Escaping Alcatraz: How Easy Is It to Leave the Lower Middle Class

Prison Break
Prison Break

Alcatraz is, of course, most commonly associated with the legendary federal prison, located on an island just off the coast of San Francisco. Alcatraz is infamous because it’s prisoners couldn’t escape. Although three men did successfully flee in 1962, it’s believed that these individuals did not make it to land alive.

See Also: The Blueprint for Financial Success

As you can imagine, being in prison, especially one located on an island is enough to make anyone feel hopeless. And although most of us are not stuck in a prison, on an island, we still feel the same lonliness and lack of hope. 

Sure, these individuals are not behind bars and civilization is not across shark-infested waters, but they’re stuck in a financial prison. No matter how hard they work, they can’t seem to break free from the vicious cycle. Their current lifestyles are dictated by dollar signs and although money can’t buy happiness, these individuals are overly stressed and worried about their futures.

These individuals are those that are stuck in the lower-middle-class limbo. As you can imagine by the Alcatraz metaphor, it’s not an easy transition, breaking free from these financial constraints. With that being said, it is most certainly possible. You can leave the lower middle class, working towards a more stable and worry-free future. All you need to do is assess and then take action.

What’s Lower-Middle-Class?

When discussing developed nations, the middle class is sub-divided into the greater and lower middle class. In more recent years, the number of those identifying as being upper-middle-class are diminishing while those that identify as lower-middle-class are on the rise. Although individuals within this class may still hold respectable positions, their household income will range between approximately $35,000 to $75,000. 

Although $50,000 may seem like more than enough to stay afloat, it’s tough. If you’re paying $2000 a month for your mortgage and home owner-related bills, that’s nearly half of your annual income accounted for. That doesn’t include transportation, food, clothing, education, or any other expense we encounter on a day-to-day basis.

As you can imagine, this is causing the average lower-middle-class family to resort to credit, burying themselves in debt. So, what do you do about it? Do you accept this way of life, continually struggling, as you experience abnormally high levels of stress?

The short answer is no, no you don’t. Although you feel as though you’ve lost control, you can regain financial stability as you continuously work towards your goals. Be practical and begin setting your financial freedom into motion. Money isn’t everything, but if you’re not in control of your finances, you’re slowly losing control over your life as a whole. Here are a few practical steps to make your dreams a reality.

Reassess to Make a Plan

The very first thing you’ll need to do is take a look at what is holding you back. Without breaking out the books and really analyzing the numbers, you will be in the dark regarding your finances. This is why you need to focus on what is incoming in terms of your income; and what is outgoing in terms of your expenses.

Your fixed expenses are those that you cannot change, such as your mortgage or car payments. Your variable expenses, however, are those that you do have more control over. Looking back at your last twelves credit card statements, do you notice that you’ve spent a total of $500 on getting your nails done throughout the course of the year?

If you’re worried about having enough food in the house, you can see where the problems may lie. Getting your nails done seems to be a luxury these days and if you want to maintain that type of lifestyle, you’re going to need to increase the amount of incoming money, which is something you can do. For now, you may need to reduce your current standard of living in order to get ahead. Get into the mentality, save more, spend less.

If you can’t put anything away just yet, make sure you’re not spending money that you don’t have. Don’t continuously put purchases on credit that aren’t essential to your day-to-day needs. If you want to live a comfortable life without the worry you’re currently experiencing, you’ll need to make changes.

Will this course of action require hard work and patience? The answer is, of course, yes, as nothing comes easy. The work you put in, however, will most certainly match the rewards. This brings us back to how challenging it is to escape the lower middle class and although everything appears overly daunting now, as you set goals and begin to achieve those goals, you’ll grow more confident and hopeful.

Remember, you’re ahead of many others, who have a lot less options regarding their future. By taking the appropriate measures and working towards some new goals, you can make the leap, feeling more relaxed in terms of your financial state. To recap, your first task is to stop spending money you don’t have. Start truly differentiating between what your needs and wants are, this is a crucial realization which you’ll need to make.

Focus On What You Have

You may be stressed about money, but a large majority of the middle class have more than they realize. Middle class wealth is generally tied up in retirement funds and within home ownership. We’re all so focused on what everyone else says to do with our money, that we lose sight that it’s our money to do with as we please.

Now, that doesn’t mean remortgage your house in order to take that European cruise you’ve been dreaming about. Instead, educate yourself and learn how you can turn pre-existing assets into income. You need to take charge and regain control over your money.

Once you view your home as an asset, just as someone would their bonds or stocks, you begin to see that you do have options. This is something that can be discussed with a financial adviser in greater detail. You should also inquire about potential investment options which make sense for you and your family.

Take Advantage of Potential Business Opportunities

Those who have boatloads of cash understand how to make their money work for them. Currently, there are more opportunities out there than people who know what to do with them. If you plan effectively, you can be your own boss, dictating the amount of revenue you personally make.

For those who have an entrepreneurial spirit, don’t be shy to get out there. You can work on side projects at night and on the weekends, outside of your regular work hours. If you have an idea, don’t be afraid to take a strategic risk.

Meaning, there’s no reward without a little risk, just be sure you’re approaching a potential business idea wisely. The last thing you want is to sink a bunch of money into an idea that fails. Take the proper steps, seek advice, and work hard. Once you have some money behind you, you can take the next step, continually working towards ultimate financial freedom.

See Also: 10 Key Steps to Your Financial Planning Process as an Entrepreneur

This bumpy ride we call life most certainly has its ups and downs, especially when it comes to finances. What you need to do, is recognize that you are still in control. There are steps you can take to better your future and acknowledging that you no longer need to be stuck in the lower middle-class trap is the most important. Don’t be shy to regain control and take action, making more experienced financial decisions, as you strive for a better future.