5 Money Habits the Middle Class Needs To Stop Doing To Become Upper-Middle Class
Written by
Gabriel Vito
Edited by
Zuri Anderson
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About one in four U.S. households spends more than 95% of their income on necessities, according to a 2024 Bank of America Institute analysis. Even among households earning over $150,000, roughly 20% fit this “paycheck to paycheck” definition.
What sets apart the families who move beyond that tight margin isn’t luck or harder work. It’s the day-to-day habits shaped by rising costs, social expectations and advertising.
GOBankingRates outlined a blueprint for middle-class households who want to break that pattern and climb into the upper-middle class. The habits and strategies that follow are drawn from insights shared by experienced financial professionals and are designed not just to relieve financial pressure, but to create the surplus and investment growth needed to cross that next financial threshold.
As you read these tips, think of them as puzzle pieces. When they fit together, they can give your finances a better chance to grow over time.
1. Stop Letting Every Raise Inflate Your Lifestyle
Lifestyle inflation (spending more as soon as you make more) can cancel out every raise.
“This happens when income rises and their lifestyle uses the extra income,” said Chad Gammon, certified financial planner (CFP) and owner of Custom Fit Financial. “An example would be a wage increase and then deciding that the vehicle you are driving isn’t good enough and you need to buy a new vehicle rather than saving that money for retirement.”
Paul Cheetham, CEO and founder of Vanla Group, added, “The most common habit facing middle-class families that is preventing wealth creation is thinking and acting like they are already upper-middle class. In wealth creation, it is the opposite. You act like the person you are trying to get away from. Don’t make financial decisions as if you already have increased your wealth.”
The key is to decide where every raise will go before you spend it and to keep living below your means. By setting clear savings targets and resisting social pressure to upgrade, each pay increase can help build lasting wealth instead of slipping through your fingers.
2. Stop Spending New Income Before You Invest it
Side hustles and pay increases only help if you keep the money.
“But here is the key: All or most of that income you make from the side business you invest that, so your spending does not grow to fit your new income,” said Vince Stanzione, a self-made multimillionaire and New York Times bestselling author of “The Millionaire Dropout.”
“I had years when I was pulling in millions of extra income, but I stayed in the same house, drove the same car and really did not spend any more than I had in the lean years.”
3. Stop Ignoring Taxes When You Invest
Taxes can quietly erode returns.
“Another habit that prevents growth is not being tax-aware, where you factor in the tax implications later on,” Gammon said. “An example would be investing in a taxable brokerage account when you could have invested in a Roth IRA.”
He recommends learning the basics or working with a financial planner or CPA, noting that tax laws change often and require attention.
4. Stop Letting Small Daily Expenses Drain Your Savings
Cheetham points to overspending on vehicles, eating out, takeout, and other convenience purchases as common drags on upward mobility. High-interest credit card balances and skipping retirement contributions also divert money that could compound over time.
5. Stop Relying Only on a Single Paycheck
This is common advice in the personal finance world but essential for good reason.
“Many in the middle class tend to be salaried, so what I called ‘paid by the hour,’ but that means you can only earn so much,” Stanzione said. “Even if you are a highly-paid lawyer or doctor, your income is restricted to your hours.”
Building automated side income or other revenue streams gives you extra funds to invest and accelerates every other step.
Final Take To GO
These methods work best together, reinforcing one another to help a middle-class household move toward upper-middle-class wealth.
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