The middle class today is almost impossible to categorize. Are they those who get married, have children, and buy a house? Are they those who don’t want to travel around the world? The truth is that with the rising cost of living, everything is becoming more complicated. Inflation, housing and education prices, healthcare difficulties, retirement age… Experts suggest that in five years, the middle class won’t be able to afford what was once affordable. New cars, private school tuition, owning a home…
Middle class: wealth, educational level, employment, and access to goods and services must be taken into account
Several factors influence the middle class, or any type of class, stratum, or rank within society. For example, factors such as wealth, educational level, employment, and access to goods and services must be taken into account. Finally, we could include consumption and savings expectations, which can have a significant influence.
The seven issues at stake for the middle class in the coming years will be: extended family trips, new cars, private school tuition, homeownership and real estate, healthcare costs, leisure and travel, retirement, and what is considered “safe” investments for retirees. These issues, which may seem mundane to many, may end up being “luxuries” in the future with the rising cost of living.
People try to maintain these types of vacations to maintain the lifestyle they’ve always lived
On the one hand, family trips. This is a long-standing tradition in many upper-middle-class families. When vacation time comes, it’s customary to take a family trip. If it’s summer, to sun-filled beaches; if it’s winter, to the snow and mountains. People try to maintain these types of vacations to maintain the lifestyle they’ve always lived, but there will come a point where the costs are so high that it’s something they’ll have to reconsider. “I would say the tradition of extended family trips, especially overseas, will probably increasingly be something the middle class can’t afford in the coming years,” said David Kemmerer, CEO of CoinLedger.
Buying a car, on the other hand, may seem very affordable for the middle class, but it’s something they’ll also be affected by in the near future. “Vehicle prices have increased dramatically in the past four years and will likely continue to become more expensive,” said Melanie Musson, finance expert with Clearsurance. “Safety features, autonomous technology, and EV batteries contribute to the rising prices.” This last fact is important: eco-friendly cars are increasingly being sold, and they’re more expensive and harder to charge depending on the area of the country you live in. Furthermore, with increasingly stringent restrictions in cities, owning a zero-emission car is becoming almost mandatory.
“A mortgage might be something the middle class won’t be able to afford in five years”
“Tuition rates have been steadily climbing for years (…) and it’s highly likely they’ll outpace a middle-class income in the near future,” according to Jake Hill, CEO of DebtHammer. And as every family knows, finding a place at a private school is becoming increasingly difficult, due to prices, the number of children, the requirements…
A very important topic is buying a home. Something that was much more feasible fifty years ago has become a real odyssey. “Honestly, with the way things are going, a mortgage or house purchase might be something the middle class won’t be able to afford in five years,” said Carter Seuthe, CEO of Credit Summit. The housing bubble is a reality.
“The affordability of necessary long-term care services could become a significant challenge”
And finally, we have the expenses, probably the most important: healthcare, retirement, and savings. Especially in a country like the United States, with such a complex and inaccessible healthcare system, this issue is worrisome. “Without proper planning, the affordability of necessary long-term care services could become a significant challenge, potentially depleting retirement savings prematurely,” said Mike Kojonen, financial advisor and owner of Principal Preservation Services.
With all of this, the most important thing is to live a life we can afford. Try not to follow trends, live as you can and remembering that there is just one life, so let’s live it.
