Who Wastes More of Their Money — the Rich, the Poor or the Middle Class?

Cindy Lamothe

We’re all guilty of wasting our money every once in a while. If you’ve ever wondered who the guiltiest of us are — according to our socioeconomic class — it might not be so cut and dry.

Some experts say we shouldn’t generalize.

“Factually speaking, nobody ‘wastes money.’ Or at least, does so purposely,” said Jon Molek, CEO and founder of Best Offer REI.

“We can talk about spending habits, which can vary greatly in each group. While some people spend excessively, others are financially savvy and spend only when it’s needed,” Molek said. “However, if I had to choose one, I’d say generally, statistically and logically, rich people have more disposable income to potentially waste.”

“And it makes a lot of sense, as they have more resources and a propensity to spend more than necessary, which may result in wasting money knowingly or unknowingly,” Molek said. “Other groups of people, like the poor or middle class, may not have this liberty, however, this can be true for them as well.”

While there isn’t a consensus on which group takes the cake in terms of overspending, more experts weigh in on who they deem to be the biggest money wasters.

Also here are eight things to stop wasting your money on.

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It’s Not Necessarily About Income Level

According to Mark Damsgaard, founder of Global Residence Index, the amount of money wasted isn’t necessarily determined by whether someone is rich, poor or middle-class.

“I believe that it’s more about individual habits, priorities and financial literacy,” he said. “It’s a mixed bag.”

He also notes that the propensity to waste money is more influenced by the above factors rather than income level. “Some people with lower incomes may struggle to make ends meet, so you might think that they waste less money.”

“But if you look closer, financial challenges can sometimes result in inefficient spending habits, such as paying higher interest rates on loans or buying low-quality goods that need frequent replacement,” Damsgaard said. “That’s wasting money if you look at it long term.”

He says that the middle class, on the other hand, often faces competing financial priorities, such as mortgage payments, education expenses and saving for retirement.

“While they may have more disposable income than those with lower incomes, they might also succumb to lifestyle inflation or consumer debt, which can lead to wasteful spending if not managed carefully,” he said. “Wealthier individuals may have more resources at their disposal, allowing them to afford luxuries and indulgences that others can’t.”

However, he notes that this doesn’t mean they waste more money.  “Some wealthy individuals are actually frugal and prioritize long-term financial goals, while others may engage in extravagant spending or investment mistakes.”

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Pressure of Social Status Influences Money-Wasting Habits

“In my experience, I have found that the middle class tends to waste more of their money compared to the rich or the poor,” said Michael Benoit, owner and founder of ContractorBond.

He says this is because they often feel pressure to maintain a certain lifestyle and keep up with societal expectations of social status, such as expensive cars and designer clothing.

“For example, a middle-class family may feel the need to purchase a bigger house in an expensive neighborhood, even if it means stretching their budget.”

Whereas, he says a rich family may have the financial means to purchase such a house without sacrificing their budget for other important expenses.

The Middle Class Often Falls Prey to Marketing Ploys

“I have seen that middle-class individuals are more likely to fall prey to marketing tactics and sales gimmicks such as ‘buy one, get one free’ or ‘limited-time offers,'” Benoit said. “This leads them to purchase the latest gadgets or luxury items, even if it means paying a premium price.”

“In my observations, the poor have limited financial resources and are more likely to prioritize necessary expenses over discretionary spending,” Benoit said. “They also tend to be more budget-conscious and seek out bargains or discounts to stretch their money further.”

Overall, Middle-Class Individuals Are More Likely to Struggle With Overspending

“As someone who deals with financial matters daily, I have seen firsthand how different income groups manage their money,” said Andrew Pickett, lead trial attorney and founder at Andrew Pickett Law. “In my experience, the middle class wastes more of their hard-earned money.”

He says one might assume that the rich are the biggest spenders, splurging on luxury items and exotic vacations without a second thought, however, this is not always the case.

“The wealthy are often more cautious with their spending and have a team of financial advisors to help them make smart investments,” he said.

On the other hand, Pickett says people in poverty are forced to live on a tight budget and prioritize necessary expenses such as food, shelter and healthcare. “They rarely have the luxury of overspending on discretionary items.”

“The middle class falls somewhere in between these two groups. They have enough income to cover their basic needs but also have access to credit and loans,” he said, “which can lead to overspending on non-essential items such as fancy cars, expensive vacations and unnecessary gadgets.”

“Some of my clients from the middle class have found themselves in financial trouble due to overspending and poor budgeting habits,” Pickett said.

With that in mind, he says it’s important to note that this is only sometimes the case for every individual or family in these income groups. “However, as a general trend, I have seen the middle class struggle with managing their money more than the rich or poor.”

As a rule of thumb, Pickett emphasizes that it is not about how much money one has but how one manages and spends it.

“As the saying goes, ‘It’s not how much money you make, but how much money you keep,'” he said. “So my advice would be for everyone, regardless of income level, to prioritize budgeting and smart spending to avoid wasting their hard-earned money.”

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This article originally appeared on GOBankingRates.com: Who Wastes More of Their Money — the Rich, the Poor or the Middle Class?

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