4. They Rarely Live Below Their Means
People in the middle class tend to live a lifestyle that they can just barely afford. Even if they get a raise and start making more money, they would rather upgrade their lifestyle to match their higher salary. If they had just continued to live below their means, they might have money for investments, savings, and so much more. However, the pull of flaunting the latest trends and fads by pretending that they have money to burn can be too much to resist. So they continue throwing away hundreds of dollars a month on gourmet coffee at Starbucks, even more money than that on designer clothes, and even more money than that on interest and fees for credit cards.
If many middle-class people did a budget, they would realize that they are over-spending. For example, they might want a Tesla Model 3, which would be around $600 a month. If they did a budget, they might realize that they can only afford $400 per month. But they will often still go for a more expensive option because it’s what they want. Often, middle-class people are over-spending on can be acquired for much cheaper if they buy them used. For example, a used version of the same Tesla Model 3 might come closer to $400 per month and be within their spending range.