7 Ways To Tell if You’re Middle Class or Upper Middle Class

“Money makes the world go ’round.” More than just a catchy song, that statement is a natural fact of life — and the reality is some have more than others.

The United States is comprised of several socioeconomic classes, from lower to upper class, each defined by how much money a household makes. Smack dab in the center is middle class.

But that’s such a vague term, how can you tell whether you fit in that category, and more so, if you’re regular or upper-middle class? Contrary to popular belief, it’s not as simple as making a specific dollar amount. Let’s take a look at the variables setting those two categories apart.

What Is Middle Class?

According to an April Gallup poll, more than half of Americans, 54%, identify as middle class. But what does that really mean? Broken down simply according to Pew Research, the category comprises anyone making between two-thirds to double the median income. That figure regularly changes from year to year. In 2024, However, the middle class is so vast it’s broken into two categories: middle and upper-middle.

Of the 54% referenced above, 39% said they were regular middle class while 15% belonged to upper-middle class.

What Separates Middle and Upper Middle Class?

To understand the difference, it’s imperative to examine the factors defining each category. Many people move between the two several times throughout their lives and careers and don’t even realize it. As life circumstances change, so does the financial power one holds, and that’s the very epitome of what it means to be middle class.

Stable Income

This is the first and most obvious distinction between the two categories. However, it’s only one indicator and middle-class income is not the be-all, end-all people seem to think it is.

Salaries are just one piece of the whole puzzle — and there are a lot of pieces. For example, those with fewer expenses will see their money go further and vice versa.

Level of Education

What does your education have to do with your socioeconomic class, you ask? A lot. Consider this: a position opens up and more than 100 people apply. Who are recruiters and/or hiring managers looking at first? Those with post-secondary education.

While a degree doesn’t get you as far today as it did, say 10 to 20 years ago, it is still very much a boost for your resume. Those with more education tend to have more opportunities to earn more money.

Living Paycheck to Paycheck

Living paycheck-to-paycheck is hard. It means you’re relying on the next check to come in right after you receive your current one, or worse, your check is spent before you even receive it.

Yet, that’s how many Americans live, with essentially no financial independence. If you have money in the bank, you more than likely qualify as upper middle class.

Ability To Survive an Emergency

Your car breaks down. The hot water heater goes. You have a medical emergency that insurance won’t cover entirely. These are all real-life situations that can test your financial worthiness.

Many people don’t have the means to cover these emergencies without tapping into credit cards, taking out a loan, or borrowing from family.

Access to Benefits

It used to be that full-time jobs came with an attractive benefits package, but over the years, the word attractive has become somewhat subjective. However, if you have access to good health insurance and retirement benefits, you’re already way ahead of the class in terms of financial health.

Not having to foot medical bills out of pocket is a huge bonus, as is having money put away for retirement, so you don’t struggle in your golden years or worse, have to work until much later in life.

Socially Rich

What does being socially rich mean? Having a network of people you can call on to provide you with more opportunities.

For example, knowing a prominent attorney can yield you top-tier legal advice you might not otherwise have access to. Knowing someone who works in the financial planning sector can be beneficial when you’re choosing investments.

Owning a House — Or Two

Real estate is a very prominent asset to have, especially since it nearly almost appreciates rather than depreciates in value. Just think back to the pandemic when the availability of houses declined while the demand increased. Housing prices skyrocketed.

While that’s hopefully a once-in-a-lifetime occurrence, it just goes to show how owning real estate can be an ace in your pocket. Plus, it builds equity over time. As you pay it off and the equity builds, so does your perceived wealth and standing.

How To Join and Stay in Upper Middle Class

If you find your circumstances place you in regular middle class, that’s okay! It’s not the worst place to be, all things considered. And the good news is you can boost your socioeconomic standing and join the upper tier.

It’s not easy though — or everyone would do it — so be prepared to put some effort (and money) into one or more of the following.

Stay Within Your Budget

For many, this is easier said than done, but for most, it’s doable. It can be hard to resist temptation when you’re out shopping or the latest gadget hits the market.

And that’s not to say you should never splurge, you absolutely should. Just don’t make it a regular habit.

Look for a Better Job

The best way to make more money, absent a promotion at your current company, is to look for a better job. Leverage your experience and your selling points. Be creative in your pursuits.

Don’t send prospective employees a run-of-the-mill cover letter. Stand out and let them know exactly why they need you and why they needed you yesterday.

Put Money Away

This advice is two-fold. Put money into your savings, yes, but also, put more money into your retirement accounts. Learn the limits to the amounts you can stock away each year, tax-free.

For 401(k) plans, the contribution limit is $23,000, though those 50 and over can contribute an additional $7,500 in catch-up contributions. That’s money you won’t have to pay taxes on until you withdraw it years down the road. You can also roll $7,000 into an IRA, or $8,000 if you’re 50 or older.

Middle class is very fluid. It’s not uncommon to fluctuate between regular and upper-middle class throughout your life as your circumstances, such as having and raising a family and gaining or potentially losing a job, change. The key to staying in the upper tier, however, is to be fiscally responsible from day one.