There's an interesting article today on MSNBC.com entitled "Who or what is the middle class?" Just about everyone I know considers themselves to be "middle class" whether they have modest incomes or ones that would place them in the top 5% of all American households. Our first year of marriage we had a combined income of roughly $35k/yr; we felt broke but still middle class. It helped that we lived in military housing, received free healthcare, and resided in an area with a low cost of living (Kentucky). Last year, we had an income that was significantly higher but we still feel a bit squeezed. We now pay over $35k/yr just for rent, utilities, healthcare, and student loan repayments.
To be fair, we do have quite a bit nicer lifestyle now than we did 8 years ago. We rent a 3 BR 2 1/2 BA townhouse rather than a teeny 1 BR 1 BA apartment. Instead of a 12 year old car with zero frills and 150,000 miles on it, we now drive a 3 1/2 year old car that has automatic shifting, power windows & doors, power steering, cruise control, a CD player, and 60,000 miles on it. We have a high-speed Internet connection instead of dial-up. We both have cell phones. We have an electric dryer & I no longer have to hang up our laundry on a clothesline. However, we still can't afford what I would consider to be an "affluent" lifestyle.
Buying a home here on the Peninsula is totally out of the question as our housing costs would almost triple. We can't afford private school tuition, which is a major factor in our decision to homeschool. We share 1 economy car. Our vacations are to visit relatives or local national parks like Yosemite. We don't wear designer clothes unless it's a gift or I can find a super bargain at the local consignment shop. We don't own fancy electronic gadgets or appliances. Not that I want a BMW, plasma screen TV, or Manolo Blahnik shoes, but it would be nice to have the option to buy a home, send our kids to a good school, and see the world.