7 Things the Middle Class Doesn’t Spend Enough Money On
Financial decisions aren’t just about balancing budgets — they’re about weaving a future that is both secure and fulfilling. For those in the middle class, reaching that tricky balance means investing in things that will provide real value not just for today, but for the long term.
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“Redirecting resources towards personal and professional development, health and meaningful experiences empowers the middle class to make lasting investments in their overall quality of life,” said Mark Stewart, in-house certified public accountant for Step By Step Business.
Here are some things the middle class doesn’t spend enough money on.
Health Insurance
“As a middle-class individual, health insurance should be one of your top priorities,” said Linda Chavez, CEO of Seniors Life Insurance Finder. “Many people tend to overlook the importance of having proper health coverage until it’s too late.
“In case of an unexpected illness or injury, not having health insurance can lead to major financial burdens that can severely impact your overall financial stability.”
Middle-class folks should consider investing in quality health insurance, said Nikita Sherbina, tech expert and CEO of AIScreen.
“Spend that extra $100 monthly for comprehensive coverage,” she said. “Allocate 15% of your income to a solid retirement plan. Let’s name it the ‘Future You Fund.'”
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Retirement Savings
While saving for retirement may not seem like a pressing matter when you’re in your 20s or 30s, Chavez said it’s never too early to start planning for your future.
“The middle class often has the misconception that they have plenty of time to save for retirement,” she said, “but the truth is that the earlier you start, the more time your money will have to grow.”
That said, you don’t want to wait until you’re nearing retirement age to start thinking about your financial future. With the uncertainty of government-funded retirement programs and the rising cost of living, experts say it’s crucial for individuals to have their own retirement savings.
By starting to save early, you can take advantage of compounding interest and build a significant nest egg for your retirement years. This can provide financial freedom and security, allowing you to enjoy your golden years without worrying about finances.
Education
Whether it’s for yourself or your children, investing in education is crucial, experts say. Education is often seen as a basic necessity, but many middle-class families don’t invest enough in their education.
“In today’s competitive job market, having a college degree or specialized training can greatly increase your chances of landing a well-paying job,” Chavez said. “Don’t be afraid to take out student loans if necessary — the return on investment will be worth it in the long run.”
Not only does higher education open up better employment opportunities, but it will also provide you with valuable skills and knowledge that can help you succeed in your chosen career paths. Lifelong learning through courses and workshops can also greatly benefit those in the middle class when it comes to staying relevant and competitive in the job market.
Home Maintenance and Improvement
Owning a home comes with its own set of expenses, especially when it comes to maintenance and repairs. Neglecting these tasks can lead to even bigger and costlier problems down the line, Chavez said.
“It’s important to budget for regular upkeep and address any issues as soon as they arise to avoid major financial setbacks,” she added.
“In our family, we’ve learned that opting for long-lasting furniture and high-quality tools pays off in the long run,” said David Floyd, CEO of The Pest Informer. “It’s a strategy that has saved us money because we’ve encountered fewer repairs and replacements over time.
“From my perspective, making the initial investment in new tools, windows and energy-efficient insulation may seem like a larger expense up front.”
However, he said having experienced the subsequent savings on his utility bills has made him appreciate the financial wisdom behind these decisions.
Charitable Donations
Giving back to your community and supporting causes you believe in is not only a fulfilling experience, it can also have positive impacts on your overall well-being.
“Middle-class individuals may feel like they don’t have enough money to donate,” Chavez said. “But even small contributions can make a difference.”
She said budgeting for charitable donations and finding causes that align with your values.
Homeownership
One of the biggest investments that people make in their lives is buying a home.
Yet, surprisingly, many middle-class families don’t prioritize investing in residential property because of high housing prices, lack of knowledge about real estate market trends, or simply not seeing the value in owning a property.
Homeownership not only allows you to have a place of your own, but it also serves as a long-term investment. As property values tend to appreciate over time, owning a home can provide financial stability and security for the future.
Additionally, residential property can also generate passive income through rental properties.
While buying a home may seem like a daunting task for many middle-class families, there are various options available like affordable housing schemes and government-backed mortgage programs. It’s important to consider investing in this kind of asset, as it can greatly benefit your overall financial stability in the long run.
Networking
Far from being mere social endeavors, Molly Haines, real estate investor and owner of Cash Home Buyers, said it’s important to establish crucial connections and support networks.
She said these can prove invaluable in various aspects of life. Regular reassessment of your social spending habits isn’t a rigid financial exercise, Haines explained.
“It’s a dynamic reflection of evolving aspirations and priorities,” she said, “ensuring that financial decisions align with the ever-changing landscape of personal and familial goals.”
Making time for coffee dates with friends and investing in get-togethers aren’t just friendly chit-chat — they also open the doors for other opportunities down the line. Haines adds that it’s about recognizing that these expenses aren’t just costs; they’re deliberate investments in a future that is both economically sound and rich in experiences.
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