Income Class

There are many factors that you must consider when you are trying to figure out what income class you are in.  Although it can simply be done, you must know how to do it.

The things to consider are:

  • Your Income

  • Your Job Title

  • The number of dependents you have

  • Your geographical location

  • The neighborhood you live in

  • Your net-worth (your debts vs your assets)

  • How much savings you have

  • Your investment

  • Your overall lifestyle

Income

Your income is the basic to determining your income class, however you should consider figure in other factors as well.  These factors will either increase your income class or decease your income class.

Determining Dependents

Identifying what class someone is in according to income can be very tricky. But the best way to do it 
is to answer this question.  How many dependents do you have? For example you might make
$90,000 a year with no dependent. Then you probably would be considered a middle class person. But on the other hand if you were to make $90,000 a year with 3 or 4 dependents you might be considered lower middle class.

Geographical Location

Another question you should answer is what part of the country you live in.  Making $90,000 a year in   
some states might place you in a lower income bracket. For example the cost of living in New York is higher than the cost of living in Alabama. So if your income was $90,000 in Mississippi you would most definitely be considered middle class, whereas in New York with the cost of living being somewhat higher you would probably be considered in the lower middle class group.


The Kind of Neighborhood You Live In

Many people judge your income status according to what kind of neighborhood you live.  The sizes, cost and the area of the house you reside helps determine whether you are low income, middle, upper class or any other class.

You Net Worth

Although you might make a lot of money, if your net worth is low, you will be judged accordingly.  
Your net worth is what you have when you add up all of your debts and then add up all of  your assets.  The difference in the two will determine your net-worth.  If your debt outweigh your assets, then you will be considered a low income person no matter what's your income status.

Your Saving and Investments

Because your savings and your investment can be added to your annual income, they both can help determined your income class.

Your Overall Lifestyle

When thinking about what income class you are in you should consider your overall lifestyle.  You should consider your faith, income, employer, education level, job title, house size and location, the automobile you drive, your social networks, and your behavior toward your financial life.

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