When you think of the middle class, you might picture suburban houses, two-car garages, and a comfortable lifestyle. However, the definition of “middle class” is more complex than it seems, and it often depends on various factors including income, education, and even culture.

What Defines Middle Class?

Pew Research Center puts numbers to the term, defining the middle class as those with an annual household income between two-thirds to double the national median income. With last year’s national median household income at $74,580, this range is $49,720 to $149,160. And, thanks to Pew, there’s a handy calculator to help determine if you fit into the middle class based on your income, state, metropolitan area, and household size, while also considering the cost of living in your area.

However, not everyone agrees with this monetary definition. The Brookings Institute proposes three distinct ways to look at the middle class:

• Cash: This perspective considers income and wealth as the defining factors of the middle class. It’s a favorite among economists.
• Credentials: This angle focuses on education, qualifications, and occupational status as the determinants of middle-class status, which is often preferred by sociologists.
• Culture: This approach sees the middle class as defined by a person’s attitudes, mindset, or self-definition. It’s a popular definition among philosophers and anthropologists.

Why the Middle Class Matters

Regardless of the definition you choose, most agree that the middle class is crucial to the U.S. economy. A thriving middle class contributes to human capital development, a well-educated population, stable demand for goods and services, and supports the growth of entrepreneurs. Moreover, it bolsters political and economic institutions.

The Financial Struggles of the Middle Class

Yet, it’s important to note that being middle class doesn’t mean one is free from financial struggles. About 64% of Americans, including those in the middle class, live paycheck to paycheck. If you find yourself in this situation, there are ways to improve your financial health:

• Develop a new skill: Workers who develop new skills earn, on average, $8,000 more per year than those who don’t.
• Start a side hustle: Use your experiences and talents for side projects or gigs. Some side hustles have been made even easier with artificial intelligence.
• Create passive income: Consider investing or renting out a room in your home to generate income while you sleep.

Additionally, using budgeting apps can be a helpful tool in managing your finances, setting goals, and tracking your monthly spending.

Wrapping It Up: Solidifying the Middle Class

While the definition of middle class may vary, one thing is clear – a strong and thriving middle class is essential for the U.S. economy.

If you consider yourself middle class but are struggling financially, take steps to improve your financial situation, and remember, help is always available through various tools and resources.