5 Best Money Resolutions for the Middle Class, According to Experts
Written by
Casey Bond
Edited by
Carly Brashears
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About half of the country is considered “middle class,” defined as those whose earnings put them in the 40th to 60th percentile of household income, or roughly $55,001 to $89,744 per year.
Though that might seem like a comfortable place to be financially (especially to those who earn less), it’s actually quite expensive to be middle class. To achieve that status, many people pursue college degrees, which can leave them strapped with student loan debt for decades.
There are also many government-backed financial assistance programs that middle class families don’t qualify for. Plus, the more you earn, the more you pay in taxes. All in all, it costs more than $36,000 per year to be middle class, putting some families with household incomes of $70,784 just $4,446 over the federal poverty line in 2023, according to analysis by Kiplinger.
That said, making enough money to be considered middle class puts you in a much better position than a lot of Americans. With the right priorities and financial moves, you have the opportunity to maximize your earnings and grow your wealth.
If that sounds like something you’d like to achieve in 2024, consider these money resolutions that are particularly well-suited for the middle class.
Get Serious About Investing
The top 1% of American earners now control more wealth than the entire middle class, owning close to half of all corporate equities and mutual fund shares in 2023.
“To improve their financial position, the middle class will need to take stock market exposure more seriously,” said Christopher M. Naghibi, executive vice president and chief operating officer at First Foundation Bank.
How? Naghibi highly recommends dollar cost averaging as a simple but effective investment strategy, and low-cost index funds as a solid place to put your money. He also said it’s important to take full advantage of any 401(k) employer match available. “You’d be surprised how fast it can all grow in just a few short years,” he said.
Eliminate High-Interest Debt
In the third quarter of 2023, total household debt reached a record $17.29 trillion, according to the latest Fed data. The increase was largely driven by mortgages, student loan debt and credit card balances, which surpassed the $1 trillion mark for the first time. Auto loan balances also increased to $1.6 trillion.
That’s why, for much of the middle class, one of the best resolutions for 2024 is to get out of debt and stay out, according to Jay Zigmont, a certified financial planner and founder of Childfree Wealth.
“Set a goal to pay down a set amount of debt in 2024, even if you can’t tackle it all,” Zigmont said.
First, you’ll need to stop taking out more debt, he explained. “Then get on a budget and make a monthly commitment to your debt, rather than just paying with what is left over.”
Diversify Your Income
You can only scrimp and save so much. Another way to improve your financial standing is to increase your income, which theoretically has no limit.
“I have always been a big fan of making money between 5 p.m. to 9 a.m.,” Naghibi said.
For example, you could start a small business doing something you’re passionate about. Or if you don’t want to invest too much extra time and energy beyond your day job, consider freelancing or doing contract work a few extra hours per month. You can then put that extra cash toward your goals, such as building an emergency fund, paying off debt or investing.
Invest in Yourself
“As Baby Boomers retire en masse in the upcoming decade, there will be a lot of opportunities for Gen X and Millennials to take those higher level jobs,” said Scott Lieberman, founder of Touchdown Money.
So in 2024, consider making it a goal to allocate resources toward personal development, such as learning new skills or furthering your education.
“This can lead to better job opportunities and overall well-being as you age, keeping you healthy and productive to take on more lucrative work,” Lieberman said.
Consider Getting a Real Estate License
Naghibi said he has always been a proponent of getting your real estate license.
“If you buy a home, you can use your portion of the commission toward your down payment,” he explained. “That’s like getting a discount off the top of the purchase price, and certainly a tool that can help you if your friends or family want to buy or sell a home.”
Plus, he added, real estate appraisal, real estate finance and real estate principles are all required courses in most states. “Not bad information to be well acquainted with, either,” he said.
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