7 Frugal Habits of the Middle Class

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People in the middle class often enjoy greater financial freedoms than those in the lower class, but that doesn’t mean they don’t have to worry about their finances. That’s why many of these individuals implement frugal money habits that help them stretch their budgets — and potentially give them more saving or investing opportunities.

These are some of the most common frugal habits that the middle class tend to have.

DIY Everything

One way of cutting expenses and living a frugal lifestyle is to do everything — or as much of everything as possible — yourself. People who want to save money might do things like fix up the front porch, handle basic plumbing or repairs at home and many other tasks so they don’t have to spend money paying someone else to do it.

“A survey by Porch.com revealed that 76% of homeowners did at least one home improvement project themselves during the pandemic, a habit many continue to save money,” said Jeff Rose, CFP and founder of Good Financial Cents. “This hands-on approach isn’t just about saving a few bucks — it’s about that satisfaction of being self-reliant.”

Cooking Meals at Home

Another frugal habit middle and lower class individuals tend to share is their focus on cooking meals at home, according to Karl Jacob, CEO at LoanSnap. This is for good reason as dining in or prepping meals at home can significantly cut down on annual costs.

“Cooking at home rather than eating out is a big one. It’s not just healthier for you; it’s healthier for your bank account too,” added Rose. “The average American household spends about $3,000 a year on dining out. So, eating at home is a huge savings [opportunity]. Middle-class families often have a rotation of budget-friendly meals and aren’t shy about packing a lunch.”

Make Your Money Work for You

Avoiding Debt (or Using it Strategically)

Although some people in the middle class do rely too much on debt, others are more cautious about it. Some will avoid it altogether. Others will use certain types of debt, like credit cards, to take advantage of the perks while paying off their balance to avoid interest charges.

“Using [credit cards] for points or miles is smart, but paying off that balance every month? That’s smarter,” said Rose. “It’s like playing the credit card companies’ game and winning.”

Focusing on Discounts

Although anyone can do this, people who need to be a little more careful with their spending tend to look for discounts whenever they shop. This is a way to reduce expenses, while freeing up some cash for other things like debt payoff, investing and saving.

Sebastian Jania, owner of Ontario Property Buyers, said that people in the middle class are more likely to “look through flyers in the mail to find deals on groceries or other expenses” and “wait in lineups for deals on Black Friday or Cyber Monday” before buying things.

Saving Money From Every Paycheck

Living frugally isn’t just about cutting costs. It’s also about saving money for long-term gain.

Jania suggested that people in the middle class often prioritize saving at least some money from every paycheck. They might even set up automatic deposits to make consistently saving easier and less of a hassle. All of this can help individuals either maintain their current financial status or even build wealth over time.

Make Your Money Work for You

Buying Used Rather Than New

Buying secondhand items isn’t only something the middle class individuals do, but it’s certainly a frugal habit many of these households share. Used goods, like clothes from a thrift shop or cars, tend to be cheaper than new ones. Depending on where you shop, they can also be of a high quality.

Saving Up Rather Than Spending

People in the middle class who live more frugally tend to save up for things rather than spend their money all at once. This allows them to avoid taking on debt while still getting the things they want or need.

Living frugally in this way also lets these individuals have money for other things, like investing in their retirement plans, said Jania. In some cases, such as for those who live on a more modest middle class income or have other major expenses, this might be the only way to be able to do this.

When it comes to retirement plans, like 401(k)s or IRAs, there are certain contribution limits that people must be aware of. For example, you can only contribute $6,500 to an IRA in 2023 — $7,500 if you’re over the age of 49.

Being careful about spending elsewhere and living frugally can make maximizing your contributions more feasible. It can also help you build toward retirement.

Do These Frugal Habits Help Build Wealth?

When asked whether these frugal money habits help people in the middle class build wealth, experts’ opinions varied.

“These habits do not help people build wealth; rather, they keep them stuck in the money status that they are in,” said Jania. “The reason for this is that these habits only focus on saving money rather than increasing one’s income and buying high quality assets that truly create wealth.”

Rose, on the other hand, had the opposite view.

“Definitely. By avoiding unnecessary expenses and interest payments, people can redirect funds into savings or investments,” said Rose. “Although I don’t have a specific percentage, financial advisers often suggest that the money saved should be put to work, either through retirement accounts like 401(k)s or IRAs or other investment vehicles, which can compound over time.”

In the end, it might depend less on the frugal habits themselves and what the individual is doing with their savings. If they’re investing in short- and long-term assets that grow over time or produce income, for example, they could build wealth. But if they’re simply saving up to buy a big-ticket item with no true gains, it probably won’t be as beneficial in the long run.

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