6 Money Habits the Middle Class Think Are Normal — But Are Keeping Them Broke

We pick up all kinds of habits without even realizing it. And of course, habits can be both good and bad. Bad habits around personal finances can make your life more stressful, keep you living paycheck to paycheck and keep you stuck in the middle class when you’re trying to get ahead.

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Working Harder, Not Smarter Lifestyle Creep Having Just One Source of Income Living on Credit Paying the Minimum on Credit Each Month Not Having an Emergency Fund

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Many of these habits are so common you might not even realize you have them. It’s a good idea to take a hard look at the habits you have around money. Once you’ve identified them, you can do the work to change them for the better.

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Working Harder, Not Smarter

It’s easy to believe that grinding harder means you’ll make more money. You can stay late, take on extra shifts, even give up your weekend.

Putting in long hours like this might impress your company. You might earn a raise or a promotion. But you’re setting an unsustainable baseline for yourself. Your employer will expect that kind of output all the time. That makes your job less secure, not more secure.

Find other ways to earn more while working less. Invest your extra time in learning new skills to advance your career and invest any extra money so that it works for you.

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Lifestyle Creep

If you get a raise or a higher-paying job, it’s tempting to spend that extra money. You’re earning more, you can finally afford that nicer car, right? But living this way can easily soak up every extra dollar you’re earning. You end up with just as much money as you had before you got that raise.

Lifestyle creep will lock you into a cycle where you’re earning more but still saving nothing. The problem is, the things you’re buying don’t make you any wealthier.

Having Just One Source of Income

Many middle-class families don’t have more than one income stream. It’s perfectly normal to rely on just one paycheck, but it’s risky. Anything could happen: you could lose your job, your hours could be cut or the company could go bust. Any unexpected change means your finances are thrown into chaos.

Some freelance work, a small side business or a way to earn passive income are all great options. This way, if something goes wrong, you’ll have some cushion.

Living on Credit

It’s perfectly normal to use credit for your everyday purchases. Just swipe your card and worry about the bill later. But this makes it too easy to spend more than you earn. Letting debt pile up like this will keep you from saving any money. You’re spending money before you’ve even earned it.

If you carry a balance month after month, it adds up fast. And it can easily turn into debt that you’re stuck with for a long time.

Paying the Minimum on Credit Each Month

Paying the minimum is good in that you’ll avoid fees and avoid hurting your credit score. As long as you’re not missing payments, you’re staying afloat–but minimum payments are a way of keeping you in debt as long as possible. Credit card companies love it when you only pay the minimum. It means thousands in profit for them.

This is one of the most expensive money habits to have. It can make you stretch your debt out for years longer than necessary. The interest can pile up so high that you might end up paying three or four times the original purchase price.

Not Having an Emergency Fund

If you don’t have cash saved for emergencies, it can hurt a lot more than you might think. Any surprise expense, such as a car repair or medical bill, can force you to use credit cards or take on other debt. One unexpected bill can set off a chain reaction of money problems.

Instead of focusing solely on the present, think worst-case scenario. Get into the habit of setting aside a little each month until you have enough to support you for at least three to six months.

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