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• ilinamorato@lemmy.world ⁨21⁩ ⁨hours⁩ ago

  We’re very much NOT upper class.

  I kinda think that not being strapped for cash is being upper-class.

  Upper-class: Always having enough

  Middle-class: Always having almost enough

  Lower-class: Never having enough

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  • sugar_in_your_tea@sh.itjust.works ⁨20⁩ ⁨hours⁩ ago

    “Class” is determined by income, “enough” is determined by spending habits. You could make $50k and have positive cash flow, or you could make $400k and always be strapped for cash. The higher your income is, the more options you have, but also the more exposure you have to more ways to waste your money.

    This is a great video about this. Basically:

    • lower class ($34k median income, $3400 net worth) - ~25% of population - these are those who truly struggle with emergencies, and flirt w/ the federal poverty line; net worth is pretty much nothing (often negative!); main goal is get an emergency fund to break the cycle of poverty
    • middle class - three categories (lower, middle, upper)
      • lower ($44k median income, $71k net worth) - ~20% population - identify more with middle-middle class and tend to get into more debt than necessary by keeping up with the Joneses, and could be financially stable w/ some discipline
      • middle ($81k median income, $159k net worth) - ~20% - financially stable, most of assets are in home
      • upper ($117k median income, $307k net worth) - ~20% - passive income and compound interest supplement income; some live paycheck-to-paycheck due to lifestyle inflation, but some can do really well with investments
    • upper class - two categories (lower and upper)
      • lower ($189k median income, $747k net worth) - ~10% - specialized professions; most people can get into the lower upper class with discipline (10% savings rate on $65k salary => $787k investments by age 50); little pressure from everyday expenses
      • upper ($378k median income, $2.5M net worth) - ~5% - some college grads working as employees, but a lot of these are business owners

    At each level, I see two types of people:

    • lower class
      • savers - those who scrimp to be able to cover emergencies that would otherwise screw them over; these can move up to the middle class
      • "normies" - those who get screwed over and over and stay in the lower class
    • middle class
      • savers - less scrimping here, but need to budget and avoid “keeping up with the Joneses”; some discipline can establish a solid retirement
      • "normies" - debt payments prevent any kind of progression, and workers are terrified of job loss because the house of cards could come tumbling down
    • upper class
      • savers - become really wealthy (upper upper class)
      • “normies” - some upper class folks are “strapped for cash” because they can’t keep their spending in check, but most have enough income to recover from even the worst mistakes

    By this metric, not being strapped for cash is possible for pretty much anyone in the lower-middle class and above, and even those in the lower class could get there by stabilizing their finances so they can take some risks to increase their income (i.e. night school, quitting a bad job for a better job, getting CDL and financing a truck, etc). On the flipside, being strapped for cash is also quite possible at pretty much any income level, and I’ve heard plenty of stories about lawyers and doctors having trouble keeping up with debt payments because they got caught trying to keep up with those wealthier than them.

    So I don’t think “strapped for cash” is a good metric for economic class, income is, because you can make choices that can cause you to be paycheck-to-paycheck at almost any income level, as well as choices to maintain stability at almost any income level.

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    • ilinamorato@lemmy.world ⁨16⁩ ⁨hours⁩ ago

      not being strapped for cash is possible for pretty much anyone in the lower-middle class and above, and even those in the lower class could get there by stabilizing their finances so they can take some risks to increase their income (i.e. night school, quitting a bad job for a better job, getting CDL and financing a truck, etc).

      It’s easy to say “stabilize your finances!” but on a practical level it’s almost impossible to do when there’s no wiggle room. You can’t stabilize any finances if you’re taking out payday loans in order to pay rent every month. It’s not like there’s any money to be put into savings if you’re making $2,000 a month but putting $1,000 toward rent, since most people rather like to eat.

      I’m thankful to not be in that situation, personally, but it’s not something you can just wish your way out of. Even your examples require a certain level of financial breathing room that people don’t tend to have when every dollar is spoken for. You can’t finance a truck if your DTI is already high. You can’t take CDL training or night school if you have to work two jobs just to keep food on the table.

      I’ve heard plenty of stories about lawyers and doctors having trouble keeping up with debt payments because they got caught trying to keep up with those wealthier than them.

      But if you get into that scenario, you can just sell the supercar or downsize your house or whatever. That’s not really an option for people who are living paycheck-to-paycheck.

      So I don’t think “strapped for cash” is a good metric for economic class, income is,

      I think income divided by local cost-of-living could be, maybe.

      At the end of the day, irresponsibility with money is still a problem for sure. And keeping-up-with-the-joneses is probably a problem for some people. I’m not one of them, and none of the people I know are either, but I suppose some people have that issue. In my experience, though, most people who are struggling financially are not in those situations. They’re just trying to keep their heads above water.

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      • sugar_in_your_tea@sh.itjust.works ⁨14⁩ ⁨hours⁩ ago

        You can’t stabilize any finances if you’re taking out payday loans in order to pay rent every month

        Oh, I 100% agree. But in many cases, taking payday loans is a symptom of other serious problems in someone’s spending patterns and not necessarily an income problem. Maybe the car payment is too high, or perhaps they’re paying too much for food. Whatever it is, that needs to get fixed to end the need for emergency cash.

        If you’re in the lower middle class or higher, there’s no excuse for it IMO. If you’re in the lower class, you’ll need to get creative (government assistance, co-living, etc).

        you can just sell the supercar or downsize your house or whatever

        You say that, but in many cases, they still end up net worth negative. The problem here isn’t with income, but spending, and you’re not going to sell your way out of a spending problem.

        I think income divided by local cost-of-living could be, maybe.

        Certainly. Economic classes are very much location-dependent. If you live in NYC or SF, you’d need to adjust the numbers a bit, likewise if you live in rural Mississippi or something. And there are calculators available online to help with that.

        most people who are struggling financially are not in those situations

        Pretty much everyone will say that though, because people are pretty bad at noticing the excesses in their own spending. If you’re not standing out as being “weird” for spending so little, then you’re probably “keeping up with the Joneses,” because the average American is pretty irresponsible.

        This is a pretty broad brush stroke to be sure, and I’m sure there are plenty who are legitimately struggling despite a conscious effort to cut costs. I’m just saying that many, if not most, people who aren’t “financially stable” could make room in their budget to get financially stable, but instead end up throwing a ton of money down the drain due to interest.

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    • Cryophilia@lemmy.world ⁨19⁩ ⁨hours⁩ ago

      Add the 1% there. Generational wealth people. Private jets, multiple mansion homes, etc. They’re far above the upper class. Totally different plane of existence from everyone else.

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  • Rai@lemmy.dbzer0.com ⁨16⁩ ⁨hours⁩ ago

    sugar summed it up nicely.

    We make a decent amount, but we’re priced out of buying a home right now. We have a solid amount of savings and stocks, and our only debt is my partner’s student loans which aren’t a ton. We just don’t think about money day to day.

    If we want something, we just get it. But we don’t really want things, so we mainly just spend money on food and booze. And Steam games, but only if they’re 50% off or more.

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