5 Middle-Class Spending Habits That the Wealthy Avoid

Jakarta, CNBC Indonesia - Amidst the volatility of the global economic situation, the issue of financial planning has become increasingly relevant. Legendary investor Warren Buffett suggests that an individual’s financial condition is largely determined by the small daily decisions made when spending money. In the face of current economic pressures and the rising cost of living, Buffett’s advice serves as a reminder of the importance of distinguishing between needs and wants. Rather than chasing a more luxurious lifestyle, Buffett encourages the public to focus on maintaining long-term financial health.

Here are five favourite middle-class spending habits that the wealthy avoid:

1. Consumer Debt

Many middle-class citizens are burdened by debt, such as mortgages, car loans, and student loans. Unlike the wealthy, who use debt to acquire productive assets like property, the middle class frequently uses credit to purchase consumer goods. “Expensive vehicles, luxury goods, or non-essential needs are often purchased through debt,” says financial expert Jacquesdu Toit.

2. The Latest Gadgets

The middle class frequently purchases non-luxury branded products, such as gadgets, clothing, or mid-range household appliances. “Sometimes they get caught up in the desire to always follow trends, even if it means incurring debt,” says Whaley.

3. App Subscriptions

Many middle-class individuals spend hundreds of thousands, or even millions, of rupiah per month on various entertainment subscriptions, ranging from streaming platforms to premium fees for editing and dating applications. Such expenditures can trap them in the middle class indefinitely, as millionaires prioritise their funds for investment.

4. Expensive Cars with Long Installment Plans

According to money coach Mary Vallieu, many middle-class families purchase cars priced between Rp800 million and Rp1 billion with seven or eight-year installment plans. In contrast, the wealthy typically purchase cars in cash, while the poor generally use second-hand cars or family inheritances.

5. Expensive Kitchenware

The middle class tends to purchase upgraded versions of basic necessities—such as expensive mobile phones and premium kitchen appliances. “They do not always choose the best items, but they still want more features,” says Jake Claver from Digital Ascension Group.

While the middle class can enjoy a more comfortable lifestyle, experts suggest that their spending should remain directed towards creating long-term financial security. “One of the keys to building wealth is aligning spending with long-term value and benefits,” says Toit. He emphasises the importance of investing, building businesses, and automating financial management. “The goal is not merely to have an income, but to build a sustainable lifestyle that allows for growth without excessive financial pressure,” he added.