Your social class, along with the money you have in your savings account, can be an indicator of certain criteria for your socioeconomic status; however, it acts as more than a simple metric to calculate your net worth. It also carries a significant amount of weight in how income inequality or education levels are viewed and measured. The term middle class, when it comes to American households, is not static; it can change based on your location or even your net worth by age.
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So, as much as your economic security is about how much money you make and can put into savings and investments, it’s also about how you feel. Find out here how to determine whether you’re poor, middle class or rich.
So… What Does Your Family’s Net Worth Mean?
Americans identify themselves on the spectrum of class in many different ways. Though most would say they feel like they are part of the middle class, some choose to identify as working class. On either end of the wealth spectrum, you have few who identify as either high net worth or poor. Why is there so much discrepancy in how people classify themselves, let alone how society does?
It could be because not all class indicators directly correlate to your economic status. For instance, a graduate student’s stipend might net them $20,000 a year or so, which would put them in a lower class, but you have to consider their future income based on the time put into education. The tuition or student loans may be expensive, but the cost of education is balanced out with higher salaries upon graduation, where they can more easily build wealth.
Someone else raised in the upper class could go bankrupt for one reason or another, but even though they’re temporarily without income, they’re able to draw on the habits and support of their upper-class background. They’re able to ignore some of the issues more prevalent with the lower and middle classes, including the inability to pay rent or credit card debt.
Though American families living in lower-income households often are hit first and hardest in times of economic turmoil, things such as stock market crashes, recessions or tariffs impact how far everyone’s money will go.
You might be questioning where you fit in due to recent and ongoing economic trends, including higher inflation rates, layoffs, future recession worries and the continuing effects of economic volatility. If you’re not sure which class in the United States you fall within, here are the markers to look for according to Resource Generation.
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Are You Considered Poor?
Poorer or lower-income households are found to be approximately 20% of the population. They hold less than 1% of the total wealth in large part due to the following factors:
- Unstable housing
- Limited access to higher education
- Heavy debt
- Difficulty paying basic expenses
- Accustomed to the sharing of resources
- Disproportionate incarceration rates
- Treated as a burden/expendable
- Lack of access to healthcare
Are You Considered Working-Class?
Working-class heroes are becoming a demographic that is harder to define. This group currently makes up about 40% of the population and holds less than approximately 3% of the total wealth. Here are some key takeaways as to why:
- Manual labor: working for the middle/upper class
- Sometimes, they have access to higher education, with student loans being an issue
- Limited savings, living from paycheck to paycheck
- Debt is a daily concern
- Somewhat stable housing
- Also treated poorly
Are You Considered Middle-Class?
Middle-class Americans are another demographic group of households that seems to be dwindling or at least shrinking by current definition standards. They represent an estimated 20% of the population and 8% of the total wealth — here’s a breakdown:
- Stable housing/homeownership
- Stable employment
- Jobs tend to have ideal benefits
- Higher college education
- Debt is usually from a mortgage or an education
Are You Considered Upper-Class?
It may come as no surprise that people earning higher incomes hold a larger share of the reserve. The upper class is estimated to comprise approximately 19% of the population, yet it holds 49% of the total wealth. The following are just a few of the signs you might be in the upper class:
- Own more than one home
- For elite education, student loans are usually not an issue
- Stock market investment
- Early retirement
- Inheritances
- Easy access to legal aid
Are You Considered Rich?
As far as being rich is concerned, they are literally estimated to be 1% of the population, so the nickname “the 1%” holds true to this stigma, along with 40% of the total wealth. Here are a few key signs you may be one of them:
- Own the largest, nicest homes
- Full-time work is optional
- Elite schools and higher education
- Large inheritances
- Wide range of social connections
- Treated as leaders
- Access to the best legal aid
- Hold positions of notable power/esteem
Gina Hagler contributed to the reporting for this article.
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This article originally appeared on GOBankingRates.com: US Family Net Worth: How To Tell If You’re Poor, Middle Class or Rich
