I used to assume I’d ascend from my average middle-class lifestyle in a new Florida subdivision to a gated community with expensive Mediterranean-style homes. However, we bought our house during the housing bubble. Our climb to the upper middle class turned into a downward descent into the lower middle class without us even moving. According to a recent article by The Street, some people are getting used to financial hardship. A growing number of people don’t even identify with the middle class anymore. They have grown accustomed to financial pain. I am preventing financial hardship in the future by resisting the urge to keep up the image of a better lifestyle. Even though I’m satisfied with my current situation, I am aware that it’s easy to slide into a lower economic demographic. Looking at Zillow.com, it’s clear a high number of homes in my area are in pre-foreclosure or foreclosure even though the housing crisis is supposedly over.
Re-defining the middle class
According to a Pew Research Center study cited by The Street, only 44 percent of Americans now view themselves as middle class. In 2008, more than half of people called themselves middle class. I own my home in what seems to me like a lower middle-class community. I think I associate a middle-class subdivision with owner-occupied homes versus a lower middle-class community of rentals. Because of the housing crisis, about half of the homes in my community appear to be rentals. Ironically, the so-called lower middle-class renters pay more money than the homeowners who refinanced. I couldn’t afford the going rent for my home model, which is $1,500 a month versus my $900 mortgage.
Getting used to financial pain
A recent American Institute of CPAs study cited by The Street shows 74 percent of those surveyed feel worse off financially than they did a year ago. Even though our household income has not declined in the past year, I feel worse off as well. A much greater percentage of my income is now going toward health insurance premiums. Other expenses include college tuition, which just continues to rise every year. Also, food prices are up. The only bright spots are the lower interest rates on our mortgage and car loan.
Taking little steps to prevent bankruptcy
Some middle-class people say they are on the verge of bankruptcy. I have been diligent about paying off our credit cards and medical bills so we don’t end up in a similar position. I have friends who use their credit cards without any concern because they have good-paying jobs. I live as though my paycheck might be the last one coming in for a long time. The Street recommends keeping a budget, paying attention to medical costs, saving for retirement and paying down student loan debt and other high-interest rate loans.
I think the easier way to stay in the middle class is to stop trying to “keep up with the Joneses” or buy status symbols of success. I rather own my success outright with a paid-off home and car as well as stocks that can one day blow me out of the middle class even though my street address hasn’t changed.
More from this contributor:
My Family’s Clashing money Habits
I’m Still A Credit Deadbeat
We Stopped Paying the Grandparents Debt