I’m a sucker for statistics, probably why I enjoy looking at numbers like the average retirement savings  or the average tax refund , but I never gave the term “middle class” much thought until recently.
Fortunately for us, U.S. News & World Report has compiled some statistics  on what the “average” is for a lot of money related statistics, like income, hours worked, etc.
Let’s take a look…
For a two parent, four person household, the average income is between $51,000 to $123,000. The median is $81,000. That’s higher than I would’ve expected as the “typical” household has a sole breadwinner and one homemaker (it turns out 76% of two-parent families have both parents working). The case for this arrangement is pretty clear for anyone who has looked at the cost of daycare!
The range of this metric, $51k to $123k, really illustrates how meaningless it is without additional information. $123k in a low cost of living area is not the same as in a higher cost of living area. Unless it’s normalized for cost of living, it’s really difficult to find value in it.
That being said, would you consider someone earning $123,000 to be “middle class?” That’s $10,000 a month, pre-tax.
Other Average Statistics
Here are some other “middle class stats:”
- Average home is worth $231,000 with $17,600 in payments a year. That comes out to $1466.67 a month in housing costs.
- The average home is around 2,300 square feet.
- On cars, the typical family spends $12,400 a year on two cars.
- That median income family puts away around $2,600 per year for retirement.
- $14,200 a year on clothes, food, utilities, entertainment, and other living expenses.
- 18% of income goes towards some form of debt – auto loans, mortgage, credit cards, etc.
Finally, average net worth  is around $84,000 according to the Federal Reserve (in 2007 the figure was $120,300).
What do you think of the statistics? Did any surprise you? Would you consider income of $123,000 to be middle class?