Typically, people in the middle class have some kind of college education, some disposable income, and may even be planning for retirement. But that doesn’t mean they are financially stable. In fact, middle class households usually have some kind of debt like a mortgage, auto loan or credit cards.
If you’re in the middle class and want to become financially independent or wealthy, here are some financial decisions or behaviors that might be keeping you from achieving this goal.
Trying To Keep Up With the Joneses .. Societal influences and pressure are very real concerns for many people, ones that often lead to extravagant purchases just to keep up appearances.
Spending Without Saving or Investing .. A common middle class money trap is spending all or more of your income without saving anything that will allow you to make investments that generate wealth. When people start making more money, they often become comfortable and settle where they are. This can keep them from achieving true wealth.
Relying on Yourself for Everything .. For the middle class, it is often not desired to hire things out or ask for help. However, the rich delegate as much as possible and work in partnerships to rapidly accumulate income and wealth.
Failing To Take Advantage of Investing .. Learning how to invest and actually doing it are also key to moving up from the middle class and building wealth. Some middle class individuals don’t invest because they don’t know how to go about it. Or they invest only in one or two things rather than diversifying their portfolios.
Relying on Credit Cards or Other Expensive Debt .. Another common middle class behavior is to rely on debt to afford their lifestyle. While this can make it easier to keep up appearances, it can also very quickly erode any wealth you have created.
Renting Instead of Buying .. While renting has its merits, it can also quickly become a trap that keeps you spending rather than building wealth. The rent you are paying is entirely an expense and contributes nothing to personal wealth. Buying a home is an investment that has a long track record of generating wealth.
Thinking You Need a High Salary .. Many people in the middle class tie their wealth or worth to their salary. You don’t need to have a high salary to become wealthy. You just have to spend less than you make.