Stop Trying to Reinvent "Middle Class"
I've recently started to notice a very strange and alarming trend: many people describe "middle class" as a function of possessions, rather than as a function of income. Often times, the word lifestyle gets thrown onto the end of "middle class." And typically when "middle class" transitions to "middle class lifestyle," I hear people babble incessantly about the need to live in a nice suburb, put their children into good schools, drive new cars, have all of the latest gadgets and maybe take a couple of vacations every year. This is frightening. Somehow, the idea of middle class has seemingly merged with the concept of keeping up with the Joneses, which can lead to incredibly irresponsible consumer behavior.
The Middle Class is Actually in the Middle
I feel almost foolish for writing that header, but it is so often misunderstood. In the United States, the median household income, the real middle, is $51,939, according to the U.S. Census Bureau. For simplicity, let's divide the world into three classes, lower, middle and upper, based on percentile. We can assume that the lower class would represent the lowest 25 percent, the middle class would represent the 25th - 75th percentile and the upper class would represent the 75th - 100th percentile. That would make the income range for middle class approximately $25,000 - $90,000. The middle 50% of all Americans fall into this range, and so this is the middle class. Simple.
The Middle Class Isn't Shrinking
Politicians from both sides of the aisle love to make strange statements like "the middle class is shrinking" or "the middle class is under siege." These are dramatic statements seeing as the middle class is a mathematical definition. It is true that the distribution of income changes over time and tends to reward the top 1% of all earners, but the middle class remains intact. The country and the world have economic problems surrounding the distribution of wealth, but claiming defeat for the middle class is not the solution.
What Can the Middle Class Afford?
Despite the hyper-inflated expectations of the average consumer, most people in the middle class actually cannot afford McMansions, vacations and new cars. These items and experiences likely place people either in the upper class or deeply indebted.
The Middle Class Homeowner
According to traditional financial advice, most people should aim to purchase a home that costs no more than 2.5 times their annual income; taking out a loan for more than this could spell serious financial trouble. Given our definition of the middle class to be between $25,000 - $90,000 per year, the typical middle class consumer could afford a house that costs somewhere between $68,000 - $235,000. In most parts of the country, you can find a reasonable home within this price range, it just probably won't be located on Wisteria Lane.
Accept the Person that You Are
We spend so much time trying to inflate our lifestyles to match some societally projected ideal of success that we sometimes forget to focus on reality. Our materialistic and consumerist society would have us believe that being anything less than absurdly wealthy is somehow immoral. Many of us fall victim to this logic, stretching ourselves to the limits to purchase huge homes, leasing brand new cars, buying designer clothes and maxing out our credit cards. But in reality, none of this will make you any happier; if anything, it will probably put you deep into debt and make you feel very depressed. Why bother trying to live a lie?
There is nothing wrong with being middle class. There is also nothing wrong with being upper class, or lower class. We are all human regardless of how much money we have or don't have, and we all have the same basic needs. But we treat money as if it is the only thing that matters. Psychologically, we seem to expect that year over year we can make more and more money to keep consuming more things. How often do we stop and ask ourselves why? We should all really just slow down and try to be happy with whatever we happen to have today.