7 Things the Middle Class Spends Too Much Money On

While being middle class generally signifies financial stability, many middle-class families actually live paycheck to paycheck.

It can be easy to overspend on non-essential items in an effort to keep up with the Joneses. But being more mindful of spending habits can help the middle class build up savings and reach their financial goals.

To find the balance between needs and wants, consider curbing your spending in the following categories.


Housing is typically the biggest monthly expense for middle-class households. With rising home prices in many areas, some middle-class families stretch their budgets thin trying to afford the nicest home they can.

While owning a home is often considered part of the American dream, buying more house than you can reasonably afford is risky for your financial security.

“On average, Americans allocate about 35% of their expenditure to housing,” said Andrew Latham, the director of content at Supermoney. “Not long ago, Americans would spend more on food than housing, but now housing is by far the biggest expense of most families.”

It’s understandable to want a beautiful, spacious home. However, consider lower cost areas or more modest homes that still meet your needs.

Car Payments

Cars depreciate fast, yet many middle-class buyers opt for expensive auto loans to finance newer luxury cars. Keeping up with the latest models and technology can cost thousands in excessive car loan payments.

“Big car payments can eat into your budget,” said Lynn Toomey, founder of Her Retirement. “Consider if you really need that brand-new car with all the bells and whistles, or if a reliable used one would do the job just as well.”

“The second-largest expenditure category is transportation,” said Latham. “Many of us spend way beyond the recommended 10-15% of our monthly take-home pay on a car payment. To reduce expenses, consider being a single-car household, use public transportation, carpool, buy used vehicles, or go for cars with better fuel efficiency.”

Test driving used models in good condition can reveal a practically brand-new car for a fraction of the price. Prioritize reliability and safety over lavish upgrades that don’t improve your driving experience. Refinancing car loans can lower monthly payments too. Consider all options before committing to years of expensive payments.

Dining Out

Nights out for dinner or drinks are fun, but dining out too often can really drain a middle-class budget. The convenience of eating at restaurants or getting delivery makes it easy to make it a habit several times a week. However, preparing meals at home is significantly cheaper.

“Eating at restaurants and grabbing takeout can be convenient and fun, but it can also add up quickly,” said Toomey. “Cooking at home more often can save a bunch while still enjoying delicious meals.”

Limiting dining out to once or twice a week and cooking at home for other meals can potentially save thousands of dollars over the course of a year. Meal prepping can make home cooking efficient during busy work weeks.

Brand-Name Shopping

Name brand clothes, accessories and other consumer goods are ubiquitous. Advertising and social pressures make coveted brands seem like necessities. However, buying brand name products just for the status can excessively inflate middle class spending.

Sometimes, we get caught up in the allure of brand names,” said Toomey. “But often, generic or store-brand items are just as good as the fancy ones, and they cost less.”

Consider whether brand name items are actually higher quality and worth the price tag. Don’t underestimate cheaper items–store brands have vastly improved in quality.

Tech Upgrades

It’s tempting to upgrade to the latest smartphone, laptop or other tech each time new models are released. However, upgrading too frequently can become very costly.

“New gadgets are enticing, but sometimes it’s smarter to hold onto your current phone or computer a bit longer,” said Toomey. “They’re often still perfectly functional.”

Unless your current tech is truly slow or broken, resist the urge to splurge on upgrades. Minor new features are often not worth hundreds of dollars. Wait at least two to three years between new laptops and smartphones to maximize your investment. Selling gently used electronics can offset upgrade costs too.

Credit Card Interest

Carrying a credit card balance and paying interest charges should not become a long-term habit. However, many middle-class consumers underestimate how small purchases here and there rack up interest payments over time.

“Paying high-interest rates on credit card debt can really set you back,” said Toomey. Try to pay off those credit card balances and avoid carrying a balance whenever possible.”

Ideally, credit cards should be paid off in full each month. Transferring debt to a low or no interest balance transfer card can provide temporary savings too. Always pay down your highest interest debts first.

Unused Subscriptions

From streaming services to gym memberships, subscriptions can accumulate quickly. With autopay set up, it’s easy to forget about unused subscriptions. However, these inactive subs can silently drain hundreds a year.

“Are you subscribed to streaming services, magazines, or apps you rarely use?” asked Toomey. “It might be time to review your subscriptions and cut the ones that aren’t adding value. If you’re not using your gym membership regularly, it might be worth canceling or switching to a more affordable fitness option.”

Comb through credit card and bank statements to tally up subscriptions. Be brutally honest about which provide enough value to justify the costs. Downgrade plans or cancel unnecessary services. For gym memberships, consider cheaper gym chain options or exercising at home if you aren’t going regularly.

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