I Grew Up Middle Class: Here’s What It Taught Me About Money
Written by
Jordan Rosenfeld
Edited by
Chris Cluff
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We hear a lot about the middle class, most often in the context that it is “shrinking.” According to the Pew Research Center, being middle class means you have an annual household income of two-thirds to double that of the national median income.
According to the U.S. Census Bureau, the median household income in 2022 was $74,580, which means middle-class households earn between $49,720 and $149,160.
What constituted middle class in 2020 was 50% more than the income in 1970, so being middle class has shifted in an upward direction. However, people who have grown up middle class have some unique perspectives on money.
To learn more about the middle class money approach, we spoke to someone who grew up middle class: Ellen Cibula, founder of Ellen H Cibula, Inc, a fintech consulting company.
Spend Less Than You Make
For Cibula, growing up middle class meant to live within your means and save what you didn’t spend.
“My parents both came from lower middle class families,” she explained.
Her mother grew up during World War II in Berlin, where food and other necessities were scarce. She went on to be a stay-at-home mom until Cibula was in middle school, when she became a nurse. Her father was a civil servant who retired from NASA.
“It was important that we learn to live with a budget,” Cibula said. “I was able to carry this through into adulthood and was always able to save money, no matter how little or much I was making at the time.”
This dedication to savings led to her being able to retire at age 53.
Education Is the Best Investment You Can Make
It was drummed into Cibula that “getting a quality education is a solid way to improve your circumstances.”
She doesn’t remember having any other choice offered to her but to go to college. She went to a state university, where she was able to supplement tuition costs with scholarships.
“I got my BS in biology and mathematics and my MS in computer systems management,” she explained. “I worked as a chemical lab analyst and then switched over to computer programming before I retired.”
Live Debt Free
Cibula said she was brought up to see most debt as bad, except for a mortgage, and to avoid it if possible.
“If you do have debt, pay the monthly payment and then pay extra against the principal,” she said. “And for an auto loan, once the loan is paid, continue paying the monthly amount to your savings account.”
This way, when you need to replace your car, you may have almost the entire amount for a new car saved, she explained. Using that method, she was able to live mostly debt free.
“My mom always said that a debt wasn’t a debt if you had the money in the bank to pay it,” Cibula said. “Sometimes it makes financial sense to get a loan, if the interest rate is low or zero, or you can negotiate a better overall price if you can get a loan.”
Cibula owns a nice home and some vacation property in the mountains and has not had any outstanding debt in over 10 years.
Throwing Food Away Is Throwing Money Away
Cibula’s mother taught her that food was never to be wasted.
“You can save money by shopping sales, eating store brands, eating out of your pantry and eating leftovers,” Cibula said. “As a consequence, I am a member of the clean-plate club and the leftover queen.”
The more food you save by eating it, the less you have to buy, she said, which translates into more money you can save.
A Sale Doesn’t Save You Money If You Don’t Need the Item
While $2 off cereal may sound great, Cibula said, why spend more money by using a coupon if you don’t need it?
“If something is on sale, but you weren’t going to buy it before the sale, don’t buy it just because it’s on sale,” she said, passing along another lesson she learned from her mother.
The Earlier You Save for Retirement, the More That Money Will Grow
Cibula was one of the lucky ones who learned at a young age about saving for retirement.
“The value of compounding interest was pounded into my head so often that when I didn’t start my 401(k) until I was 23, I was freaked out that I had waited too long,” Cibula said.
She put as much money as possible to get the company match, plus some more, so she could catch up. “And then I kept it up. Meeting the company match, if it exists, is another lesson — that’s just free money if you take advantage of it.”
Pretend Your Retirement Funds Don’t Exist
When it comes to retirement funds, out of sight, out of mind is a good thing, Cibula said. “If you don’t know you have money sitting in an account, you won’t be tempted to spend it. I never really thought about my retirement funds, other than to periodically check to see if it was still accumulating like planned.”
Without being tempted to withdraw that money, her investment only grew.
Buy a Car Only Every 10 Years or So
Another valuable lesson of growing up middle class was that buying a car too frequently is the same as throwing your money away.
“Buy reliable cars, and keep them for 10 years before you get a new one,” she suggested. “I had my first car for 17 years and this latest one for 14. If you get a reliable brand and do the required maintenance, it will last you that long.”
She learned that lesson the hard way, by witnessing bad experiences her parents had buying cars.
