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Welcome to Money Talk for Real, the podcast where I talk about making money, spending money, and everything in between. And in this episode, I'm going to talk about the middle class trap. You've probably heard about it before, but I want to kind of dive deeper into it and maybe explain it a little bit. And here's kind of what that means it's where you have a decent job, you're making decent money, but you still kind of feel stuck financially. Again, you're not broke, you're fine, so to speak, but you're not really getting ahead any. And that's where, you know, you keep working hard, but progress just feels kind of slow or non-existent. And that is what a lot of people call, again, the middle class trap. Now, this isn't about the income alone. I've talked about that before. Your finances are not just about how much money you can make, but it's also how less amount of money, the least amount of money that you can spend. So it again, it combines the income and the expenses. It's about how the money flows, how the money gets used. And this is why some people just get stuck in this position for years, because they feel like, okay, you know, I'm making good money. I have a little extra, you know, money in my pocket, so to speak. So let me spend it. I can afford that car payment. I can afford that new boat. I can afford that vacation. And it just kind of starts to feel normal, but it's definitely not ideal. And the thing is, it's not that you're doing anything that's necessarily crazy wrong. It's just that the system that you're in keeps you stuck. The biggest thing, and the first point that I would talk about, is the lifestyle inflation. This is where you make more, but you also spend more. And here's an example of what that could look like. Maybe you get a raise, and so then you go get a better car, or you get a raise, you get a better house. Again, you just you get a raise, so it's more spending. You think, oh, we have the money now, let's go spend it. And this happens because it almost feels deserved. You feel, okay, well, I've earned this. I should, you know, treat yourself like the reward mentality. You you think, okay, well, I've I've worked hard, I've busted my tail at work, and now I'm going to reward myself with a new car or a new boat or a new house or whatever it is, right? Um, the issue though, and and part of that is social expectations. People think, oh, well, that you know, I know how much that guy makes. He should be driving a better car. And then you try to live up to that. You think, oh, yeah, I do need to be driving this because it's, you know, I can't live below what I'm supposed to look like. You absolutely can. And this is what leads to the trap because you're never going to make real progress. You ever get a raise and just don't feel any different? That's what I'm talking about. I have been there personally. Um, I've gotten significant raises over the years, and somehow I still feel the same as I did before. Your income goes up, but your life somehow got more expensive too. And yes, inflation is real, economical inflation, but not necessarily the entire reasoning behind that. Um, NBC News did an article and they wanted they uh about the people that are donating plasma. And here's a something that I found a little bit interesting. One of the managers at the Plasma Center explained that people are using they're donating plasma for something, quote, a little extra in their life. I want you to listen to this clip here.

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People will come in and use this money to supplement uh their income. For a lot of people, it's their lifeline to afford that little thing that's extra.

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That little thing that's extra. You don't need if if you're at the point of donating plasma, yes, you could do it as a side hustle. Nothing wrong with that. But it's also, you know, you're uh maybe just watch your spending a little bit. Um, I watched the full article, and I can tell you that most of those people appeared to have been in a decent situation financially if they would have watched their spending. Everything nowadays is just built around payments, monthly payment mindset, right? And that's gonna keep you trapped in the middle class. And an example would be car payments. That you I beat that horse to death. That's that the car payments are a big one. Some people finance furniture, they finance cell phones. And what that could look like is you're not buying, you don't feel like you're buying a $2,000 cell phone. You feel like you're buying a $49.99 monthly payment where the cost of the phone is built in. Another thing could be subscriptions. I made an episode, I made a podcast episode about that. And honestly, nowadays everything is built around payments. How many times have you gone to an online store and you can check out with Klarna or you can check out with a firm? Buy now, pay later tacos, right? You can buy anything and pay for it later. And this makes things feel affordable. But it also locks up your future income, which can be dangerous and keep you in the middle class. It's $300 here, it's $200 there. Suddenly your paycheck's already spent. Before your money even hits your account, it's gone. Another clip from NBC News here talking about uh they that one of their interviewees was essentially complaining about the middle class.

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We always heard it the middle class was disappearing, but really, really quickly. The rich are getting richer and the rest of us are sinking quickly.

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Okay, now I'm not saying she's legitimately not struggling financially. She very well could be, but that's just the mindset of a broke person. Well, no one's coming to help me. I can't get, I can't get ahead. I can't get ahead. Yes, you can. Control your spending. Please stop spending everything you make. If there's no gap, no margin, then there's going to be no progress. This typically is you get your paycheck, then you spend on your bills, and then you have nothing left. There's no system. This is kind of just normal behavior. And I'm not saying it's your fault. Maybe you don't know any different. And that's kind of the point, a little bit of me doing this podcast is to try to help people understand money and talk about money. Everybody's always so uncomfortable talking about money. Please talk about your money. Talk about it with me. I'll be anonymous, I'll keep you anonymous, but let's talk about your money. Let me help you talk through some of this and see what we can do to trim the fat and help you get ahead a little bit and relieve some of that stress in your life. If you do your paycheck, if you get your paycheck, you pay your bills and you have nothing left, what I'm talking about. You have no system. Um, there's no savings, of course. There's no investing, heaven forbid. And ultimately, there's no flexibility. If there's no gap between what you make and what you spend, then you are, by definition, stuck. You are completely stuck in that trap that I'm talking about, the theme of this episode, the middle class trap that you're stuck in. Now let's talk about the debt, because obviously debt will keep you stuck and bring on a lot of stress. I've talked about that with cars, furniture, subscriptions, et cetera. But debt is not just a tool. It becomes a cycle. Everybody says debt's a tool. No, it's not. It is, you know, it can be, but for the majority of people, it's not a tool. It becomes a cycle. You finance things instead of saving money because that's the easy way out. That's the easy, quick little boom, credit card, let's finance it. Instead of being patient, taking time, saving the money, your money, because when you go into debt, you're spending someone else's money. And that sounds cool, but nothing's free in life. You're gonna owe them back with interest. You got to pay them for them allowing you to use their money. People rely on debt because of the instant gratification. Again, that's the easy kind of win. And frankly, they just don't have savings. So they rely on debt. You're always paying for stuff that happened in the past. You bought that car eight years ago and you're still paying on it. Or you bought that furniture three years ago, still paying on it. You're paying for stuff in the past. Now, your future income is with this method is already committed to your past decisions. Again, if you're three years into a five-year payment, then you know in two years from now, your in that income is still going to something that you decided on three years ago. Social pressure. We've talked about that a little bit a minute ago. The normalization, the social pressure, the comparison lifestyle, all of it kind of ties into one. Everyone around you is doing the same thing. They're all, quote, normal because they're broke and in debt. Friends, coworkers, people on social media, the list goes on. And so you think, oh, well, my mom and dad are in debt, so this is just how the world works. This is just how the world turns because all my coworkers are in the same boat. They have monthly payments. I should too. No big deal. Well, if you want to live like that, you can. But I prefer a little bit of normalcy of not being in debt, right? It is very dangerous because when everyone's in the same boat, it does feel normal. We all suffer together, so to speak, right? It feels normal because everyone else is stuck in it too. But you can be the weirdo, so to speak. You don't have to be, quote, normal and broke. Um, the next thing I want to mention is like people waiting on more money, because again, they think that the income, the money coming in is the only way to fix things, even though it's not, it can be handled as well with the money going out. But they think income will fix everything. They think, okay, well, when I make more, I'll save. But then their habits don't really change. And the habit is the thing. Whether you're spending a dollar or a thousand dollars, it's still the habit of spending. So whether you're making a hundred grand a year, ten thousand dollars a year, or ten million dollars a year, the habit is the same. More money doesn't fix the problem. Honestly, it usually just makes it bigger because when you get more money, you have your bigger, you know, you're playing with bigger numbers, bigger dollars. So it makes your problems bigger as well. Now, let's talk about how to break out of this. I don't want to be totally just negative. I do want to talk about an actual plan. Let's shift from a problem to a solution. Number one, create the gap that I'm talking about. Spend less than you make, even if it's small at first. Pennies add up to dollars over time. I can help you with this. I can help walk through your personal financial situation. You can send me all of your info at moneytalkforreal.com. Click on the link that says debt help. You can record and just talk and blabber it all out to me. I'll play it on the show. I'll talk about it. Or if you don't feel comfortable doing that, you can type in a form on that website and send me all of your information. You can remain anonymous. But we need to we need to spend less than you make, first of all. Second of all, stop living on freaking monthly payments. That is just you're chain bound to those payments. You're never it, it's just a it's like a bag of bricks that you're picking up and carrying with you every single day because you owe someone money. If you can stop living on monthly payments, then you reduced reduce your fixed obligations. Next thing, build savings first. Okay. We do we need to pay the debt down, but you need to have a little bit of a buffer. The buffer is going to give you a little bit of flexibility, okay? This is what some would call your emergency fund, but just a little bit of savings. Something to where if you have an old crap moment, you don't have to go into even more debt to take care of that old crap moment. Next, I would say to control your lifestyle growth. Again, we talked about lifestyle inflation. Be disciplined. You have to be disciplined with your money if you ever want to get out of the middle class trap. Don't upgrade everything with your income. Lock in your expenses before you ever get the income increase. Last, I would say just be intentional with your money. You control it, don't let it control you. If you don't know where your money is going right now, then you are have no control over it. You need to spend money where it matters and cut out where it does not. And I've talked to other shows about how to cut out where it does not matter and things that you can cut out that probably don't matter as much as you think they do. People just get emotional with stuff and they think it matters more than what it does. You cannot escape this middle class trap by simply making more. You escape it by changing how you use money, which includes how you're spending the money. Again, this is not one issue. It's a pattern, it's a habit. The trap maybe not even will show itself obviously. You might not, it might not even, it's not like it's gonna slap you in the face like, oh, you're in the middle class trap now. It's just a silent little thing. It's not super obvious because again, it feels like normal life. It feels normal. You're surrounded by people that are in the same boat as you, and so it feels normal. Anyways, you're not alone. This is common. I'm not saying it's a good thing, but it is common. But the small changes can create a real movement. Again, the goal isn't to escape the middle class necessarily. I mean, that's a great goal to make, but it's simply to stop being stuck and stop being in the middle class trap. I want to reiterate, I can help you walk through your numbers. You can remain anonymous. Please send me your information or send me a voicemail to discuss why you're feeling stuck. You can do that on the website money talkforreal.com slash debt help. Money talkforreal.com slash D E B T H E L P. Thank you so much for listening. I'll catch you on the next episode. This is Money Talk For Real.