4 Things You Can’t Do If You’re Trying To Move Up From the Middle Class

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Those trying to move upward economically from the American middle class are often offered positive advice on how to do exactly that.

Make sure to invest wisely, max out your Roth and 401(k), take on a side gig if necessary — these are all proactive measures that would-be wealthy individuals should be engaging with if they want to cultivate even greater assets in the years to come.

But what about the negative pitfalls to avoid? These are less frequently discussed, perhaps out of a contemporary fixation with addressing the positive steps first and foremost, but remain equally as important. Here are four things you should absolutely steer clear of if you’re looking to gain a foothold in the upper class.

Don’t Park Your Money in Low-Interest Savings Accounts

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Pointing out that national banks often take advantage of clients by offering “a terribly low interest rate,” finance YouTuber Vincent Chan indicated that it was an extremely unwise move to park your money in a low-interest savings account.

“I personally keep my savings … in this thing called high-yield savings accounts or HYSAs. The main reason? They can pay you 51.5 times more money compared to the big national banks. For instance, I receive hundreds of dollars in interest every single month for just keeping my money in a HYSA,” Chan said.

Don’t Pay Interest on a Car Loan

The Ramsey Show co-host George Kamel took to YouTube in 2023 to explain exactly why middle-class earners shouldn’t be taking on car loans.

“The average monthly payment for a used car is over $500 and for a new car, it’s over $700. No. You’re going into debt, with interest, while your car plummets in value every single day,” Kamel said. “Get this, in the first five years, a car loses 60% of its value. Just buy a used, reliable car, get it inspected by a mechanic and pay cash.”

Don’t Try To Outplay Credit Card Companies

Kamel said it was a fool’s errand to try and game the credit card system. Indicating that credit card companies conduct endless experiments to ensure that they’re making money from rewards systems rather than losing capital, Kamel made his case.

“I hate to be the one to break it to you, but when it comes to gaming the rewards, the only thing getting played here is you. ‘But I pay off my card every month, George, what’s the big deal?’ Well, the reality is that 40% of Americans don’t, and you could eventually fall into that trap.”

Beyond that, of course, holding a significant debt on a high-interest credit card is clearly also something to steer clear of.

Don’t Allow Impulse Buys To Sap Your Wallet

Impulse buys may seem like modest expenditures in many cases (even when they aren’t), according to The Frugal Expat, but the reality is that the funds being tossed aside in the heat of the moment could be put to much better use in terms of wealth generation.

A penny saved isn’t just a penny earned, it’s a penny that can be put to work for you in terms of dividend-generating investments, investments which generate compound interest, etcetera.

The Frugal Expat advised abiding by the established 30-day rule. Waiting 30 days from the time you first express interest in an item or service before pulling the trigger helps one differentiate between wants and needs.