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How's it possible to make 200,000 a year and still feel like you're living paycheck to paycheck?
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How's it possible to make 200,000 a year and still feel like you're living paycheck to paycheck? If this sounds familiar to you, you're definitely not alone and you're not bad with money. There's something very important going on here and I want to break this down for you today. In this video, I want to talk about three reasons why high earners can still feel broke even though their incomes has otherwise.
We're going to talk about not having a plan, financial creep, and the pressures of trying to keep up with people around you. So, let's get into it. Let's start off with the first part, not having a plan. Most high earners don't have a budget not because they're careless, but because for a long time they never needed to have one in the first place.
When you're making 50 to 60,000 a year, you have to be very diligent in tracking every expenses. But once your income rises to 200, 300,000 a year, you feel more of a cushion to where you don't necessarily feel like you have to be tracking everything. But here's the problem, without a plan, your money just doesn't disappear, it gets absorbed.
It's a little bit of spending here, a little bit of spending there, and you look up at the end of the month wondering where all your money went down in the first place. I'll give you another analogy. Whenever you first buy a new house, you think how in the world am I going to fill up all the space?
But then two or three years down the line, inevitably, you're going to look around and you're going to find things around the house taking up all that space that you finally have. So, this is why it's so important to be intentional and to have a plan because you're going to end up filling up that gap one way or another.
Second reason is lifestyle creep. This is where your spending rise right alongside your income every time you get a raise or a bonus. More money comes in and inevitably, it gets absorbed into a nicer car, a nicer house, maybe even more travel. This is not bad on its own, but if your lifestyle is increasing at the same rate that your income is increasing, then you're essentially staying in the same place.
The only difference is that you're doing this with nicer things now. And this leads us to the third one. And honestly, this is the one I really want to talk about. When you're a high earner, there's this unspoken rule to feel like you have to spend like one. Your coworkers are driving a certain car, your friend group is going on certain trips, all these different things around your circle.
It looks like everyone around you is living a certain lifestyle. Then there's pull that makes you feel like you have to keep up with them even if you don't want to. The truth is, a lot of people making great money are financing their lifestyle to impress people that they don't even like in the first place.
And that pressure is real, but honestly, it's optional. So, what's the fix to this? Well, it starts with knowing where your money is going at on purpose. This isn't a complicated system or anything like that. It's just having clarity. Then it's also about making intentional decisions about your lifestyle as your income grows because you don't want to be spending haphazardly.
It's about determining for yourself what enough is and not measuring it against someone else. Please leave a comment below and let me know if you have any questions or thoughts.
This video is for general educational purposes only and is not personalized investment, tax, or legal advice. Every situation is different. Talk with a qualified professional about your circumstances before acting. PLC Wealth Partners is a registered investment adviser. See our disclosures.
