We often think of a six-figure income to be the answer to all our problems. After all, if you make at least $100k a year, you must be doing something right — and have plenty of money.
The reality, though, is that there are plenty of people making six figures and struggling to make ends meet.
While there’s no one reason that this happens, here are three reasons why expenses can get a little out of control with your budget, even if you are considered “rich” in the eyes of others:
1. Your Lifestyle Costs Keep Rising
One of the realities of the situation is that sometimes your lifestyle costs rise as life happens.
Things like kids can start taking a bite out of your monthly budget. If you have a growing family, the costs keep rising.
Other lifestyle costs can get in the way too. If you move into a bigger home, that comes with higher property taxes, utilities, and other expenses. Your more expensive car is also adding to your costs.
Also, look at your other costs. If you go to a lot of parties or you want to go out a lot, you end up paying for babysitters and spending money on food, drink, and entertainment.
Carefully think about what you’re spending money on. There’s nothing wrong with spending on the things you love. I like travel, and I spend money there. I just have to prioritize. If I spend more on travel, I will spend less in other areas. I recently stopped myself from getting a new dress for going out because I want to go out for a nice dinner instead. Decide what you care about and spend money on what makes you tick.
2. You’re Keeping Up with the Joneses
When my then-husband and I moved into a new house, we purposely chose a neighborhood that had a lower socio-economic profile. We didn’t want to get caught up with the status game — which can be quite expensive.
Everyone wants to feel like they belong. If you move into a neighborhood where people around you are paying for lawncare, driving fancy cars, or taking the boat out for a spin, it’s hard not to feel like you have to join in.
You might not even care about some of the things those around you are doing. So, why are you paying for them? Take the time to really think about what matters to you, and what kind of lifestyle you hope to enjoy. Rather than basing your spending on what’s going on next door or down the street, focus on what you want.
You’ll save more when you stop spending based on others’ values.
3. You Give Too Much
There’s nothing wrong with being…