I’m a Financial Advisor: 5 Worst Money Moves the Middle Class Could Make in 2026
Written by
Cindy Lamothe
Edited by
Amen Oyiboke
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Money mistakes happen to everyone — but for the middle class, a few wrong moves can really throw off your financial momentum.
As we head into 2026, new trends, market shifts, and lifestyle pressures are creating fresh traps for everyday earners.
GOBankingRates spoke with Jeffrey Hensel, broker associate at North Coast Financial, to discuss the worst money moves the middle class could make next year.
Taking On Too Much Variable-Rate Debt
With interest rates fluctuating, Hensel said some borrowers are tempted to lean heavily on variable-rate loans in hopes that rates will keep dropping.
But that can be a risky bet.
“Do not go overboard with the variable rate debt with hopes of further rate decreases — borrowers face a concussion when inflation levels off,” he said.
In other words, if inflation stabilizes instead of falling, rates might not decline as expected — and could even climb again.
That would leave borrowers suddenly facing much higher payments, throwing their budgets off balance. A safer move? Keep your debt mix manageable and consider locking in a fixed rate while you can still get a decent deal.
Holding Too Much Idle Cash
Keeping some cash on hand is smart — but letting too much of it just sit in a low- or no-interest account can quietly hurt your finances.
As Hensel put it, “Inflation is slowly burning the cash at a rate quicker than most imagine.”
In other words, the longer your money stays idle, the more its real value shrinks.
Putting that cash to work in higher-yield savings or investments can help you stay ahead of inflation.
Chasing Risky Online ‘High-Yield’ Investments
In a world full of flashy ads and viral money tips, it’s easy to get lured by online investments promising sky-high returns.
But as Hensel warned, don’t be tempted to pursue high-yield, high-risk investments that take place online.
Many of these opportunities are speculative — or even scams — and can wipe out savings fast.
Instead, stick with reputable platforms and investments that match your long-term goals.
Basing Real Estate Decisions on Short-Term Rate Forecasts
Trying to time the housing market is almost always a losing game, according to Hensel.
“Prevent short-term rate forecasts to use in buying real estate.”
Simply put: Don’t make major property decisions based on where you think interest rates are headed in the next few months.
Rates can shift unexpectedly, and buying a home should depend more on your long-term financial readiness than short-term predictions.
Using Home Equity To Fund Lifestyle Spending
Your home’s equity can be a powerful financial tool — but it’s not meant to bankroll everyday expenses.
“Do not camel through the eye of the needle by using home equity to finance consumption,” said Hensel.
Tapping into your home’s value to cover vacations, shopping, or other short-term wants can leave you overleveraged and vulnerable if housing prices dip or rates rise.
Save home equity borrowing for strategic, long-term uses — like renovations or debt consolidation — not lifestyle upgrades.
The Bottom Line
According to Hensel, by accumulating liquidity, fixing liabilities, owning assets that protect against inflation, real estate is real cash flow that has always been, and still is.
“Disciplined planners will enjoy financial stability next year, and not optimistic speculators,” he said.
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