Yahoo Finance 5 Common Expenses That Won’t Go Away for the Middle Class
No matter how you cut it, if you’re part of the middle class, there are certain expenses you won’t be able to escape. And with sky-high inflation, theses costs are something to prepare for in the future.
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“Everything seems to be getting more expensive these days. Groceries, transportation, healthcare — you name it,” said Ashley Vincent, real estate investor and owner of Home Investors. “It’s like your money doesn’t stretch as far as it used to. And let’s not forget about saving for the future. Putting money away for retirement and emergencies is super important. That means stashing cash into things like 401(k)s or IRAs and having a rainy day fund for when life throws you a curveball, like unexpected medical bills or car troubles.”
Below are more common expenses that won’t go away for you anytime soon.
Lifestyle Creep
As an expert in helping rental property owners and house flippers get new tenants and buyers, Andy Kolodgie, owner of PropertyLeads, has seen how expenses wear folks in the middle class down.
“Instead of just looking at numbers, I see expenses as things that change with the times, markets, and how people act — even if we don’t talk about it much,” he said. “One thing we don’t discuss enough is lifestyle creep. See, as people do better at work, their pay goes up a little at a time. But their costs rise just as much if not more! They start spending more on homes, cars, and fancier groceries.”
Over many years, he said these small spending gains add up.
“It keeps folks feeling like they never have enough cash even when making more dough.”
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Housing
Finding a place to call home is a big deal for most middle-class families, said Angela Wang, owner of We Buy Houses 7.
“If you’re renting, you pay a fixed amount every month to your landlord, depending on things like the size, location and rental market,” she said. “Owning a house means dealing with a mortgage — a loan you took out to buy your dream home. You pay it off gradually, usually over 15 or 30 years, and there’s some interest involved. The monthly mortgage payment can change depending on factors like the house price, down payment, interest rate, and loan term. And don’t forget about property taxes and the occasional repairs that pop up!”
David Brillant, tax, trust and estate lawyer at Brillant Law, equally noted that housing — whether in the form of rent or mortgages — represents another significant and persistent expenditure.
“In my practice, I’ve advised clients on navigating Proposition 19, which had implications for property tax reassessment exclusions in California,” he explained. “This piece of legislation, among others, impacts the cost of housing and underscores the importance of understanding and planning for real estate-related expenses.”
Moreover, he said that estate planning often involves considerations around managing or transferring property ownership in the most tax-efficient manner possible, directly affecting one’s ability to cope with rising housing costs.
“Looking at rental prices is a good way to see middle-class costs, too,” Kolodgie said. “Sure, rents go up straight out. But demand for places with gyms and pools also nudges what rents should be. This pushes normal housing into the premium zone without us noticing.”
He said that websites renting homes short-term take long-stay places off the market.
“That makes rents higher and finding an apartment tougher than we may think.”
Commuting Costs
“How long it takes to get to your job also costs you more than we acknowledge,” Kolodgie said. “As housing stays cheaper further out, workers have to travel more. But the daily drive eats your money on gas or trains. Your car needs fixes more often too. Insurance gets costlier. Plus you lose precious hours stuck in traffic.”
“Altogether, commuting eats up serious cash we may not notice,” he said.
Wang agreed: “We all need to get from point A to point B, and that comes with costs. If you have a car, you’re looking at things like car payments — if you’re still paying it off — insurance, gas, regular maintenance, and license fees. And if you have more than one car in the family, those costs add up. If you use public transportation, you have to budget for bus, train, or subway tickets. And if you live in a city, you might also need to set aside some money for taxis or ride-sharing services like Uber or Lyft.”
Education
Experts equally noted that college is priceier than before.
“Education expenses aren’t limited to tuition fees,” said Marty Burbank, attorney and owner of OC Elder Law. “They extend to planning for a child or grandchild’s future in a way that protects family assets while ensuring educational goals are met. Leveraging tools like educational trusts and advising clients on the benefits of tax-advantaged accounts like 529 plans have been a significant part of my practice.”
These methods, according to Brillant, not only aim to alleviate the financial burden of education but also to inculcate a culture of strategic financial planning within families.
That said, spending on tutors, activities and test prep is rising fast too, Kolodgie said.
“This shows society’s push for the best schooling possible,” he explained. “But middle-class families strain under the financial load of giving kids every advantage to succeed. This burden is there but not discussed much.”
Healthcare Expenses
Higher healthcare expenses, especially in elder care, are another expense to consider, Burbank said.
“In advising on matters like long-term care planning and veterans’ benefits, the aim is to protect assets while ensuring quality care,” he noted. “Strategic planning around these areas can substantially mitigate financial pressures, allowing families to preserve their quality of life.”
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