5 Mistakes Made by the Middle Class That Prevent Them From Being Rich, According to Financial Experts, by Yaël Bizouati-Kennedy

I read a lot about taking control of your finances, living below your means, saving money, and frugality. Why, you might ask? Over the past several years, we have found ourselves in a financial bind. I make no excuses for who or how this happened. What I do know is that I need to fix it FAST, if I ever want to retire or, as I like to call it, retire-lite. (My definition of retire-lite: working part-time or a side gig to supplement your income, but still be able to do fun things.) I need to stop making these mistakes and start building towards a better financial future. My goal is to leap from the lower middle class to the higher middle class. I don’t aspire to be money-rich. I aspire to be emotionally comfortable and experience richness.

Back to the Article

The second paragraph slapped me upside the head. Quote: “To put this in perspective, for the Pew Research Center, there is a clear definition of what middle-income households are: those with an income that is two-thirds to double the U.S. median household income. And that median income was $74,580 in 2022, according to the latest Census Bureau data.” I’m no mathematician, but $74,580 plus 66% equals $123,802.80. This amount places me at the high end of the Lower Middle Class.

Considering that I live in an area in the country where my salary goes a long way, and the median household income is a little less than half of what I make, I would have thought I was firmly in the middle class. I am well paid for both my area and profession. I was wrong-ish. Here I am, middle class. Elsewhere, I’m not.

Which leads to why

Lifestyle Creep.

Yep! Fell for this ‘hook, line, and sinker.’ I made more money, and we spent more money. We didn’t try to keep up with the Joneses. We were enjoying the experiences of travel. Those experiences cost money. Where did we get that money? Credit cards. Yikes!

Poor Debt management.

Our debt management plan was to ignore our debt. Trust me on this one… Bad Idea!

Over-Investing in a Home.

I can safely say that this is the only one we didn’t fall for. How weird is that! We bought a truck and travel trailer, but have since paid off most of that debt.

Inadequately Planning for Emergencies.

LOL! Our plan for emergencies was to put it on a credit card. I don’t recommend this plan. I’m still paying for emergencies from five years ago. Need new truck tires while traveling? Just add it to the credit card. When they say that most Americans are $400 away from a financial hardship, it was the sad truth for us.

Lack of Financial Literacy.

This is the one I want to focus on in this post. The article says, “Americans do not have a strong understanding of personal finance or investing…,” and the author couldn’t be more right. I am clueless when it comes to smart investing or tax strategies. Since I don’t have any money to invest more heavily yet (I’m getting closer every month and feel especially proud that I now have a high-interest savings account to build that emergency fund). I feel it is essential for me, and I think many of us, to educate ourselves on financial literacy. I can’t keep calling my financially astute brother-in-law. It just feels weird.

Free personal finance courses

To that end, I have compiled a list of free financial courses that I found. This list is not comprehensive, and I haven’t yet vetted it; however, since it comes from universities, I hope it is accurate or at least helpful.

• Personal & Family Financial Planning from the University of Florida
• Personal Finance 101: Everything You Need to Know from Udemy
• PurdueX: Personal Finance from Purdue University
• Personal Finance, Part 1: Investing in Yourself from WellesleyX. Hosted by www.edx.org
• IUx: Introduction to Personal Financial Planning by Indiana University. For $199 (a 30% First-time learner Discount of $139.30), you can obtain a certificate.
• Become financially savvy with free online courses from MIT. They offer a wide range of courses and a comprehensive YouTube channel.
• Financial Planning for Young Adults from Illinois. I wouldn’t consider this course to be only for young adults. I plan to start with this one.
• McGill Personal Finance Essentials from McGill University.

Striving for the middle class

Over the last seven months, I have taken control of my finances. I’ve created a zero-based budget, a credit card pay-down plan, and an automatic withdrawal emergency fund. Amazingly, the results are starting to show. My credit score has increased by over 100 points since a year ago, and the amount of unsecured personal loan offers has tripled (although I will never accept one, I do wish they would stop calling me!). However, the most significant benefit is the relief I feel knowing that I can live within my means and still pay down my existing debt. My goal is to be debt-free and firmly established in the middle class (I don’t aspire to be rich, although I wouldn’t be opposed to it. LOL!) by December 2026.

Do you have financial goals that are eluding you? Like me, you may want to take a course or two to attain them.