Does your income make you upper, middle or lower class?

Incomes in the United States vary widely, and some people earn many times more than others. If you’ve ever wondered how your personal finances stack up and what “class” your income officially puts you in, here’s what you need to know.

What income do you need to be in the upper, middle, or lower class?

According to 2022 data from the US Census Bureau, here’s what you need to do to claim your spot in each class:

• Lower class: It is defined as the lowest 20% of incomes. Those in the lower class have an income of at least $30,000.
• Lower middle class: Defined as individuals in the 20th to 40th percentile of household income. Earnings in this group range from $30,001 to $58,020
• Middle class: The middle class is officially defined as those whose earnings occupy the 40-60th percentile of household income. Income range from $58,021 to $94,000
• Upper middle class: Anyone with an income in the 60-80th percentile would be considered upper middle class. Those in the upper middle class have incomes between $94,000 and $153,000.
• Higher class: Finally, the upper class is the top 20% of earners, and their incomes are $153,001 or higher.

Take a look at these numbers and see where you fall based on your own earnings. And remember, this is a snapshot in time – your income can change over the course of your life, just like your class.

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Will your success be determined by your income and class?

The amount of money you make matters when it comes to how successful you can be at building wealth. However, at the end of the day, it’s not how much you earn, but what you are do with your money.

You can earn a seven-figure income and still be broke if you spend it on assets that depreciate as soon as you buy them. Or you can earn $20,000 and retire a millionaire if you spend carefully and invest wisely. Here are some simple steps you can take:

• Make a budget. Living on a budget makes it easier to spend less than you earn.
• Create an emergency fund. Put about three to six months worth of living expenses in a great no-fee, high-yield savings account. The Discover® Online Savings Account is one of our top picks because it pays significantly more than the national average rate, has no minimum balance requirements, and has no fees. You can make a generous profit while avoiding debt if you are prepared for unexpected expenses click here to open a Discover® Online Savings account today.
• Automate your investments. Set up automatic contributions to a retirement plan, such as a 401(k) or IRA, with an online brokerage firm. Robinhood is a great choice because you can set up an IRA in minutes, pay no commissions and fees, and trade from your phone. By automating your contributions, you ensure that you invest the amount you need to succeed.

These three simple steps can help you become rich regardless of your income.

Here’s how you can improve your position

In addition to making smart money moves, you can also want to take advantage of the opportunity to increase earnings when you can. Here are some tips to help:

• Learn new professional skills. Depending on your industry, you can earn a certificate, participate in an on-the-job management training program, or take some classes to develop skills that can help you advance in your career (such as computer training courses or public speaking courses).
• Take on a side hustle. The average side hustle brings in $483 a month, which is a good amount of extra money that can make a big difference in your income.
• Work overtime. If your company allows you to work overtime, take advantage of it, as many people are paid hour and a half for overtime.
• Negotiate a salary. According to Pew Research, when workers negotiated a higher salary, 28 percent said they got the extra money they asked for, and 38 percent said they were given more than originally offered but less than they asked for. Whether you’re considering a new job or staying at your current job but feel like you’re being underpaid, it doesn’t hurt to apply for more money, especially if you can find salary data to support the fact that others in your industry pays more.

And even if your earnings never make it into the top 20% of earners, you can still live a rich life and have the financial security you deserve, especially if you make it a priority to save as much as possible and for as long as possible. .