t make anywhere close to the upper US limit of $140,000. (Is that net? We pay a shit-ton in taxes.) But it’s probably also worth noting that we were close to that limit 9 years ago when we left the States, as 2 engineers with around 5 years experience each, so I’m sure we’d have passed it by now had we stayed (in South Florida, not a cheap area).

    Growing up, with two public school teachers, I think we were upper middle class. My parents’ peak gross income was I think somewhere around $160,000 combined (when we were in high school so they were in their late 40s), both had Masters degrees and had maxed out on years of experience and additional education. We lived in affluent suburban St. Louis. We got (very old, used) cars when we turned 16 and traveled a good bit. I went to an expensive east coast school which my parents helped pay for. My sister went to an in-state public school and besides scholarships my parents paid for it in full. So, yeah, I think we were upper middle class, but maybe I’m wrong about that. Maybe we were lower upper class? Perhaps my experience at said east coast school changed my thinking because I was around kids who came from SO. MUCH. MONEY. (A good friend got a million dollars for graduation. O_O)

    I do have to say that I am shocked, mostly, that half of your income goes to your mortgage. That would be an absolute nightmare for me and a huge stressor. We just bought our new place and the mortgage is around 22% of our income. Banks would finance up to about 40% but that felt terrifying. You’ve mentioned that you have a rental unit, right? Does that income figure into your calculations?

    An interesting post!

    1. You were in St. Louis?! Then you know I have to ask, where did you go to high school? 😉 My mom paid her way through Cor Jesu and my dad went to Vianney. My extended family all still lives in the suburbs around St. Louis: Kirkwood, Webster Groves, St. Charles. I spent my summers there growing up. 😉

      I’m so jealous you live in Madrid. I spent my junior year there and absolutely adored it. It’s a dream of mine to spend a year or two there again some day, but I doubt we can make that happen.

      I’m assuming those numbers are gross, not net. And the bank financed us at a similar percentage of our income, but my parents “gifted” us part of our 20% down payment so we wouldn’t have to pay mortgage insurance, and that loan is 15 years, so it’s a higher monthly payment. I figure that into our “mortgage payment” as we have to make it every month, but we’ll be done paying it off in 12 years, not 27. And yes, I factored our tenant’s rent into our “income.” It’s definitely a higher percentage of income than we wanted, but nothing would have been available for cheaper that didn’t need $100,000+ worth of work just to make it inhabitable. And rents for places were just as high, so we went for buying. Housing here is really expensive.

      1. Small world!!

        Ha! Of course you had to ask!! I grew up in West County, in Chesterfield and went to the public Rockwood high school there (which opened my freshman year). I imagine we very well may have acquaintances in common. My mom taught at Kirkwood High School for something like 26 years and retired in the Spring of 2013. My dad taught at Ladue Middle School (and coached football) for a couple decades as well, but retired longer ago, in 2008 or so? My parents are still in the area and my sister lives in Clayton.

        Housing does indeed sound high. It’s fabulous that you will have that other loan paid off so much sooner. What a relief that will be!

      2. I didn’t realize you had a 15 year mortgage. I know 12 years seems like a long way off, but you will still have kids at home then so it’s roughly the same stage of life. That should make an enormous difference in your wealth.

        1. I don’t have a 15 year mortgage. When my parents “gifted” us $100,000, they refinanced their mortgage as a 15 year mortgage so we are paying off that $100,000 of our mortgage in 15 years. The rest of it, the regular loan from the bank, is a 30 year fixed mortgage. We used the gift money put down 20% so we could avoid mortgage insurance, which would have been roughly the same as the payment we get to my parents to pay off the $100,000. The mortgage insurance would’ve been wasted money, this way we are paying down the cost of our house. so in 12 years our mortgage payment will be $700 a month less than it is now.

  14. It seems odd that say, $100K is considered the same as far as middle class goes across all of the country. I guess that technically $100K is $100K, but in terms of buying power (or saving power), of course your $170K buys you much less where you live than it would in other parts of the country. It’s like when my BIL who lives in NJ insists things cost about the same there as they do in NC. Um, no, we aren’t paying $800,000 for a house the same size as ours that had major structural issues and has less land.

    I grew up probably lower middle class. I never wanted for anything and we ate well, but I remember how terrifying it was when my mother lost her job one year. I knew that as far as college was concerned, it was scholarships or loans. The biggest indicator to me was that my mother kept pushing me away from jobs with less earning potential and wanted me to become a lawyer.

  15. I grew up lower-middle class, and definitely consider myself middle class now. Last year our AGI was about $45,000 (part of that due to write-offs from my husband’s business trying to get going, but not much), and this year that thankfully about doubled to $90k, but we still live in a 1,400 sq. ft. home that cost over $300k even though we live in a town of 1,000 people with dirt roads. Yeah. So a LOT of our income goes to cover mortgage right now, and I definitely feel like we are solidly middle class (and per that calculator we are right in the middle of middle-class for my area). I can’t even fathom making $175k, though I damn well hope we do 5 years from now. Only time will tell. My salary is maxed out where I work, but my husband being self-employed gives us a lot of stress (no guaranteed salary) but definitely also gives us room to grow too, which gives us hope.

    1. It’s nice that your husband’s income has room to grow. My husband and I are almost maxed out, though we are slowly getting a 9% raise over there years (1.5% every six months), which is supposed to help cover the fact that we haven’t had a COL increase since the economic downturn, despite costs in our area skyrocketing in the past five years. I have to say that know neither of us will ever make much more is hard, but it also allows us to be realistic about where we’re going to be, which I think helps us make pragmatic decisions about what we should be doing now. Still, I wish we could hope to make more money some day, since we can’t really afford a lot of the “fun” stuff, right now. I hope your future income hits the numbers you’re hoping for. That would be wonderful.

      1. Yeah, I made a comment to our tax accountant last week about how crazy it is that at 90k I still feel broke, and he said that in our area that’s very typical – low 6 figures means you probably have a little financial stability, have paid off most revolving debt, and can afford your mortgage, but you need much more to be comfortable here. I make about $35-40k and that absolutely won’t go higher, so the hope now is that my husband’s concrete business will continue to do better and we will make more income that way. Bills bills bills…

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