I recently read an article entitled $250,000 a Year is Not Middle Class. The author argues that because families who make $250,000 per year earn more than most Americans, an income of $250,000 is not middle class. The implication is that these “elite” earners need to be taxed more than they are currently being taxed.

The author completely ignores three important factors:

• Location
• Family Size
• Student Loan Debt

Is $250,000 a good chunk of change? Yeah, it sure is. I wish my hubby and I had a combined income of $250,000. Heck, even half of that income would be awesome. We would be able to pay off our student loans way faster if our incomes were that high.

But do I consider $250,000/year to be wealthy?

Not necessarily.

Imagine this:

A young couple, Susan and Alan, earn a combined income of $30,000/year. They both work for minimum wage and they never went to college. Neither of them have student loans or any other form of debt. They don’t have kids. They live in a small town in Iowa and rent a one bedroom apartment for $400/month.

If this couple saw my husband’s and my combined high five-figure income, they might assume that we’re well off financially. They might think “Wow, if only we could live like them! They must be living great!”

Would they be right?

No.

My husband and I earn “good” incomes but we do not make enough money to live on – when you factor in our enormous student loan payments. Our debt load is extraordinarily high, and we also live in an expensive urban area where even studio apartments cost over $1,000/month (including utilities).

So, I may look at a couple who earns $250,000/year and think that they have it made. Would I be right? Maybe. Maybe not.

What if they live in an expensive area of the US? What if they have five young children who are all in daycare? What if they are both lawyers who are buried in law school debt? What if they owe $400,000 in student loans?

[callout title=” text=’Many high earners have advanced degrees – which means there is a good chance that they also have massive student loan debt.’ button_text=” button_link=”]

It is irresponsible to assume that $250,000 is not middle class in ANY situation.

The cost of living varies widely between different parts of the US. Family size is obviously another important factor – the cost of daycare is ludicrously expensive.

Lastly, many high earners have advanced degrees – which means there is a good chance that they also have massive student loan debt.

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