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You’re making the right moves with your money – or so you think. You’ve worked hard to earn a solid, middle-class income. You give priority to saving. Budgeting has become a habit. You don’t spend wastefully often. Yet you’re not building wealth the way you want to. You are facing a financial problem: What habits should you change to avoid getting stuck and become rich?
as host ofwealth rehabilitationAnd Nicole Lapine, best-selling author of books like “Miss Independent” and “The Money School,” is well aware that many of the habits middle-class people think are keeping them safe are actually keeping them from getting rich.
Lapin sat down with GOBankingRates as part of our Top 100 Money Experts Series to talk about how to identify and change these habits to build sustainable wealth. Luckily, it’s easier than you might think.
1. You make the mistake of saving money for wealth building
For Lapin, a key – albeit well-intentioned – mistake that many middle-class people make is confusing saving money with creating wealth.
“It makes sense to keep a lot of cash in a low-yield account, but inflation reduces its value every year,” he said. “Over a decade, that ‘safe’ money quietly loses real purchasing power.”
She issues a clear warning to anyone who thinks saving money — even a lot of money — is enough: “After all, you can’t save or budget for money,” she said.
2. You succumb to lifestyle inflation
Another common trap Lapine sees middle-class earners falling into is lifestyle inflation. Picture this: You get a raise or bonus at work, so you decide to treat yourself. Instead of just splurging on a small win, you start incurring additional costs through flashy upgrades to your home or car, or a new penchant for shopping at the fancy grocery store.
Lapin cautions against honing your lifestyle along with your income.
“A big paycheck should make a big difference between what you make and what you keep, but often it just takes a nice car or a big house,” he said.
3. You are not aware of ‘hidden dangers’
While middle-class people may carefully keep track of their savings, sometimes they don’t pay enough attention to what Lapin calls “hidden burdens”—expenses that quietly destroy wealth. These include high-interest loans, fees associated with bank accounts or mutual funds, and of course, all those annoying subscriptions that don’t seem like much individually but taken together can create a real drain on your accounts.
Recognizing ineffective habits can help you create better habits
Understanding where you are blocking yourself is the first step to moving forward. Next, Lapin wants you to examine the actual flow of your money.
She recommends downloading three months’ worth of bank statements and examining each line, holding up a magnifying glass to see where each raise, bonus or windfall occurred. Ask yourself whether that money helped you in meaningful, long-term ways — like expanding your investment accounts — or did it just go toward short-term spending.
“Measure how much of your net worth is idle cash versus invested capital,” he said. “Review debt with a cold eye: Charging anything more than you can earn from investing is slowing wealth creation.”
This exercise is not about guilt; It’s about clarity. With deep knowledge of your finances, you can make small, intentional changes that unlock growth.
Adopting positive habits can help you earn money
Lapin has good news for people who are worried that changing habits will be hard. Through consistency, smart decision making, and active money management, you can lean toward behaviors that will help you build wealth even on a middle-class income.
- Prioritize investments: “Make investments automatic and non-negotiable,” Lapine said. “Send money directly from each paycheck to retirement or brokerage accounts so it’s not a decision you rethink every month.”
- Use financial products that let you keep more of your money: Lapin recommends using tax-advantaged accounts like a 401(k), IRA, or HSA to put more of your earnings to work for you — and make sure you contribute enough to your 401(k) to get any employer match.
- Focus on debt: High interest debt should be treated like an emergency. “Every dollar of interest you pay is an immediate, risk-free return,” he said.
- Beware of lifestyle inflation: Let your lifestyle lag behind any income growth. Lapin recommends putting a portion of each raise or bonus into savings and investments first.
- Keep investing simple and low-cost: “Broad index funds and consistent contributions outperform complex strategies that most people can’t maintain,” Lapine said.
The same discipline that helped you stay in the middle class can help you achieve the next level of success – building significant and sustainable wealth.
“Building wealth is rarely about a windfall or smart trading,” Lapine said. “It’s the quiet accumulation that happens when you push more of your income toward stocks, business or property ownership – and let time do the work.”
ground level
If you’re not building the wealth you want — even with a middle-class income — you may be stuck saving for wealth-building, letting lifestyle inflation creep in, or ignoring the hidden drains on your accounts. These habits didn’t appear overnight, but with patience and hard work, you can reverse them sooner than you might think.
This article is for informational purposes only and does not constitute financial advice. Investing involves risk, including possible loss of principal. Always consider your individual circumstances and consult a qualified financial advisor before making investment decisions.