Yes, you can be part of the lower class without being aware of it!
The economic landscape is changing constantly, and with the rise of inflation, you might be in for a surprise and not have the same spot in the hierarchy as you used to have.
Maybe you know that you are above the lower class or “working class,” but if you pay attention to some signs, you might recognize yourself in them. But how is this possible? A few years ago, you could swear you were middle class!
Well, as we already said, things are different than they used to be, and this affects every single one of us. When you are living in the United States, it’s easy to fall into the trap of the “American Dream” because we are taught that anyone can achieve it if they are working hard. However, the growing income inequality makes many families struggle to make ends meet, and this starts more and more to sound like a fantasy.
Worried you might be part of the lower class? Just look at the signs and see if they match your lifestyle.
High debt-to-income ratio
At this time, staying out of debt in America is a real challenge. The rising costs of living, stagnant wages, and an increasing reliance on credit are pressing on the population more than ever, and a decent way of living is harder to achieve.
It is not uncommon for people to have monthly payments that surpass their income. Loans, credit cards, and car payments—they all cost more, and they can make the lives of many terrible.
According to financial experts, a DTI ratio exceeding 40% of your gross monthly income might indicate that you are part of the lower class. Yes, it is thought to hear this, but such a high DTI ratio is a clear sign of financial instability.
Also, if you are in this situation, there is a chance that you have trouble with your credit score. Poor credit history, low income, and the need for more debt to cover existing obligations indicate that someone is part of the lower class.
You are not able to save money
Ok, maybe a few years ago you were able to maintain a savings account, but now you feel like saving is an almost impossible thing to consider. You have bills to pay, groceries to make, the money you spend on transportation, and let’s not forget the basic needs. This really makes you feel like you are lower class.
But these things have always existed, right? What changed that you are now not able to save anything? It’s sad to think that you can’t have an emergency fund or invest in your future, but this happens due to the rising prices and the salaries that remain unchanged. This is the reality.
When this lack of savings is present in your life, be sure it is a stark signal of being lower class. Without an emergency fund consisting of enough money to cover three to six months of living expenses, any individual is left highly vulnerable. Living paycheck to paycheck means that any unexpected expense, like a medical emergency or car breakdown, could lead to a financial disaster.
This creates a cycle of stress and anxiety, and if you are feeling all of these, you should know that this is a phenomenon that is common among lower-class people.
Access to education is limited
When you or your kids are not able to access quality education services, this is a strong indicator of being part of the lower class. Good education is the gateway to escaping the lower class due to the opportunities. The more educated you are, the more opportunities are in for you.
You need education to climb the socioeconomic ladder, and when education is lacking, those who are unfortunate have a higher chance of being part of the lower class.
The underfunded schools, lack of resources, or the inability to afford extracurricular activities make it a real challenge for the kids and the parents to access a brighter financial future. This perpetuates the cycle of poverty and creates a divide between the lower and higher classes. Also, this is how people remain stuck in the lower class for generations.
You are receiving government assistance
Thank God for the government assistance, as it helps many folks to live their lives decently. But if food stamps or subsidized housing are a normal part of your life, this is a sign you are part of the lower class.
When your financial needs exceed your ability to meet basic living expenses independently and you need government assistance, it is clear that something is now working well financially. The money you have is not sufficient to cover food, housing, or healthcare without additional support.
Now, there is no shame in receiving assistance from the government, but the very fact that you’re eligible for assistance means you are part of the lower class. Assistance is a lifeline that many need and is a good way to support yourself if you are trying to escape this cycle.
Living paycheck to paycheck
Even if this is the last entry on our list, it is also the most striking sign someone is lower class. This pattern shows that a significant financial imbalance is present in your life. You are able to pay your expenses most of the time, but you can’t save anything, and let’s not even talk about unexpected expenses.
Living paycheck to paycheck often goes unnoticed most of the time, but when a crisis takes place, this is when you realize that you are unable to take care of the whole situation properly.
What happens is that you are just spending what you earn, with no progress toward long-term stability. This simply means that your income is not enough to meet even the basic costs of living, and from an objective point of view, this is what being lower class is all about.
Unfortunately, the only way to escape the lower class is to increase your income. This can be done by changing your job or trying some side gigs. Also, be very careful when you are negotiating your salary.
Another important aspect is to always pay your debt in case you have any. Leaving the debt unpaid only means more financial burden, and this will bring you down even more.
If you need more info about how the status system works in our country, then this book might be a good read for you. It’s simple and provides you with all the info you need: Class: A Guide Through the American Status System
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