How Close Are You to Falling Out of the Middle Class?

Bill Hall, Edward Jones
Bill Hall, Edward Jones

From middle class to shaky ground, 23 million Americans are not financially ready to handle the economic recession. NewsChannel 10's Kristen Guilfoos tells you how to tell if your family is in trouble.

First things first, Let's define middle class.  Ask one hundred people and you'll get one hundred different answers. For the purpose of this report, we're defining middle class as an annual income between $40,000 and $100,000 for a family of four. So, how close are you to falling out of the middle class? Fortunately... Finding out is easier than you think. Answer these four questions honestly to see if you're on easy street or headed towards some major financial roadblocks.

1) Take a look at your assets. How much money is in your emergency fund? Edward Jones' Bill Hall says, "Normally that should be three to six months worth of living expenses. Not how much you make, but how much it takes for me to pay the bills, leave the lights on, and that number should be three to six percent."

2) How much money do you have left over after paying all of your expenses? If it's less than $100, you're making yourself vulnerable. If you're saving ten percent every year, you're in good shape.

3) How much do you spend on housing every month? Hall says "that number ought to be around twenty percent. If it gets up around thirty, you get over thirty, that's pretty high. You should think about doing some down-sizing house wise or doing some re-financing."

4) Does every member of your family have health insurance? If the answer is no for even one person, you're making your self vulnerable to devastating medical expenses.

If you want to get a more in depth analysis and rate your family's financial security, you can go to this web site:

Most of this information came from the "The Economic Decline of America's Middle Class" study. If you want to read the entire report, click here: