13 Key Signs You’ll Always Be Middle Class
Written by
Jennifer Taylor
Edited by
Chris Cluff
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Right now, you’re firmly middle class. However, you might be wondering if the path you’re currently on will lead you up the ladder. Becoming part of the upper class doesn’t typically just happen. If want to reach this level, you need to make a host of wise financial decisions.
Ready to find out where you stand? Here’s a look at 13 key signs you’ll always be part of the middle class.
You Have a Taste for Luxury … That You Can’t Afford
Extravagances like expensive cars and high-end handbags are nice, but if you have zero money in savings, are struggling to pay the bills and don’t have a retirement plan, Andrew Van Alstyne, a financial advisor at Fiduciary Financial Advisors, said these choices aren’t wise.
“It’s OK to own all of those items, but not at the expense of you and your family’s future,” he said. “There’s an order of operations that should be followed when spending money, and this way isn’t it.”
You Make Emotional Financial Decisions
Spending money on a whim rarely ends well. Van Alstyne said it’s important to make a budget and stick to it, as assumptions only lead to failure.
“The extra time it takes to run the numbers on if a purchase makes sense — [which] honestly shouldn’t take more than an hour if this is an activity you perform frequently — will be well worth the peace of mind it will bring,” he said.
He said this is especially true with large purchases, as it can allow you to avoid overspending at the wrong times.
You Forgo Saving for the Future To Fund ‘In-the-Moment’ Experiences
“FOMO is nonsense,” Van Alstyne said. “This is not to say that you need to grind it out 24/7, but be reasonable with how you let off steam until you’re in a position where you can truly splurge.”
Practicing self-discipline can be hard, but you can do it. Remember, the sacrifices you make today will allow you to enjoy a more comfortable tomorrow.
You Blame Politics for Your Financial Situation
“Although our money does have faces of dead presidents on it, that green piece of paper doesn’t give a hoot about who’s in office,” Van Alstyne said. “Yes, policy can impact aspects of your financial world, but playing the victim card won’t change a thing.”
Instead, he said you need to focus on things you can control.
“React, adapt and exercise your right to vote,” he said. “Then move on to changing the poor financial decisions you were making before the last election cycle even happened.”
You Pass Up Professional Growth for Comfort
When you work a full day, it can be hard to get motivated to do anything work-related in your free time, but Van Alstyne said you need to push yourself to do so.
“It’s not necessary for you to work 80-hour weeks regularly, but if you can spare three-to-five hours per week, you can use that time to network, read a book, take a class or reflect on your workweek,” he said. “This may not bring about significant changes overnight, but it can open up professional opportunities for you and benefit you and your family personally in the long run.”
You’re Not Financially Aware
If you don’t understand how much income you’re bringing in and how much expenses are coming out of your account, Ben Lex, a financial advisor at Fiduciary Financial Advisors, said this is a problem.
“This results in a lack of awareness and intentionality regarding money,” he said.
You’re Deep in Debt
“I often see people leveraging an excessive amount of debt through credit cards or personal loans,” Lex said. “This results in an increase in monthly expenses, making it challenging to build wealth through saving and investing.”
Therefore, if you’re in debt, it’s time to focus on paying it off.
Most (or All) of Your Earnings Come From a Traditional Job
“Someone who has all or the majority of their income coming from [a] W-2 salary [is] very likely going to stay in the middle class for life,” said Kevin Lao, CFP, RICP, owner and financial planner at Imagine Financial Security, LLC. “This is the most tax-inefficient way to earn income and will likely prohibit that individual from getting into the upper middle or upper class.”
He said there’s plenty of ways to earn a more tax-efficient income. Some of these include starting a business or investing in real estate, agriculture, energy and stocks.
“These investments can provide some unique tax benefits that could provide long-term benefits and help you build multi-generational wealth,” he said.
You Don’t Have a Long-Term Financial Plan
“Individuals who remain in the middle class often don’t have a clear financial plan for the future,” said Khwan Hathai, CFP, CFT, founder and financial therapist at Epiphany Financial Therapy. “This lack of direction can hinder wealth accumulation and management, as it’s challenging to progress financially without specific goals or a roadmap.”
So, if you don’t have a long-term financial plan, consider making one as soon as possible.
You Take a Conservative Approach to Investing
“While caution is prudent, excessively conservative strategies or avoiding stock market investments can lead to returns that don’t keep pace with inflation, thereby limiting the potential for wealth growth,” Hathai said. “This often stems from a fear of risk, which can be mitigated through financial education and gradual exposure to diversified investment strategies.”
The more you learn, the more comfortable you’ll be investing your money in vehicles that will allow you to build wealth.
You Don’t Have an Emergency Fund
You never know when an unplanned expense will head your way, so you need to be prepared.
“Without a financial buffer, unexpected expenses can lead to debt and disrupt financial stability,” Hathai said. “This aspect ties into the psychological need for security, which is crucial for financial confidence and growth.”
You Succumb to Lifestyle Creep
When you get a raise, it can be tempting to take your lifestyle up a notch, but doing so can hinder your financial future.
“Lifestyle inflation, where expenses increase in line with income rises, can also prevent wealth accumulation,” Hathai said. “This pattern reflects a challenge in balancing present enjoyment with future financial security.”
Your Financial Literacy Isn’t Great
“Financial literacy is a key component of moving towards financial prosperity,” Hathai said. “This involves not just learning about finance but also overcoming psychological barriers to implementing that knowledge effectively.”
If you’re able to recognize and address these patterns, she said this can serve as a significant step towards financial growth.
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