I’ve been thinking a lot lately about socioeconomic status—what it means, how we define it, and why so many of us seem to get it wrong.

In my journey through the world of personal finance and the FIRE (Financial Independence, Retire Early) community, I’ve noticed a curious pattern. People who, by any objective measure, grew up in financially secure households—private schools, multiple vacations a year, no worries about bills—still describe their upbringing as “middle class” or even “lower class.” It’s as if there’s a reluctance to acknowledge privilege, or perhaps a disconnect between reality and perception.

What exactly is socioeconomic status (SES)? At its core, SES is a multifaceted concept that encompasses both objective factors, like income, education, and occupation, and subjective perceptions of one’s social standing. However, research indicates that our perceived socioeconomic status often doesn’t align with our actual socioeconomic status. A meta-analysis by Kraus and colleagues in 2020 found a moderate correlation (r = 0.32) between objective and subjective SES. More than half the time, our self-assessment of our social standing doesn’t match the reality.

Why does this matter?
Our perception of our socioeconomic status can significantly influence our sense of meaning and purpose in life.

Meaning relates to how we interpret our past—the stories we tell ourselves about our........

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