Did you know there is a particular minimum salary needed to be earned to be in the upper-middle class?
Many people are in the middle class; however, not everyone in this particular group has the same financial level. Some people in this same financial class earn more than others. These people are in the upper-middle class, and it can be quite confusing to determine if you belong to this class.
So, how much money do you need to earn to be considered upper-middle class in 2025? GOBankingRates looked at the numbers and explained how much income you need to make. It also explained what you need to do to reach that level this year. Keep reading to find out.
Minimum Salary You Need To Be in the Upper-Middle Class
To be in the top 20% of the middle class, you need to earn a certain amount. According to a study by GOBankingRates, depending on where you live, you need to earn between $106,092 and $149,160 per year.
Sarah Maitre, a chartered financial analyst (CFA), financial planner, and founder at Camriel Advisors, gave an example. She said someone earning $104,000 or less qualifies for the Affordable Housing Program in San Francisco. This means they are considered lower-income in that area. However, if that same person lived in a small town a few hours away from San Francisco, the class would be different. They would be in the upper middle class because the cost of living in the small town is much lower.
Sarah Maitre does not define upper middle-class net worth by salary alone. She says lifestyle is a factor, too. According to her, upper-middle-class families can afford the following without stressing about saving for college, retirement, or other financial goals:
- A home that comfortably fits their family
- Cars that are less than five years old
- Childcare for all their kids (or the option for one parent to stay home)
- At least one family vacation per year
On the other hand, middle-class families can afford most of these things but will have more financial stress. They may skip a vacation for a few years and have to be more careful with their spending. For example, a middle-class family might choose a more affordable brand like a Tesla instead of buying an expensive car like Kia.
If you are in the middle class and want to move to the upper-middle class, you can. The key to doing this is to look at your income and expenses. Then, find ways to either earn more money or spend less.
ALSO READ: How Much House Can I Afford With a 100k Salary?
Tips on How To Go From Middle Class to Upper-Middle Class
The following are helpful tips on how to go from middle-class to upper-middle class:
1. Increase Your Income
Although making more money can be challenging, it can also help you move up in life. According to Sarah Maitre, there are many ways to make more money. You can ask for a raise at work, find a better-paying job, or work a second job. You can also start a small business on the side. For example, you could sell handmade items on Etsy or work as a delivery driver for companies like DoorDash.
However, earning extra money usually means spending more time working. Maitre explains that although it is possible to increase your income, it often requires working longer hours. This means it might not be an option for everyone.
2. Find Ways To Reduce Your Expenditure
One sure way to help you move to the upper-middle class is to pay attention to your spending habits. Sarah Maitre says you should look at areas where you can cut down on what you usually spend.
3. Don’t Rush To Buy a House
Moving into a higher income level takes time, so there is no need for you to rush. Don’t be in a hurry to buy or save for a house if you are not financially ready. Brian Blakeman, a financial adviser, gave advice concerning this. He said renting for a while can help you avoid too much spending on your home. Instead, you should focus on saving money and investing in things like retirement accounts.
ALSO READ: How Much Does a Mortgage on a $500,000 House Cost?
4. Be Smart About Credit Cards
Using credit cards is not a bad thing, but it can become a problem if you do not pay the full balance each month. Blakeman advises keeping track of your income and expenses for at least six weeks. This will help ensure you are not spending more than you are earning. If you find yourself using savings to pay off credit cards, it is a sign that you need to cut back on spending.
5. Use Extra Money Wisely
If you get extra money, maybe a raise, a gift, a bonus, or a discount on something, don’t just spend it anyhow. Spending it right away won’t help you in the long run. Blakeman suggests making a plan for any extra cash. Doing this can help build your financial future. While it might not be as exciting at the moment, making wise choices with your money now will pay off later.
Improving your financial situation does not happen overnight. It takes time, smart choices, and good spending habits. Following the tips above can help you earn the minimum salary needed to be in the upper-middle class.