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1. Thinking small

For the middle class, pinching pennies is often a habit.

“Many middle-class individuals focus on saving small amounts here and there, like cutting coupons or skipping lattes,” according to R.J. Weiss, a certified financial planner (CFP) and creator of the personal finance website The Ways to Wealth. “On the other hand, the wealthy prioritize the big picture, such as keeping fixed expenses low relative to their income and focusing on strategic asset allocation.”

If you've ever found yourself poring over your budget to find another few dollars to cut, you may want to rethink whether this is the best way to build wealth.

The reality is, there's only so much you can strip from your budget, and all these cuts become hard to sustain. Instead, focus on the big things, like how much you pay every month for your house or car. By keeping those costs down, you'll have more money to devote to investing and growing your nest egg.

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2. Relying on a single income stream

Counting on your paycheck as your only source of funds is another common habit — and it may not be the best approach.

"Middle-class people typically rely on a single source of income, such as one job," said Andrew Latham, a CFP and content director at financial comparison platform SuperMoney. "In contrast, wealthy individuals diversify their income streams through investments, side businesses, and passive income sources."

Relying on your job as your only way of making money is pretty limiting. For one thing, you can only work so much. For another, if you lose your job, you'll have to dip into your emergency savings and struggle until you find a new one.

Diversifying your income streams could increase your financial security and give you more peace of mind. You can do that by buying investments that produce income, such as dividend-paying stocks or real estate investment trusts (REITs).

3. Sticking to savings accounts

Putting money into a savings account and other safe investments is a good habit, but it's something the middle class does more of than the wealthy — sometimes to their detriment.

"Middle-class individuals typically focus on avoiding risks to safeguard their financial stability. This often means sticking to traditional savings accounts and conservative investments,"
said Justin Haywood, a CFP and president and co-founder of Haywood Wealth Management. "Wealthy individuals, on the other hand, tend to embrace calculated risks as a strategy to grow their wealth further."

Haywood explained that he has even met clients who kept their 401(k) in cash, missing out on tremendous potential to earn higher returns.

While it's important to have some money you can access easily, investing puts your money to work to grow your wealth. It's a habit every middle-class person should adopt if they want to become rich themselves.

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4. Using credit card debt to support their lifestyle

Reaching for credit cards isn't just something middle-class people do. Rich people use cards as well.

The difference is, middle-class people may use them to make purchases they can't afford and sometimes carry a balance, while wealthy people typically charge purchases to earn rewards and perks, but pay off their balance in full each month.

"Middle-class individuals tend to live above their means, using credit cards and loans to support their lifestyle, which can lead to debt," warned Latham.

With the average credit card interest rate coming in at 21.51%, according to the Federal Reserve, this is a habit that's crucial to break if you are serious about building wealth.

5. Paying yourself last

Finally, it's common for middle-class people to put saving and investing last. Wealthy people, on the other hand, often have automatic systems in place for growing their riches.

"Many middle-class people handle finances manually, leading to irregular savings and investments," Weiss said. "The thought process is, ‘I'll save when the money is left over.’ The wealthy automate their savings and investments to ensure consistency and take advantage of compound interest, which helps them accumulate wealth efficiently and removes the temptation to spend excess income."

The good news is it’s easy to set up automatic transfers of money to savings and retirement or brokerage accounts. You just need to prioritize these items in your budget.

You can ditch these middle-class habits today, even if you aren't rich. By doing so, you may be able to put yourself on the fast track to building wealth of your own.

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Christy Bieber Freelance Writer

Christy Bieber a freelance contributor to Moneywise, who has been writing professionally since 2008. She writes about everything related to money management and has been published by NY Post, Fox Business, USA Today, Forbes Advisor, Credible, Credit Karma, and more. She has a JD from UCLA School of Law and a BA in English Media and Communications from the University of Rochester.

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