10 Signs You’ve Fallen Below Middle Class (And What You Can Do About It)

Are you falling out of the middle class? The median income of middle-class households was $106,100 in 2022, according to Pew Research Center.

Slightly more than half (51%) of Americans lived in middle-class households the following year. That compares to 61% in 1971.

While many Americans are looking for clever ways to build wealth , you might find it difficult just to scrape by. If any of the following things describe you, you've probably fallen below middle class.

1. You constantly dip into an emergency fund

Sometimes, determining if you are in the middle class is a matter of perception. If you are constantly digging into your emergency fund, it’s probably a sign you have fallen out of the middle class.

One simple solution to this problem could be to recalculate your budget so you spend less. That can keep you from raiding your emergency fund and help you prepare yourself financially for tough times.

In fact, you might save enough to actually add money to your emergency fund.

2. Your debts keep growing

Debts can be a source of frustration. If your debts keep growing, it may be another sign you have fallen below middle class.

To turn things around, start paying down your debts. Put money aside from each paycheck to go toward paying off what you owe.

This may mean you will need to cut spending in other areas, but it could save you from paying interest on your debts.

3. You struggle to pay health care bills

Are you struggling to pay health care bills? If so, you are not alone. The rising costs of medical care mean more Americans are having difficulty paying their medical bills.

Contributing to a tax-advantaged health savings account or flexible spending account are two ways to trim these costs.

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4. You never have enough money to save

It’s difficult to save money when you live paycheck to paycheck. This is another sign you have slipped below middle-class status.

Take a closer look at your weekly expenses and see if you can find some areas where you can cut back. Then, move your savings into a savings account that can help you grow your money.

5. You have to work more than one job

Traditionally, middle-class life has been closely associated with only having to work one secure job that pays well and meets your needs. That’s not the case today for many Americans.

It might not be fun, but sometimes, the best way back into the middle class is to work more than one job. If you are able to save enough money from your second job, you might eventually be able to drop the position and go back to working just one job.

6. You can't afford a home and can barely pay rent

Housing is a big expense, especially when your finances aren’t in the best condition. Whether it’s a home or apartment, rising costs are putting the squeeze on more individuals and families.

Perhaps you can move to a different, more affordable house. If not, look into refinancing.

7. You have no money for vacations

Everyone needs time to relax and recharge. If you find yourself with no money for vacations, it may leave you wondering if you have fallen out of the middle class.

For now, perhaps staycations at home are your best option. Start a vacation fund on the side so eventually, you can visit more exotic locales. Or, try booking a trip during off-season times, when vacation costs are lower.

8. You have no retirement savings

The closer you get to retirement age, the more anxiety you may feel about being able to live comfortably during your golden years. If you have no retirement savings, it can be especially scary.

So, make saving for retirement a priority. Consider picking up more work, so you have additional money to put aside for retirement.

9. You can't afford to buy or keep a car

If you own a car, you know that a lot of costs come with vehicle ownership. You have to pay for gas, insurance, repairs, and other expenses.

If you struggle to afford these costs, it’s another sign you are sliding out of the middle class. Consider cheaper options, such as buying a used vehicle.

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10. You can't keep a job

Economic uncertainty in recent years has meant more job insecurity for some Americans. If you're in this group, perhaps you could look into getting a second, part-time job.

Having a part-time job or side hustle that helps you earn extra income could give you greater peace of mind. At least you will know that you have something to fall back on if your main job disappears.

Bottom line

If you're slipping out of the middle class, don’t panic. There are many ways to lower your financial stress .

Now might be a time to re-evaluate your spending. Talk to a frugal friend and ask for any advice about how to lower expenses.

If you put your mind to it and change your priorities, you should be able to cut costs enough to increase the money you save and put yourself on a path back into the middle class.

Money tips that can work for everyone

No matter what your bank account balance is, there's always an opportunity to optimize and improve your finances. Here's a quick checklist of things you can look at today.

Focus on paying off your debt . Debt can hold you back from making progress with your overall financial well-being. Aside from cutting expenses, there are tools that can help you pay off debt faster like balance transfer credit cards and debt counseling.

Earning extra income can give you breathing room. If finances are tight, earning some extra money to supplement your income can make a huge difference. A new job is one option to consider, but if you're not ready to make a big change or already retired, a part-time side job could be a better choice.

Cut your expenses. It sounds painful and so not fun, but it doesn't have to be. Take a look at your biggest expenses because that's where you'll probably find the biggest savings. For example, auto insurance rates have been soaring so shopping around for a new insurance company can be the fastest way to cut your bill. Also, look for ways to cut your grocery bill (despite rising inflation).