People are creatures of habit — and this applies just as much to the middle class as to the poor and rich alike. This means their socioeconomic status is often reflected in their spending choices.
While there are no universal rules, there are some expenses that the middle class are more likely to put their money toward. In a Business Insider hypothetical question of how they’d choose to spend an extra $1,000, middle-class respondents said they’d be most likely to save — compared to poor and working-class individuals who would choose to pay off debt or affluent Americans who would prioritize investing.
“When we look at how the middle class typically spends their money, it’s a mix of striving for a comfortable lifestyle and the reality of financial responsibilities,” said Zach Larsen, finance expert and CEO of Pineapple Money. “For many, that means investing in a modest home, a reliable car, and ensuring a good education for the kids. Building a financial safety net through retirement savings and insurance is also a common priority.”
According to experts, building wealth ultimately comes down to mindset. By understanding the way we think, we can change our spending habits and set ourselves up for greater financial success. Below is a look at the different ways the middle class chooses to spend their money — both the good and the bad.
Debt That Doesn’t Serve Them
“The middle class often carries a load of debt, from mortgages to car loans and those pesky student loans,” said Larsen, noting that these financial commitments can eat into their discretionary spending and limit their savings. “Taxes and healthcare costs can also take a significant bite out of their income.”
Unlike the rich, many middle-class people fall into the trap of accumulating debt that isn’t backed by the acquisition of income-generating assets, said entrepreneur and personal finance expert Jacquesdu Toit, who advocates for leveraging debt to acquire assets like real estate that produce positive cash flow.
Toit said, “Some middle-class families find themselves burdened with liabilities such as cars, luxury goods or other non-essentials bought on credit.”
Another area middle-class families often will give a significant portion of their income to includes educational expenses, including private schools or college tuition.
“The middle class is all about investing in education because it’s their ticket to getting ahead in life,” said Rob Whaley, a finance specialist at Horizon Finance Group. “They see it as a way to land better jobs and keep their finances on solid ground.
He added that the wealthy have money in the bank and connections to spare, so education isn’t as urgent for them.
“On the flip side, the poor often struggle with tight budgets,” Whaley said. “The middle class sees education as their ladder to a brighter future, a way to climb the social and economic ladder, so they put it high on their to-do list.”
While education is often seen as a valuable investment, according to Toit, many middle-class individuals sometimes spend heavily on educational paths that neither align with their passions nor promise substantial financial returns.
“For instance, pursuing an art major might be a passion but doesn’t always guarantee a stable income,” Toit said. “It’s essential to strike a balance between passion and market demand.”
When it comes to the middle class, one of the most common things they tend to spend money on is real estate.
“This is because they often have the financial means to purchase a home but may not have the same access to the same level of luxury that the wealthy have,” said Marc Afzal, CEO of real estate investing company Sell Quick California.
Other experts agree. Beth Sparrow, founder and editor-in-chief of online lifestyle magazine The VIP Roll, noted that those from the middle class are big into buying suburban homes.
“The middle class often invests in suburban real estate, prioritizing space and comfort,” she said, “whereas the rich might opt for premium locations or multiple properties and the poor typically rent or live in urban areas due to work proximity or affordability.”
Brand-Name, Non-Luxury Goods
Middle-class families often will go for brand-name products that aren’t necessarily luxury but can still add up to their monthly costs.
“The middle class sometimes goes overboard with buying stuff, and it’s not a great deal,” Whaley said. “They get caught up in wanting all the latest things, even if it means racking up debt. It can mess with their finances and make them work like crazy to keep up.”
Leasing Pricey Cars
In working with families of different income levels, money coach Mary Vallieu said one thing she has observed middle-class families buy is more expensive cars on leases or longer-term loans.
“I’ve seen quite a few seven-year and even eight-year loans lately on cars that are in the $50,000 to $70,000 range,” she explained. “Wealthier people tend to buy cars with cash or on very short-term loans. The lower-income families that I see usually have purchased or have been given used cars from friends or family members, many of which are under $15,000 — and quite a few are not financed at all.”
“Instead of travel experiences that the rich might indulge in or the staycations the poor might be restricted to, the middle class often chooses package holidays that provide value for money,” Sparrow said.
Afzal agrees with her, noting the middle class also tends to spend on experiences like vacations, concerts and other activities.
“This is because they may not have the same access to luxury items that the wealthy have,” Afzal said, “but they can still enjoy experiences that are more affordable.”
While poor families might opt for basic or secondhand items out of need, the middle class will often strive for upgraded versions including mid-tier electronics, slightly premium appliances or cars that balance between luxury and functionality.
“They’re not just buying a phone; they’re investing in one with enhanced features that might not necessarily be the top of the range,” said Jake Claver, a finance expert and qualified family office professional (QFOP) at Digital Ascension Group.
Even as middle class Americans can afford a higher quality of lifestyle, they should keep an eye on doing more than just spending on pricier items to truly thrive and progress toward financial independence.
“I believe in the importance of aligning spending with value and long-term benefits,” Toit said.
This involves building businesses, investing wisely, cleaning up personal finances and leveraging automation tools and tricks.
Toit added, “The goal is not just to earn but to create a sustainable lifestyle that allows for both enjoyment and growth without unnecessary financial strain.”
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