This is one in a sporadic series of tips/ideas to how to stay in the middle-class (or HTSMC). Whether you consider yourself on the lower- or higher-end of the spectrum, you can probably find some useful tips to help you stay there and find save more for retirement even as wages stay stagnant.
Dear Average Middle-class person:
I’m sorry to tell you this but your preference for the finer things in life is in conflict with your actual income, if you hope to retire comfortably or buy a house someday.
I know, I know. You went to a good college and got a decent-paying job. If not for stagnant wages/being passed over for the promotion/salary freeze/etc.., you could own all the latest gadgets, buy organic all the time, and do at least one big trip a year.
You don’t even know how you got such expensive tastes. In the old days — 10, 20 years ago — the Middle-Class did not own tons of tech toys, ate happily at middle-brow restaurants, rarely traveled abroad, and did not have as much access to luxury goods in general. Now we’re exposed to the “good things” in life all the time. That’s not necessarily a bad thing. Why shouldn’t we enjoy well-made food or immerse ourselves in other cultures? Why shouldn’t we appreciate the fine design of an iPhone or Birkin handbag?
The problem is: your wages have most likely NOT kept up with your tastes. ‘
Luckily for you, you can still look richer than you are. At places like Target and Kohl’s, you can buy lower-priced versions of designer brands from Peter Som, Narciso Rodriguez, Missoni, Elie Tahari, Rock & Republic, and many more. You can also score second-hand versions of luxury goods via Craigslist, Ebay, or local Facebook groups. You can buy iPhones and other $500+ phones on an installment plan. You can lease a car (although I wouldn’t recommend that).
The hard part is Acceptance. Before you can save money, you have to admit that your budget is more Kohl’s than Nordstrom. Yes, you have to shop at Kohl’s (or the equivalent retailer in your area).
Once you have accepted this fact, you can get better at saving and spending wisely. More to come…