7 Ways the Middle Class Can Improve Their Financial Outlook in 2024

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It’s not too late to set financial goals for the new year. If you are wondering which money resolutions will give your middle-class household the best bang for its buck, here’s some inspo to get you going.

1. Create a Spending Plan

A spending plan is also known as a budget. This can actually be one of the most powerful weapons in your financial toolkit. With a spending plan, you can direct your money towards what matters most in life, be it saving for retirement, paying off debt, saving for college or covering an upcoming vacation.

Eric Bowie, founder of the website Smart Money Bro, was once drowning in debt and now boasts a seven-figure net worth. He said, “The most important thing you can do for your finances in 2024 is to get organized with your money.” Bowie went on to say, “You can do this by creating a unique monthly budget and then revisiting that budget at the end of the month to hold yourself accountable for your spending. Tracking your spending is key.”

Deandra T. Estelle, CPA and Owner of Taxes 911, LLC, confirmed this sentiment: “In order to change the trajectory of your financial success story in 2024 and beyond, commit it first in your mind, followed by the creation of a realistic budget that takes a hard look at your income, expenses, debt, and lifestyle needs”.

Resolution: Resolve to create a spending plan or budget and stick with it throughout the year. It’s a skill that takes time to develop and improve, but the results will be very worthwhile.

2. Manage and Reduce Debt

If a good deal of your income is spent on debt, there’s no time like the present to eliminate this line item from your budget. Aim to pay down debt aggressively to free up more money in your budget.

The idea here is that you want compound interest working for you, not against you. Money spent on exorbitant interest every month can’t work for you. The more money you can save and invest, the more freedom you’ll have.

Resolution: Resolve to pay down debt aggressively. Put a number to the amount of debt you want to knock out this year, and create a plan to accomplish that goal.

3. Save Up an Emergency Fund

If you’ve developed a dependence on debt to cover your household’s basic needs, creating an emergency fund is a great way to wean yourself off debt dependence.

Depending on the size of your household and other financial circumstances, consider creating an emergency fund between $1,000 and $3,000. This way, when an unexpected expense arises, there’s no need to rack up more debt. You can simply dip into your emergency fund and then replenish it as more money comes in. From here, you’ll rinse and repeat this process to avoid using debt while padding your savings for more financial stability.

Aitzarelys Negrón, a CPA, money coach and Founder of Strategies & T.E.A., also recommended creating specific funds, also known as sinking funds, “that align spending with financial priorities, allowing you to say YES to more.”

She added, “Sinking funds help you set aside a little each month for your true expenses (think: emergency fund, annual HOA fees, holiday spending, etc.), simplifying money management and providing peace of mind.”

Resolution: Determine how much you want to maintain in your emergency fund’s savings account. Create additional sinking funds for upcoming expenses you’ll need to plan for.

4. Adopt a Frugal Lifestyle

If the idea of creating a budget, getting out of debt and creating an emergency fund seems daunting, there are many ways to succeed with these endeavors.

A frugal lifestyle can help you reach those goals much quicker and easier. Reducing your consumption and finding ways to save money will help put more money towards your goals, like paying off debt and saving.

Resolution: Determine spending areas you are willing to compromise on or completely eliminate. Set a time to audit your expenses and a timeline to execute your expense-cutting plan.

5. Consider Additional Streams of Income

Another way to reach your financial goals is to create additional streams of income. Earning more money can be as simple as having a garage sale or be as strategic as acquiring a portfolio of rental homes in working-class neighborhoods. The key is to do something within your financial reach while creating a reasonable amount of income without tons of stress or debt. 

With the internet at your fingertips, there’s no shortage of extra-income opportunities. From freelancing and providing services to drop-shipping and content creation, there’s plenty to choose from based on your personality type and financial goals.

Resolution: Carve out time to explore additional streams of income. Investigate the start-up costs and plan how you’ll get going, along with what you’ll do with the additional funds from this extra income stream.

6. Explore Tax Incentives

Whether you’ve got tons of income or not, it’s always wise to seek out ways to reduce your tax liability. Middle-class tax incentives could include one or more of the following:

• Earned Income Tax Credit
• 0% Capital gains taxes 
• Retirement contributions
• Saver’s Tax Credit
• Child Tax Credit
• Child and Dependent Care Credit 
• Flexible spending account for dependent-care expenses

These tax strategies require some planning and determination of eligibility. Make sure you speak with a professional who can help you employ the tax strategies that make sense for your household’s situation.

Resolution: Meet with a CPA or tax professional before the tax season begins to create a proactive plan for reducing your tax liabilities. Discuss what you can do throughout the year for the smallest tax bill possible.

7. Prepare a Financial Legacy

With these New Year’s resolutions, you’re bound to make great progress with your financial goals. Don’t let your hard work go to waste without a plan to ensure your wealth’s longevity. Decide how you want your money to work for you while you’re alive and when you’re gone.

Resolution: Consult an experienced estate planner and share your financial goals with them and the legacy you’d like to leave to future generations. Create a plan regarding what happens to your money once you transition from this life. Take the proper steps to legalize your decisions and update whenever your life or circumstances change.

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