Credit Repair and the Middle Class: What You Should Know - CreditRepaircomThe face of American culture is changing. A report published by the New York Times delivered the grim news that the American middle class is no longer the world’s wealthiest, falling behind Canada for the first time in history. The median income for a family of four—$74,000—remains unchanged since 2000 while the Canadian median income rose by 20 percent between 2000 and 2010. In the face of such news, what is the solution? What can you do to maintain your middle class standing?

  • Get an education. A study conducted by the American Community Survey revealed that people with a bachelor’s degree earn an average of $1 million more than high school graduates during their lifetimes. Why not take advantage of an extra $23,000 a year? Improve your earning potential by going back to school. Research the market in your area to find a career that is both interesting and lucrative. Look for grants and scholarships along the way to help you secure advancement at an affordable price. It’s never too late to learn something new.
  • Find a better job. Whether you’re using a newly-minted degree or have years of professional experience, finding a better job will improve your life in several ways:
    • Income. The obvious bonus is the pay bump. Extra income is useful on every level. Take the opportunity to cash in on your skills.
    • Savings. While you’re cashing in, don’t forget to save. Use your money to invest in an employer 401(k) plan, especially if they offer to match a portion of your contributions. Keep the rest in a liquid account to provide necessary access.
    • Healthcare. Medical bills are arguably the most difficult expense for the American middle class and a common reason for credit repair. Find an employer who offers a competitive healthcare plan with a low deductible. Good coverage is an invaluable resource.
    • Perks. Many large companies provide perks to keep their employees happy, from subsidized childcare and gym memberships to stock options and discounted home services. Reducing your bottom line is the best way to maintain your middle class status. Find an employer who’s willing to help.
  • Change your habits. Americans may not have the easiest lives, but we also waste money—a lot of it. Entertainment, dining out, clothing, drinking and smoking are just a few of the categories where we could afford to cut back. Take a second look at your habits and curb your spending. Saving as little as 15 percent a month could drastically improve your quality of life. Living with less may be tough, but the rewards are well worth the sacrifice. Prioritize stability over spending.
  • Ditch the fancy car. The average person spends more than $3,200 a year on car payments, or roughly $266 a month. While that price won’t buy you a BMW, it’s not exactly frugal, either. Consider buying a pre-owned model with a good warranty and low monthly payment. Use your savings to build an emergency fund to strengthen your middle class status.
  • Plan, plan, plan. The average middle class retiree cannot afford to enjoy their golden years. Why? Often, it’s a simple lack of planning. It may sound cliché, but the future starts now. Investments require attention and time to develop into long-lasting resources. Find a financial planner and begin mapping your goals as soon as possible. Middle class is more than a frame of mind. Don’t set yourself up for failure.

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