3 Subtle Warning Signs You’re Backsliding to Lower Middle Class
Written by
Cindy Lamothe
Edited by
Amber Barkley
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Everyone likes to think they’re moving up in the world, but sometimes, without even realizing it, you can find yourself sliding back into old patterns.
While it’s not always dramatic — no sudden job loss or financial crash — those subtle behaviors can creep up on you. According to Mafe Aclado, finance expert and general manager of Coupon Snake, the descent from middle class to lower middle class hardly happens instantly.
“This is one of the problems with inflating your lifestyle as your earnings increase — the fact that it becomes much harder to control a negative spending habit once you have indulged it,” she said.
Here are some signs that you are slipping in status and some tips to keep you from backsliding out of the middle class.
Your Savings Are Stagnant
One of the reasons it can be difficult to tell that you are slipping from the middle class, according to Aclado, is that you may still be able to afford your basic needs. However, your spending habits may be eating away big chunks of the funds that should have been used to grow your savings.
“This is why one of the signs that you are falling off the middle class is that your savings are no longer growing at the projected pace,” she said.
If your savings are stagnant, she explained there is a big chance that you are slipping from the middle class.
To keep from backsliding, she added, it’s a great idea to track your income and expenses. This will help expose the areas where your funds are leaking, and then you can consider strategies to help optimize your savings plan.
Your Income Has Been Reduced Due to the Economy
Another sign that you are descending from the middle class to the lower middle class is that the value of your income has been reduced based on economic conditions.
“The value of your income isn’t judged by the figures, but by how much financial progress you can actually make with it,” Aclado explained.
In fact, a CBS news poll found that Americans incomes haven’t been keeping up with inflation this year.
If economic conditions like inflation are washing away the purchasing power of your income, then chances are you won’t be able to hold onto the middle class for much longer.
To fight this and tighten your grip on the middle class, Aclado advised diversifying your income sources. Consider wise investments, and readjust your budget as needed.
You’re Not Achieving Homeownership
This is one of the distinguishing hallmarks of middle-class status, said Aclado. That said, home prices have doubled in the last decade, according to data from the St. Louis Fed, and it’s not an easy feat. But it’s something experts say you should strive for for financial security.
While there is some debate among experts as to whether homeownership is still part of being middle class, if you haven’t gotten around to it just yet, then you may be slipping from middle class to lower middle class without even realizing it.
“After attaining middle-class status, you are supposed to keep progressing, because without growth, you are only on your way downward,” Aclado said. “There isn’t any middle ground to it.”
To keep yourself from backsliding, she said your best bet is to set clear financial goals — like owning your own home — and prioritize them.
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