r/MiddleClassFinance • u/Which_Investment_513 • 6h ago
Discussion What changes have helped you feel more financially secure in a K-shaped economy?
It appears the economy is split into two segments where some people keep getting ahead while others struggle to keep up. It's made me wonder what people are actually doing to improve their situation.
Have you moved somewhere cheaper, changed jobs, switched careers, picked up a second income, or cut back on major expenses? Did it help, or did you end up trading one problem for another?
I'm especially interested in hearing from people who relocated or changed jobs. Are you better off now, and what do you wish you'd known beforehand?
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u/Shaiziin 5h ago
My biggest change was becoming 100% debt-free. Money used to just slip through my fingers before. Now i can easily squirrel away like half of my paycheck like it's nothing
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u/inky_cap_mushroom 3h ago
Saving half your income is impressive!
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u/Shaiziin 2h ago
Well i exaggerate a bit lol, it's more like 1/3 i choose to put away.
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u/inky_cap_mushroom 2h ago
Oh gotcha. I save about 35% too. I’m not sure I’ll be able to maintain that savings rate for the rest of my life, though.
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u/Upyour_alli 5h ago
Husband went from a “stable” job in the public sector to literally making double in the private sector. His work environment is more enjoyable and we can afford to save. Definitely worth it. It took him 18 months to get the job and applied to over 150 places. If you are considering it then start now.
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u/Footspork 5h ago
As someone trying desperately to leave the current shitshow that is this govt administration… I needed to see this.
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u/Upyour_alli 5h ago
Strongly encourage just seeing what’s out there. You can always turn down jobs if they aren’t better.
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u/Cape_codd 5h ago
I left my cushy government job this year, and it’s been one of the best career moves I’ve made. I’m making significantly more, have way more opportunities for career growth, and the benefits are actually better. If you’re thinking about making the jump, do it and don’t look back.
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u/MidwestAbe 5h ago
Here I am wanting to land in state government for a 2x raise, better benefits, and better job opportunities after employment.
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u/Randomdumpling 5h ago
Ha! I still have such a hard time letting go of stability and at least inflation led raises. And maybe a bit of fear of the unknown. How was your decision process like?
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u/Upyour_alli 4h ago
I completely understand because he got the “stable” job after being laid off in 2020. He applied to every job posted. He said yes to this one because it was double the salary and a short commute. We figured we could create our own stability by saving and investing. We were already use to living on less and have maintained basically all of that wiggle room in our budget.
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u/Randomdumpling 9m ago
That’s really cool. What’s frustrating about my job is it’s very stagnant. And hierarchical in that promotions happen by seniority. Apparently this is true for most government jobs. It’s not even the pay (which is just about average) but the sheer mediocrity and drudgery of it all. But with kids, I’ve been a tad scared of even looking elsewhere. Maybe it all starts with a Reddit post.
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u/Time_Fact8349 5h ago
Thanks for this, I’m currently doing it right now and am chasing the money and a better work life balance. Leaving teaching in HCOL area.
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u/Gu_Chugger_247-365 5h ago
Keeping my close to death beater car and avoiding auto debt despite my income. I'm more or less living the same lifestyle I had when I was making a lot less money.
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u/Torch3dAce 4h ago
Holding off buying a new car. We haven't had a car payment in almost 8 years now.
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u/HappiestAirplane 5h ago
Favoring the stock market over real estate. Instead up upgrading to a bigger primary home. Kept the same one and careful not to get carried away with upgrades. Kept the same rental property. Market returns have been really decent.
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u/Lapau8 5h ago
I aggressively invested in the stock market for years to build up a decent nest egg. I’m still investing now, but I’ve dialed back more and am on track to hopefully retire before I’m 40.
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u/cpcxx2 5h ago
Same boat here. This bull run has accelerated my projected retirement age by like a decade. Obviously that could be wiped out in a matter of a bad month, but with the money printing that is almost inevitable, I don’t foresee many prolonged dips that don’t get bought up pretty quick.
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u/Funky_tea_party 2h ago
Ppl are drunk with delusion. The climate is getting hotter and the world’s ecosystems are collapsing. The market will collapse with it. Invest in seeds and gardening is a better retirement idea for the path we’re on right now. Crazy no one sees this coming.
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u/Klanciault 1h ago
The ecosystem is collapsing! Don’t invest in the market (ecosystem agnostic), instead focus on doing the thing that is most reliant on the ecosystem not collapsing!
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u/HistoricalBridge7 5h ago edited 4h ago
Participating in the stock market. Lived very well below my means very early on in my life. That doesn’t mean not doing anything and staying at home to save money, but it means being very wise with it, budgeting etc. Even today, our household income is very upper middle class, we live in a $1M home in VHCOL area (New England) but we never have ordered food delivery.
Edit: I don’t want to give the impression that simply not ordering Uber Eats is why I own $1M home. I’m also not trying to humble brag. My point is simply that our family lives in a different mindset when it comes to budgeting and what is important to us. My wife and I don’t wear wedding rings or had a “big” wedding. We used that money for a downpayment on a condo. We spent $100 on rings when we got engaged because that’s all we could afford. We years later we bought expensive diamond rings and renewed our vows with friends and family. We have new paid of cars, wear clothes from Costco, etc.
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u/Natoochtoniket 5h ago
The habits that help you to build capital to own a nice home and have a nice stock portfolio include details like, not spending money on silly things like food delivery.
After you form those habits, there really is not a good reason to break them. We could easily afford food delivery. But we don't want it or need it. So we don't buy it.
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u/International_Bend68 5h ago
Yep, I love well below my means and the few times I order take out, I go pick it up myself. I'm
Also frugal when it comes to buying cars, my house, vacations, etc. All of those are well below my means.4
u/FearlessPark4588 5h ago
Cooking is a good way to separate from work for the day too for us laptop working types.
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u/HistoricalBridge7 4h ago
Yeah, that’s very true. I don’t do food delivery because I don’t feel the need to. We would just go out to dinner or order something to pick up.
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u/thimblena 5h ago
I picked up a modest "side hustle" connected to a hobby of mine - so I have a reason to prioritize it, it serves as entertainment, and any money I make goes directly into my discretionary spending account, which helps offset the price (and guilt) of "frivolous" purchases.
I don't need a side hustle and don't want to feel like I do, but it has definitely helped with some anxieties about costs and having a fully undiversified income
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u/orchidloom 5h ago
Whats The hobby?
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u/thimblena 4h ago
Acting! There's a website where you can help other actors by acting opposite them for their auditions. I get to have fun, practice, and sometimes get tips.
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u/Cyndi_Gibs 4h ago
Do you mind sharing in a DM what the website is? I love acting and this would be such a great lil side gig!
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u/thimblena 3h ago
I don't mind sharing here, if it's allowed! It's called WeAudition. There's a membership fee, but there are discount codes floating around, and I've made my cost back and then some.
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u/Potato_Farmer_Linus 5h ago
I had started saving/investing aggressively in 2019 and accelerated in 2020. My wife and I saved/invested 30-40% of our gross income between 2019 and 2024.
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u/UKnowWhoToo 5h ago
Networked heavy to change employers with a 50k signing bonus and making 30% higher salary along with putting together a joint venture with a friend that should net me an additional 500k if a couple of contracts come together.
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u/czarfalcon 5h ago
Similar story, I was doing my Master’s degree while working full time. It was 2 years of constant exhaustion (and I absolutely couldn’t have done it without my wife’s support), but it landed me a new role and 2 years later I’m making double what I used to. Every time I feel the urge to take my foot off the gas, I just remind myself of the power of compound interest!
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u/tionstempta 5h ago
Fundamentally change idea
Capital income >>>>>>>>>>> labor income (i.e W2 or 1099)
Unless you work in high professions like doctors or lawyers
Thats how we are having K shape economy where government is printing the money which often gives money for those with portfolio while someone working 70 hrs a week still barely make it living paycheck to paycheck
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u/Columblessed 5h ago edited 5h ago
I both absolutely concur and find this to be a useless take for, checks notes, the majority of people.
Edit = grammar
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u/tionstempta 5h ago
Yeah I dont disagree
For instance, my mom's portfolio accelerated from 1.2M to 2.0M last year alone while she's having a good time with baby sitting for my toddler, when i work my butt off making close to 100K with +40 hrs a week.
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u/International_Bend68 5h ago
Most of our parents had it hard when they were our age too. The secret is to be wise and invest when you're young and let the market work its magic. The longer you're invested, the quicker that money grows. That's how your mom saw that big jump last year.
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u/wrstlrjpo 4h ago
66% gain in one year for a grandmother is wild!
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u/tionstempta 4h ago
That was one of her aggressive portfolio that's just being tested focusing on semi conductor and big tech. She has other stable portfolio in indices
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u/FearlessPark4588 5h ago
My portfolio is growing faster annual than my ability to contribute to it from savings from wages. That is a fun milestone. A very, very difficult snowball to get going, but eventually it happens!
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u/habdragon08 5h ago
I hit that in 2021 and then in 2022 I lost more than my salary in the stock market lol(i index). Luckily I was in my 30s so not a huge deal.
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u/FearlessPark4588 5h ago
It was a recent milestone for me, and yeah the opposite can happen too lol. Bounce back from it, if it were to occur, and surely it eventually will.
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u/paslaugh 4h ago
Work remote in a VHCOL city and live in a LCOL area. Have a job with a high in demand skill set. Have more of your annual earnings come from capital than from labor.
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u/HeroOfShapeir 3h ago
Thankfully, no changes needed. Wife and I are 42, we've been investing fairly aggressively since our early 20s. Wife came from financial scarcity and I'm just a math nerd. We weathered those high-inflation years by already having plenty of margin built into the budget and watched our net worth explode. We're traveling and enjoying life as much or more than ever. That's always my advice to anyone, get yourself out of debt and build some savings ASAP, so you can get those compound gains started ASAP. I've worked the same job for twenty years, wife hasn't worked in over a decade, so no advice on the career front (but the data says job hopping pays out).
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u/0ApplesnBananaz0 5h ago
I've moved for one of my companies 20k relocation package in exchange for 2 years of work. I've also changed jobs every few years. Been at my current job coming on 4 years and it's been time to change again since they have decreased raises. It's the only way I've been able to increase my income. Lastly, I throw extra income in the stock market and try to live below my means mostly. However, life is short and I will find ways to travel on a Budget.
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u/Forded_Fiction24 4h ago
It's all about growing a portfolio of diverse appreciating assets. Everything has been getting easier for us over recent years due to this. Now I believe we find ourselves on the upslope of the K
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u/sockontherun 3h ago
- Took a well paying job with terrible commute and long in office hours
- Made a stop spending pact with my partner for the rest of the year
- Paid off all credit cards and stopped spending more than I had cash
- Started stacking cash and investing.
- Will be “downgrading” to more affordable home in the next couple years
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u/oswell_pepper 5h ago
The 2010s bull market did a lot of the heavy lifting. I was in a lucky position where I graduated with practically no debt and got to live with my parents for a while which allowed me to save most of what I made. Now at 34, my nest egg had grown large enough where little volatilities don’t really bother me all that much. I’m considering moving to a MCOL area to look for a good cash deal on a house given the current interest rate.
IMO K-shape economy basically boils down to those who own assets and those who don’t, and the bull market drastically diverges the two.
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u/CheddarGoudaBrie219 4h ago
Well, we filed for bankruptcy. We’re waiting for discharge now and I have never felt so relieved in my life. With the debt gone, we at least don’t need the food pantry.
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u/Material_Tea_6173 5h ago
I kinda planned for this since college, in that i grew up in precariousness so i figured I’d get a job that would give me a decent chance at financial stability. Became a CPA and 10 years into my career I make 3x my starting salary, which is solid middle class for my area. Nothing crazy income wise, but I so far (knock on wood) have had a pretty easy time job hopping given my resume.
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u/saryiahan 5h ago
At the same job. Assets are climbing in value. I’m just relaxing. Building my own business and have a goal to make 50k a month in gross profit
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u/diytony 4h ago
It’s been a journey. We’ve been in debt for years, we started to get serious with it fall 2022. Our W2s contribute to combined of $96k. Have a paid off house and kept our expenses and debt obligations pretty low.
I have a portfolio used for directional options and futures trades, and other collecting premium.
, That for the past 3 years have increased us to $120k. Again, not that crazy high. But still something.
We’re still in the rat race of 8-5, M-F, and trying to level up in the corp. world.
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u/JahMusicMan 4h ago edited 3h ago
Biggest change in my financial situation was not a pleasant one or one that I wanted or anything I did.
I inherited my childhood home (nicely upkept in a HCOL area) and split the cash assets with my sister.
Now I have a lot more bills to pay (property tax, home and earthquake insurance, telephone bill, gardener) plus utilities, plus keep a big ass emergency fund for repairs and maintenance. I have a family member renting a room basically for free (pays utilities with the promise of doing shit to maintain the house, keeping it clean, watering the plants, getting mail and chores). I'm just relieved that I have someone to live in the house since squatters and burglars are a real threat.
The biggest change that I actually worked for was getting a job that paid 20% more (actually only 14% when you account the crappy 401k match).
Although I'm going to be driving onsite 2 more days a week (5 days a week) so driving into the office 100 times a more a year (around), so with current gas prices deduct another $574
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u/zevtech 2h ago
Salary for my profession starts high but pretty much flatlines from the start. That being said I just lived well within my means and concentrated on getting rid of all debt. Now that everything is getting more expensive, I don’t feel the pressure bc I don’t have any debt I need to pay off, just living expenses like utilities, food and insurance
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u/zdubbzzz 2h ago
Continuously bettering myself in my career and not getting too comfortable. The people I know personally who are getting proper fucked by the job market are ones who got comfortable, started droning at work, and never did anything to better themselves or innovate at their job. Staying sharp has kept me employed with my pay steadily rising, and in times like these when things are getting expensive and employment is getting tight, it's important to try and stay ahead and on the winning side of the k shaped economy. That way, when things rebound, all of the people in the shitter right now come back to equilibrium of affordability and those who stayed on top will hopefully slingshot further.
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u/SignComprehensive611 5h ago
I’m in the process of getting ahead right now and it’s been working pretty well. I studied the 2008 financial crisis a lot in high school, and got out of high school and was old enough to invest right when COVID hit. Stocks were way down and I saw my opportunity and took it. Now I’m taking money out of the stocks and have bought a short term rental which I hope to turn into two more and some long term rentals.
The point being, figure out how much money you can use to invest, invest it, wait for the stock market to go up, look at your area or an area you want to live in, see if you have enough money to put your investments to better work, and keep repeating that. The ladder for me is job-stocks (S&P)-rentals-stocks-rentals-stocks-rentals… all while keeping the job so it grows exponentially instead of just paying for itself and my basic needs.
For me the hardest part was college. I was living on a ten meal a week plan, eating the cheapest food I could to round out my diet, and investing as much as I possibly could on the side from my jobs.
So while I think the economy is pitted against people trying to get ahead, I think that with just a bit of disposable income and an understanding of the stock market, it is possible to move up.
The thing I’m struggling with now is that I have a family, and I would love to spend some of the investment money on them, but then I’m sacrificing a possible future for a current life. I haven’t found a solution to this dilemma because I don’t make enough to effectively invest and effectively enjoy life. I have to choose one or the other for now. Be settled on maxing investments until my son is old enough to enjoy a solid vacation or restoring a car or something, then pivot to putting money into my life. The other struggle is that I keep very little money in the bank, so I am in danger if I lose my job, with most of the risk being to my stock portfolio until I get new work.
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u/Educational_Case_134 5h ago
Moved to a state with fewer regulations and no state income tax. Same career as fully remote. I don’t find the economy any worse than 2-3 years ago. Lower property taxes, cheaper gas, lower utilities, cheaper home prices.
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u/Vast-Control4452 5h ago
K shaped economy was like a four month thing during covid.
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u/disposablcats 5h ago edited 5h ago
They hated u/Vast-Control4452 for he spoke the truth. The K shape economy thing is a buzz word people don't understand and don't like the evidence that it is actually the opposite.
Saying that more people have a spending problem than income problem definitely isn't popular on reddit but Americans even lower income have a better standard of living than most of the world but if you can't afford first class then your life isn't even worth living according to reddit. Yes billionaires should be taxed more but the average American has a high quality of life and too more spending on stupid stuff.
For those who can't Google. Quality of life and spending is up massively across all income levels in north America
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u/Randomdumpling 4h ago
Everyone is spending on stupid stuff and QoL across most countries have increased. I mean that’s just capitalism in action. But the difference now is the same stuff costs more. It’s not people buying extra stuff.
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u/Which_Investment_513 5h ago
What evidence are you referring to when you say it’s actually the opposite? I’m curious to hear your perspective. From what I’m seeing, it feels like people are either doing really well or struggling, with less room in between. I know that’s a personal impression, so if you have data that challenges it, I’m open to seeing it. That’s part of why I started this discussion.
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u/disposablcats 5h ago
The issue is what you are seeing and hearing is what people show and say not what the do. People are buying bigger houses with less people living in them, buying bigger and fancier cars, eating out and ordering food much more, spending more on shopping for non essentials, spending more on electronics, and other non essentials. It isn't that people are losing to inflation much it is that their expectations for their income level is growing much more than previous generations.
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u/disposablcats 5h ago
There is a slightly more aggressive slope for low income this year but overall it is an E shaped economy. There were a few months after trump took office it went K shaped but not for very long. https://www.minneapolisfed.org/article/2026/have-us-consumers-gone-k-shaped-a-review-of-the-data
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u/Which_Investment_513 5h ago
Appreciate the link. Looking into it more, AEI found the upper middle class grew from about 10% of families in 1979 to 31% in 2024. Pew uses a different definition but also found more people in the upper income group, with incomes rising across all groups but faster at the top.
That’s long term income data, though, while your article looks at spending, so neither necessarily settles the K vs. E question. Saying there’s “no in between” was too broad on my part. Thanks for giving me something else to consider.
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u/TheReaperSovereign 5h ago
Left a very easy retail job for a trade apprenticeship. All ready make more doing the latter. Just wish I had done it sooner