Six non-investments that make affluent families feel poor

Let’s say you worked your butt off, got a decent job, and are making a solid living. And yet you still can’t get ahead. You might be falling victim to what the data scientist Nick Maggiulli calls the upper-middle-class trap: as incomes rise, people spend more money chasing better versions of stuff they already have, ostensibly for some measurable benefit, when in reality this new stuff just vaporizes cash. Sure, sometimes the kitchen really does need a refresh, and if you’ve got the money, go for it. But if you’re feeling squeezed, you should probably skip these six splurges. 

Home remodels. Heated bathroom floors are a modern marvel, but such extravagances tend not to pay for themselves. Homeowners typically recoup only about 42% of their money from an upscale bathroom remodel and 18% from a fancy primary-suite addition.

Moving into a bigger house. It’s a classic tale: a city couple has kids and flees to the suburbs, expecting more space for lower costs. According to a University of Virginia economist, though, people with comparable incomes but smaller homes in denser neighbourhoods tend to save more — largely because more space means more maintenance. Which is why, over time, families in larger homes tend to accumulate less wealth. 

Lavish weddings. Want to reach your Golden Anniversary? Skip the 10,000 imported roses on Day 1. Economists found a correlation between pricier weddings and shorter marriages, often because wedding debt strained their marriages (and because they lacked financial discipline to begin with). So if you and your beloved manage to stay on budget, that’s an auspicious sign. 

Travel sports. Don’t let daydreams of your child turning into the next Sidney Crosby be the reason you drop $10,000 (or more) a year on travel hockey. A number of surveys have found that between 27% and 49% of parents expect their kids to earn an athletic scholarship, even though only 2% of high school athletes actually do. The odds are just as long for gymnastics, modelling, and pageants. 

Storage units. Families pay hundreds of dollars a month to store stuff that’s worth less than the rental fee. This colourful New Yorker tells of grown siblings who’d planned to store their late mother’s furniture temporarily until they could sell it, then left it there for 20 years, paying US$50,000.

Fancy private school. We’re well aware that parents have, let’s say, strong feelings about their kids’ education, but Maggiulli points out that the elite private schools have no meaningful effect on academic outcomes. A stable home life, socioeconomics, and the parents’ educational attainment matter infinitely more. Statistics Canada has reached similar conclusions. One asterisk is that school quality really matters at the bottom of the income bracket: getting low-income kids into good public schools can pay off big.

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Abigail Covington is a features writer at the Philadelphia Inquirer and was previously a Contributing Editor at Esquire. Her work has been published in The New York Times, The Washington Post, Rolling Stone, and Pitchfork.