In my previous post, I outlined what I believe the lower class socioeconomic status looks like in terms of every day living. I wanted to provide a simple analysis without any statistics, data, or complicated definitions. In this post, I will again try to broadly define what I believe middle class looks like. If you’re like the majority of people here in North America it’s likely that you experienced growing up and spending most of your life in middle class. While I would argue that socioeconomic classes are subjective and have many factors that contribute to them, there are a few key factors that I believe strongly identify as middle class.
A few of these indicators that I will unpack for you include: investments, travel and leisure, real estate, vehicles, food, and education. This list is by no means exhaustive but will certainly highlight the differences between the different classes.
Investments: Middle class families will be able to maximize their retirement savings on an annual basis at some point early on once established in their business or career. They will maximize their tax deferred accounts and tax-free savings accounts but may have little to no additional disposable income left for leisure. For most middle class, investing & leisure/travelling is somewhat of a dichotomy in that these families are able to save for the future, and not live for today, but not both. Middle Class families may apply the Dave Ramsey approach and be debt adverse, or alternatively they may understand the power of leverage and apply debt as an investment vehicle taking advantage of low costs of borrowing. Alternatively if there happens to be unforeseen expenses that pop up throughout the year they may need to defer their investment savings for that year in order to cover their unforeseen expenses. Middle class families are certainly conscientious of savings and investments but life circumstances can impede on these saving and investment goals.
Travel and Leisure: Middle class are typically able to travel at least once every year. This may be a minor trip or a quick getaway, or could be a week or two week vacation getaway to a resort in an exotic destination. In most cases, these trips are planned well in advance and budgeted for accordingly. They are able to enjoy themselves without worrying about how much they’re spending and able to “splurge” within reason. Its also common for middle class kids to play competitive team sports that play tournaments and away games, parents who maintain memberships at golf clubs or other associations, and enjoy an occasional get away on a weekend here or there.
Real Estate: Most middle class families will live in a nice home in a relatively safe neighborhood where they can raise a family. For the purpose of this explanation, let’s not get bogged down by the type of house, etc. Instead, I’d like to point out that most middle class families will only ever have their primary residence with a focus on paying down the mortgage and building equity. These families in some cases may have a secondary property such as a cabin or cottage at the lake that is generational and has been handed down to them. Otherwise, there will be some families that have purchased investment properties in an effort to build wealth outside of their principal residence however this is the exception and not the norm.
Vehicles: Middle class families will typically have one vehicle for each parent, and each child that is old enough to drive and is licensed will typically have their own vehicle as well. There may be a recreational vehicle in the family such as a motorcycle, convertible, RV/motorhome, or boat, etc.
Food: Middle class families will typically never run into issues providing food (or other necessities) for their family. Children who grow up in middle class household’s always having food available, and therefore won’t associate success or wealth with always having food. Additionally, food will be a part of celebrating, but it will never be the central focus to the celebration itself where typically you will see this in a lower socioeconomic classes. For example: lower class families: “When I get that raise, we’ll go to the new restaurant in town”. Compared to middle class families: “I don’t feel like cooking tonight, let’s grab the kids and go check out that new restaurant”.
Education: Most middle-class families will have either one or both parents with post secondary education and are likely career focused or business minded. These families value education as a means to promote oneself, gain valuable skills, and find ones place in the professional world. These children can attend local colleges/universities or may attend schools that are budget wise in close states/provinces close by.
Please feel free to leave a comment or contact me with your thoughts!
-RAFI
