7 Things the Lower Middle Class Can’t Afford Anymore
As the cost of everyday items continues to rise, you might be noticing that you are priced out of purchases your parents and previous generations were able to make at your life stage. Over the years this has become increasingly challenging for those who fall into the category of lower middle class. Inflation and stagnant wages have created an environment where many purchases are now out of reach for this demographic.
Here’s a look at some big-ticket purchases that are often unattainable for many lower-middle-class Americans in 2024.
Learn Now: Billionaires vs. the Middle Class: Who Pays More in Taxes?
Read Next: 5 Unusual Ways To Make Extra Money (That Actually Work)
Owning a Home
For decades, owning a home was considered the epitome of the American dream and the ultimate symbol of success. However, recent price hikes have caused this dream to be more elusive than ever for the lower middle class. CNN puts the median home price for previously owned homes at $407,600 as of April 2024 — a 5.7% increase from the previous year.
“This surge puts upward pressure on mortgage payments and forces some families out of the housing market entirely,” said Matthew R. Silverhardt, CFP and private wealth advisor at Claire Reid Wealth Advisory.
Find Out: Net Worth for US Families: How To Tell If You’re Poor, Middle Class, Upper Middle Class or Rich
Owning a Car
The cost of getting around your city has also risen significantly. Car ownership has transformed into a luxury for many in the lower middle class, with some having no other option than to lease a vehicle due to the rise in auto prices. This hardship is compounded by the fact that many American cities lack comprehensive public transit.
“Car ownership, a large aspect of American life, is becoming elusive for the middle class,” Silverhardt said. “With the average cost of a new car hitting $47,000 and disruptions in the supply chain causing a spike in used car prices, coupled with higher gas prices, the financial burden of maintaining personal transportation is real.”
Going On Vacation
Speaking of transportation, going on vacation has also become a distant dream for the lower middle class. Even a modest vacation can easily run into the thousands, and when essential costs are already stretching budgets thin, vacations are on the chopping block.
“The cost of travel and accommodations has seen a notable increase, making vacations less affordable,” said Taylor Kovar, CFP and founder at Kovar Wealth Management. “Airfare and hotel prices have risen due to various factors, including increased demand and higher operational costs. The overall increase makes it challenging for the lower middle class to budget for holidays.”
While budget-conscious travel is still possible, extravagant vacations are likely a thing of the past for this demographic.
Gym Memberships
Those in the lower middle class are also facing setbacks when it comes to prioritizing their health and wellness.
While once considered a basic necessity and an affordable way to stay active, gym membership has become a luxury for this demographic. The average cost of membership increased by 14% from 2019 to 2022, standing at $128 per month as of August 2022 (and prices have likely increased since then). This price hike poses a significant obstacle for middle-class individuals looking to break a sweat without breaking the bank.
Education and Child Care
“The costs associated with education and child care have been steadily increasing, making it more challenging for the lower middle class to afford quality education for their children or child care services,” Kovar said. “This is particularly impactful as these costs often take up a significant portion of the household budget.”
This is keeping many in the lower middle class from affording college for themselves or their children. The rising costs of child care are also affecting families’ capacity to work and earn an income while ensuring proper care for their children.
Basic Necessities
As inflation has made everyday expenses increasingly unaffordable for the lower middle class, stocking up on essentials is more challenging than ever with a limited disposable income.
“Groceries, in particular, saw a staggering 12.8% year-over-year increase in cost [from 2022 to 2023], compelling families to make difficult choices such as cutting back on essentials or compromising on nutritional value,” Silverhardt said.
Healthcare
Despite various healthcare reforms, the cost of healthcare continues to be a significant burden for the lower middle class. This includes not just insurance premiums, but also out-of-pocket costs for medical care and prescriptions.
As of last year, “The 2023 Milliman Medical Index reports that the cost for a hypothetical family of four covered by a PPO plan Management LLC through their employer is $31,065,” said Jeff Rose, CFP and founder at Alliance Wealth. “This reflects a growth of about 5.6% from 2022. Factors contributing to this increase include staffing shortages and supply chain challenges. This rise in healthcare expenses is significant and adds to the financial strain on families, particularly those in the lower middle class.”
More From GOBankingRates
Barbara Corcoran: 3 Cities To Invest in Real Estate Now Before Prices Skyrocket
This is The Single Most Overlooked Tool for Becoming Debt-Free
This article originally appeared on GOBankingRates.com: 7 Things the Lower Middle Class Can’t Afford Anymore
