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7 Reasons Why I Still Live in a Lower-Middle Class Neighborhood

live in a lower-middle class neighborhoodMy wife and I earn a combined six-figure income, we’re completely debt free, and we have an extra couple thousand dollars that just go straight to savings each month. So given our situation, why on earth do we choose to live in a lower-middle class neighborhood? Many others would buy a big house on a lake or upgrade their car to something that’s faster, shinier, and more expensive. At this point, we have absolutely no interest in moving and we are perfectly happy with our cars that have a combined value of $3,000. Are we crazy? Well, maybe a little, but there’s a reason behind the madness. Actually, there are 7 reasons why we still live in our lower-middle class neighborhood.

1) We Simply Don’t Need Anything More

I bought my house for $75,000 back in 2011. It was pretty ugly at the time, but with a little bit of elbow grease it has really turned into quite the gem over the years, worth somewhere around $125,000 today. While the surrounding neighborhood might be a little questionable, this house is still safe and has plenty of room for the two of us.

There are 3 bedrooms and a full bath upstairs, a living room, kitchen, half-bath, porch, and dining room on the main level, and a laundry room and family area in the basement. At any given time, Liz and I can only occupy two of these eleven rooms, so why in the world do we need a bigger and better house? We don’t, so we’re staying. Plain and simple.

Related Article: 9 Lessons in Wealth Building From the Millionaire Next Door (hint: one of them is staying put in your home for decades at a time!)

2) Gives Us Options for Parenting

Liz and I would love to be parents someday, God willing. If we’re blessed with some little rug-rats in the future, then we’d really like to be the ones responsible for raising them, not the local daycare facility. Since we’re currently mortgage free in this home, staying put will allow one of us the option to quit our job and raise our children the way we want to. If we were loaded up with a mortgage, then we’d probably both have to juggle full-time jobs while finding the cheapest daycare facility possible – not something either of us want to do. We’d much rather stick around in this home that suits us just fine at this time.

lower-middle class neighborhood3) Save Money by Avoiding House Hopping

So many of our friends naturally house hop. They buy a starter house at first, but then after 2-3 years they decide to upgrade a bit, and then after just a few more years they move to an even bigger home than the last one. From the outside it appears that the house-hopping couple is doing very well, but in actuality the couple just has more debt and still likely owns less than 20% of their home. By jumping into larger and larger houses, they are spending more on closing costs, private mortgage insurance, home owners insurance, property taxes, home repairs, and realtor fees.

For Liz and I, we’d much rather stick around in this house for a while and:

  • spend no money on closing costs
  • spend no money on private mortgage insurance
  • spend only $400 a year on home owners insurance
  • spend less than $2,000 a year in property taxes
  • spend minimal amounts on home repairs (now that the house is all fixed up)
  • and spend absolutely nothing in realtor fees

Doesn’t that sound like a good plan to you?!

4) Allows Us to Invest Heavily

By continuing to live in a lower-middle class neighborhood, we are making it possible to live amazingly wealthy lives later. As Dave Ramsey says, “Live like no one else today so that tomorrow you can live like no one else.” In other words, we are living on a budget and investing our extra money today so that we can produce a massive income in the future. By delaying our dream home for just five years, we  could probably increase our passive income by $40,000 and more quickly buy our dream home with cash in the future. It’s amazing what a little delayed gratification can do!

live in a lower-middle class neighborhood5) Keeps Me From Seeing the Joneses

Do you know why TV and Internet advertisements are so effective? It’s because we all naturally want more as human beings, and when something cool is put in front of our face, we simply want to have it. By choosing to live in a lower-middle class neighborhood, Liz and I are reducing the amount of cool stuff that’s put in front of our face. If we lived in a nicer neighborhood, our friends and neighbors would have nicer cars, boats, campers, and perfectly manicured lawns. After a while, we would naturally be inclined to want those same things ourselves – it’s only natural. By staying in this house, we’ll only see mediocre cars and very little luxury. It’s absolutely perfect and it naturally keeps our spending to a minimum.

6) Still More to Improve (and enjoy)

This house is still not all that it could be. The outside still needs painting and the basement could still be finished with padding and carpeting. Rather than putting it up for sale and quickly completing the projects to get a few extra thousand, I say that we complete the projects now so that we can enjoy the house for what it could be. Then, when it’s time to sell, the major projects will already be finished and there will be no need to hurry up and fix everything so that we can sell it.

7) The Proximity to Other Places is Excellent

While this home is near questionable neighborhoods, the block where it sits is actually pretty decent and the house is close to everything. If I want to work out or go for a swim, I walk one block to my west and get my exercise on. If I injure myself and need to get to the hospital, I walk 2 blocks to the south. If I have some kids that want to play in the park, I’ll walk directly across the street and let them tire themselves out for the afternoon. And, if we want to enjoy a stroll downtown, it’s only a mile away. Like I said, this house is close to everything and it’ll be hard to give it up.

Living Below Your Means

If you want to have a bright future, then I suggest that you live in your starter home for as long as possible. Liz and I have 3 bedrooms, so we could really have two kids in this house and everyone would still get their own room. There’s really no reason to have anything bigger at that point. And, by holding off on the next house, we are likely saving ourselves tens of thousands of dollars. If you want to get ahead, put your move on pause and put your money into investments instead.

Would you live in a lower-middle class neighborhood?


AUTHOR Derek Sall

Derek has a Bachelor's degree in Finance and a Master's in Business. As a finance manager in the corporate world, he regularly identified and solved problems at the C-suite level. Today, Derek isn't interested in helping big companies. Instead, he's helping individuals win financially--one email, one article, one person at a time.


  1. Love today’s article. We bought our house 20 years ago at foreclosure (before that became a popular thing to do) and I am trying to decide whether to redo (gut) the modest kitchen. It still has the 50 year old, but very well made, knotty pine cabinets that we refinished when we moved in. I think I will do it with the realtor fees I am saving by not moving, and enjoy it!

    • Sounds like you’re on your way to becoming the next Millionaire Next Door, Dottie! Well done! As for the kitchen redo, it’s certainly not a bad idea – after all, kitchens sell houses (if you ever decide to move that is). You’ll just have to be smart about the expense of it. I have seen kitchen redo’s get out of hand and cost upwards of $40,000. If you can do some of the work yourself (or find some cheap labor through neighbors and friends), I bet you can keep your total bill under $15,000. Save up the cash and give it a go, and be sure to send pictures my way!

  2. This is a pretty awesome post, IMHO. A home is the biggest financial outlay for most people. Avoiding the urge to move to a bigger, snazzier home might be tempting, but it’s not really worth it in the long run because it means that you’ll be working harder for longer to pay for it.

    • I once had a friend that bought the absolute maximum house he and his wife could afford. Their social life pretty much stopped after they signed the dotted line because they never had any extra money! To me, a house just isn’t worth sacrificing your retirement accounts or your fun. After all, it’s just a place to sleep and house your stuff. Thanks for the comment, Chris!

  3. Great post! I completely agree with you. I have been in my house for almost 15 years and next year my mortgage will be paid off. Yay! The house is the perfect size for me and it is in a safe neighborhood, close to work, close to the freeways, and everything else I need. Although I could afford a bigger, nicer house in a more affluent neighborhood, I would rather retire early and enjoy a financially independent lifestyle. All your points are spot on! Keep up the good work and don’t keep up with the Joneses. 😉

    • Thanks for the encouraging comment, Jen. Sometimes it’s a little awkward being so different, but in 10 years those people that thought I was nuts will soon realize why I live the way I do. They’re life will be mostly unchanged, while mine will have advanced considerably.

  4. I love this post. I don’t blame you for not wanting to see the Joneses. I actually live in an lower-middle class area myself. I plan on staying there for another year or 2 while I pay off my debt.

    • Great plan, Jason. Glad to hear it! I’ll be staying in this house for probably 5 or more years in order to build an income that will allow my wife or myself to stay home with the kids. We’re up for an exciting future!

  5. Listened to your story on Hisandhermoney show and catching up with your posts. I had been trying to log on to your site ever since but for some reason was having some issues. Whoo hoo! Glad its back up again.

    I am in the mindset to pay off my house so trying to find another stream of income. I am a person who always worked two jobs up to a few years ago. I guess I need to get back on that wave.

    Thanks so much for sharing all this great info. I am so EXCITED to get to reading it all.

    • Hi Nicole – I’m glad you found your way to my site! I really hope you find the stories that you need to succeed yourself. If you have any questions, feel free to shoot me an email through the “Contact” tab.

      • I did! And thanks so much! 🙂 🙂

  6. These are the exact reasons, that we are living where we are (1400 sq ft, $65K house).

    While I certainly want to finish fixing it up, we are happy to live in a lower middle income neighborhood. If we ever want to live in a higher income neighborhood, we’ll probably just rent for a while, but I know then we would be tempted to buy a lot of stuff (I want a boat too) that is really not necessary for our happiness.

    • Thanks for the comment, Hannah! We keep saying that we’ll stick around in this house for the next 5 years at least. It will allow us to put a ton of money into our investments and we’ll be able to spend more time with our future kids!

  7. If you have kids someday, you should move. Your kids are influenced more by their peers than you. Do you want them growing up around lower middle class kids? I’m sure there are some who are nice kids, but their parents might not raise them the same way (think about school, good grades, staying out of trouble, etc.). Of course I am sure there are bad people in a nice neighborhood too, but the mentality is different.

    • Yup, good point. But I also don’t want to move to an upper class neighborhood and live paycheck to paycheck just so my kids an hang out with other nice (supposedly) kids. Where I live isn’t the slums, it’s just hard working people that are doing what’s best for their children. And those are my kind of people!

  8. I live in a lower middle class neighborhood and to be honest it stinks. These neighborhoods usually have bad looking houses on the street that are unkept. It is just visually ugly and depressing. Location, location applies. Older can mean dumpy. There is also a lot of moving out and moving in so you really don’t know who your neighbors are. It is a younger area and it is LOUD. I hate to say this but lower class hoods can mean lower class people. I don’t want bigger I just want to be around pleasant people with manners that keep their home up and respect their neighbors. When you have children your going to want a nice area with a great school system (the high school here is called meth high)and that can cost.

    • Hi Gail. I guess we were fortunate enough to have decent neighbors.

      But anyway, you’re right. Once it makes sense financially, it might actually pay to move out of there. We officially moved to a better location a year ago, but it’s only because we’re nearly millionaires at this point and felt it was the right time for us. Since we bought a more expensive house in a nicer area, it’s going to cost us some dollars long term (home investments go up 4% a year, the average stock market goes up 11%). But, we feel that the emotional benefits outweigh the financial ones. And, perhaps you’ll decide that at some point too!

      Thanks again for the comment, Gail. Stay in touch!

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