And middle class status falls somewhere in between. Of course, it will vary greatly depending on where you live and your living expenses. Besides your annual household income, are there any other indicators Digital Marketing Agency In Canada that point to the fact that someone might be in the lower class without even realizing it?
Limited Access to Education
Your kids are struggling in school, but you don’t have the extra money to pay for a tutor. You can’t afford to take night classes at your local community college. These are two examples of how you might be in the lower class and not realize it until now.
“Education is often considered a key factor in social mobility and upward economic mobility,” says Dana Ronald, CEO of the Tax Crisis Institute.
“However, if you come from a low-income family, you may have different access to quality education than those in the upper-income bracket. This can make it difficult to move out of the lower class.”
High Debt-to-Income Ratio
It’s hard to stay out of debt in the United States in any year, but especially in 2024. Between outstanding loan payments, credit card balances, and car payments, you can find yourself owing more than you actually earn on a regular basis.
“A high debt-to-income ratio, where your monthly debt payments exceed 40% of your gross monthly income, can indicate a lower-class status due to financial stress,” explains Jeff Rose, a certified financial planner (CFP) and founder of GoodFinancialCents.com.
“Difficulty getting approved for credit cards or loans, often due to low income or poor credit history, is another common issue faced by those on the lower end.”
Living Paycheck to Paycheck
“It’s possible that you’re in a situation where you’re living paycheck to paycheck without even realizing it,” says David Bakke, a financial expert at DollarSanity.
It’s a chain reaction of spending and income. Essentially, you get paid a paycheck and your bank account is filled with money. The only problem is that you spend all that money without saving or investing it, and then you’re struggling, right when your next paycheck comes in and the cycle starts all over again.