[Music] well hey you guys so I recently came across an article from Yahoo finance that shared the signs that you may have upgraded out of middle class so it got me thinking about how often I see people especially on the Ramsey show or on social media who aren't just staying in their Lane so to speak and the truth is it goes you know both ways right some people have harder times some people are thriving so I see people who are making a lower income and managing their money so well that they're actually Building Wealth and they're becoming better off financially than those who may be making you know a larger income but they're completely out of control and they're in debt and they're living paycheck to paycheck so today I want to dig into this topic and react to this article's definition of middle class and later I'll share my tips for acting like you're in the upper class even if you make below an average income and trust me it is possible but first make sure to click that subscribe button if you want to see more content like this in the future all right first what is considered middle class these days well Pew Research Center defines middle class as having an income that is 2third to double the national median income and according to the Bureau of Labor Statistics the median annual income is just over $59,000 judging by this formula and salary level if you earn less than $39,000 ,55 you're considered a lower income household and if you earn more than $118,000 $456 you are in the upper class but what I mentioned earlier is that it's not always that black and white so let's look at their list of five signs that you're no longer in the middle class and I'll share my reactions as we go so the first according to this article is that your income has doubled in the last few years so again this could be anything you guys from making a career pivot maybe growing a side hustle maybe you moved up in your current workplace maybe you got married and now with you and your spouse having an income that has caused you to double so again according to them that is one of the reasons and so whatever this looks like for you they say that this is the number one sign that you might be in the upper class I guess I would agree with that in a sense I mean if you've doubled your income you're doing pretty good but again I think for some people they may have done that but still feel this tension of living paycheck to paycheck cuz again I think just with my job I'm like I mean I talk to people making $200,000 a year and they're still really struggling and I would say you know in today's world with inflation and I think about child care prices like all of this stuff you guys it is higher I mean like things are more expensive so even if you double your income and you don't reassess hey what is our life going to look like where can we still find ways to maybe cut some things down and all of it you may still feel like you're living paycheck to paycheck but this idea of doubling your income I mean I think it's great I think raising your income is always a good thing for your money goals uh but being able to sustain your life at that point without going into debt I think is really important all right the number two on this list is that your only debt is your mortgage so their argument is that members of the middle class often have to take on debts to afford basic necessities and I mean I would disagree with this I would say you could be class and still live without debt because again I talk to people you guys that either make a crazy income and they're still paycheck to paycheck or I talk people that are making you know $770,000 a year and they're doing incredible they're like getting their yourself out of debt you know they're um living within their means and all of it I mean I understand the point for sure right I mean if you are middle class it can feel like okay you know we can't afford a car or even down to basic groceries and all of that but I think the reality is that we' seen that regardless of your income what you're doing with your income is what's really important and we've seen credit card debt you know hit in the trillions this past year it's the highest it's ever been and so what is interesting is is as things have gotten more expensive people have either chosen to continue to rely on debt which in my opinion keeps you in the cycle of payments which keeps your income working for the bank and not for you or we've seen people you know say okay I'm going to stop this and I'm going to get out of debt I'm not going to use credit cards I'm not not going to use a car Alan like I'm really going to live this lifestyle where I live below my means and in my opinion they have created a lot of peace and margin in their life I mean both both are hard so I think it's one of those things like pick your hard right but I'd pick the hard that puts you more in control all right number three is that you're able to save for retirement so if your employer offers a 401k match program be sure to contribute at least up to the match that they offer as soon as you can that's what the article was saying and in my opinion you know when it comes to investing in general I want to make sure that you're at a debt and you have three to six months of expenses and then don't just invest up to the match invest 15% of your income so yeah they could be up to the match but that's also funding you know rth Ira it's even going back to your 401k maybe and putting some more money in um but being able to invest a lot is really important and so is that considered an upper class you know thing I mean again I don't think it's that black and white because I've just you know seen data points of people that are making you know middle class incomes and they've you know done a different way with their money of living they they've gotten themselves out of debt and gotten to a place to invest so I would say that yeah I think it can be more challenging obviously when your income is less you know than a certain point to say okay we have to afford all these Basics and then again we're going to put some money towards investing but I think it can be done I think being on a budget and knowing where your income's going freeing up payments that were going to car loans or the bank for credit cards that are that's back in your wallet back in your paycheck is key I mean that changes everything so again it takes more intentionality to do it but it is possible all right before I share the rest of this list and my tips for managing money like the upper class I want to tell you about one of our sponsors Christian Healthcare Ministries so when you go against what Society thinks is quote nor all like avoiding debt for example it might seem weird at first and that is totally okay because we want you to be weird if that means that you're doing things intentionally including how you spend your Healthcare dollars and one way to be intentional is with Christian Healthcare Ministries chm isn't health insurance they're a health cost sharing ministry that's helped hundreds of thousands of families like yours take care of healthc care costs without sacrificing their freedom and programs start as low as $98 a month so find out more and join at chministries.org budget that's chministries.org budget all right number four on the list is that you're not in the middle class anymore is if you have passive income so passive income can look different you know for everyone but if you're at the point where you're earning money without a significant amount of extra work then obviously that is more upper class Behavior right so maybe you've invested in real estate and you have rental properties and you're you know getting some extra money a month or maybe you know you've developed an Investment Portfolio and it pays you dividends like whatever it is there is a level that's like oh wow yeah you've had you know extra income to do something with that is creating now more income so yes I would say that tends to lean more in the upper class uh but the beautiful thing is I'm here to debunk like all this whole list I'm like I've seen people in the middle class you know that are doing things like investing and again they may not be reaping the benefits of those Investments right now especially if in their retirement and they're not be able to get to those Investments so they're 59 a half but again they're putting a strategy towards the future and I think that's what's really important but I would also encourage you to focus on the basics first I think sometimes we can jump to this idea of like oh I just want passive income and all this but make sure you're at a place that you're building on a really solid foundation first and foremost which again is having an emergency fund in place being out of debt and all of those types of things but when you free up your income and have margin and you are able to do more and that's why we love investing it's for your money to make money right um so I think that really is important all right number five you're actively taking steps to reduce your tax burden this is what the article said so their argument is that most people don't obsess about their taxes until tax season rolls around meaning that they've never taken a big enough hit maybe with taxes to find ways to save but if your income has reached a certain point then you are more concerned about hey how can I keep some of my money and not send it all to taxes so you're thinking you know more like okay do I you know have some exemptions here or am I doing this and kind of a strategy around that I mean I guess that's more of an upper class priority um again I think depending on your situation what's going on but when it comes to taxes and we say this on the show all the time you guys that there are Industries when it comes to this money conversation that's a lot whether it's Insurance taxes investing so always getting Pros in your corner I think is really important um so I think you can take advantage and and you know do well for you when it comes to taxes whether you're lower middle or upper class right um and there's ways to do that that I think is important to benefit you and your family so you know this list you know some of them I agree with some of them I don't different parts of it but I think it is a really great conversation uh when it comes to this idea of doing well financially and I think that's what people really want but I also think there's like this perception of what doing well really is and the reality of it and the Beautiful Thing is that your habits you guys are going to make the biggest difference they really are I said it in this video already but I'm going to say it again because there's people that make six figures and they're still living paycheck to paycheck because they still have two car loans and two student loans and credit card debt and all of this and they're still like living you know beyond their means in that sense and then you talk to people who are making less than that and they actually have more of a net worth than the person that's making more money year to year here and so using debt as a tool remember it does not define who you are your mistakes do not define you but using your income and the resources that you have to say hey how can I become a healthier person and out of the Overflow of who I am in my character my money is going to reflect that and I think levels of contentment and generosity all of that plays into this and so there's just something beautiful about saying hey I'm not going to let other people dictate where my money goes I'm going to decide and the thing is is that you can so if if you want to achieve this idea of feeling like hey I want to win with my money whether I have a middle class salary or an upper class salary there are three things that you can do to get you there where you actually can start feeling like and acting like and checking off this list that was in the article of being more upper class is what it feels like and number one that is getting rid of debt freeing up your income you guys and putting money back for you and your family versus funding the bank and the car companies out there is huge so get out of debt number two have an emergency fund having that margin and that padding between you and life is going to keep you from taking this like Crisis that comes up whether it's a car maintenance issue or your you know hot water heater brakes like whatever the thing is it takes you know it can create that problem and then sometimes can create a money problem if you don't have the money to help yourself in that situation so the emergency fund is huge and then lastly investing in retirement and investing for the future this is is actually going to do so much for you not just you today but you in the next you know 10 20 years which is which is huge all right you guys I want you to start really working towards those three goals in that order and you're going to feel some margin which is what the upper class is supposed to feel even though not all of them do but again it's giving you that control back and that peace which is what we're all wanting and if you need to get help in this process I really recommend checking out every dollar this is the best budgeting app ever and it's help helps you get in control of your money so click the link below to try it out and share this episode with a friend who might be curious on how they're measuring up when it comes to the lower middle and upper class and speaking of middle class you'll definitely want to check out my episode on 15 things the middle class can't afford anymore it's really eye openening so click over here to check that out or if you're listening on podcasts click the link in the description all right you guys remember to take control of your money and create a life you love
