5 Ways the Middle Class Spends Money Differently Than Poor and Rich People

Frustrated young woman stands on against ATM in a shopping center
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Despite declining since the 70s, the majority of Americans are still considered to be middle class. Their spending habits differ from the genuinely wealthy ones, as well as those less fortunate, and here are some of the most interesting examples we can learn from.

When wishes meet reality

According to Zach Larsen, finance expert and CEO of Pineapple Money, middle-class families have a habit of spending between “a comfortable lifestyle and the reality of financial responsibilities.” Gallup polling from 2022 shows that 52 percent of Americans believe they are middle class. People from this socioeconomic structure do not live “paycheck to paycheck,” but they still can’t just drop everything tomorrow and be financially secure.

Spending on education

Education is not a top priority for the rich because they already have connections and money to fall back on. It does not mean that education is unimportant, but there is less pressure from wealthy parents than from middle-class ones. Education is an enormous burden for people with low-income families, and they have to rely on scholarships. But, middle-class parents are “all about investing in education because it’s their ticket to getting ahead in life,” says Rob Whaley, a finance specialist at Horizon Finance Group.

Balancing act

Whaley added, “Pursuing an art major might be a passion but doesn’t always guarantee a stable income.” That’s why art is considered to be for the wealthy ones, with some exceptions. For the middle class, “It’s essential to strike a balance between passion and market demand.”

Investing in real estate

Middle-class people invest in real estate, just like the rich ones. Beth Sparrow, founder and editor-in-chief of online lifestyle magazine The VIP Roll, explained to GOBankingRates that “The middle class often invests in suburban real estate, prioritizing space and comfort.” In contrast, “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.”

Living beyond one’s means

Dennis Shirshikov, a finance expert, believes that middle-class people tend to overspend instead of investing. He stated, “As individuals earn more, they tend to increase their spending proportionally, or even excessively, which can stymie their ability to save and invest effectively.” This is best observed in shopping habits among middle-class individuals, who often buy more brand-name stuff than they need, though they tend to avoid luxury items.

Social pressure

Middle-class people often get caught up in emotional spending as well as buying to show they made it. There is always room for upgrades, and the middle class will most likely end up in debt because of the mentality we know as “Keeping Up with the Joneses.” money coach Mary Vallieu noticed that middle-class families buy pricey cars on leases. In contrast, lower-income families 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.”

Unfavorable money habits

There is no denying that middle-class people contribute to economic health and growth. But, they also deny themselves the luxury of long-term comfortable living. Relying on debts, overspending on unnecessary items, and ignoring retirement plans only make life more difficult. Many middle-class families need to rethink their spending habits to avoid financial vulnerability.

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