What to Do When You Feel Broke With a Six-Figure Income

in it. Even though it sounds really nice to be having a six figure income, sometimes a lot of people are living on that six figure in come, and so that's what this episode is all.

So it may be harder and harder to find yourself there, but still most people are middle income earners, and that's going to be in the mid six figures if you are in a two income household. If you are any single income household, you may not have a six figure income. But I would implore you to keep listening anyway, because there's a lot of practical tips and mindset shifts that you could still be making for when you do get to six figures, because you will, I believe in you.

And then we've also got episode two fifty six using gratitude journaling to help you spend less because spoiler alert, gratitude and spending less can also be some of the cures, some of the antidote to when we feel like we don't have enough. But first, let's get into this episode, and there are a couple of notes that I want to say too as we start to queue up this first article. Is that we don't mean for this title

to be offensive. I think six figures can sound like a lot, but there is a reality again, this is a listener requested episode where we might be earning six figures and still feeling like it's not enough. So we want to address that while also recognizing that there are people living on way less than this who are actually maybe at the poverty line, not just having and experiencing

feelings of being broke. So recognize certainly where you're at as you're coming to this episode, and also hear us out on some of the mindset behind this, what might lead a person to feel this way, circumstances as well as emotions that go into this.

seem sometimes like it's not enough? Again, let's jump into this article because I think it kind of explained some of this, But one of the things I've realized for myself is I don't think six figures means the same thing that it meant ten years ago, potentially even five years ago. I mean I remember ten years ago thinking, man, if we could just make even a combined sixty thousand dollars, like we would be set. And now it feels like, you know, the low six figures for a household, especially

a household with children. It's like, depending on where you live, this is what you need to make in order to like meet your bills and be able to have any sort of fun. But expectations do play into this. So the first article does come from dough Roller, which is how to make a six figure salary and still be broke.

But if it's two people, if it's dual income, then then you're there and this episode is for you. But so yeah, these are definitely all the things that I would have included on this list. So I agree with Doe Roller and the author.

I think really a lot of coastal cities, both on the East Coast and the West coast, and your larger cities are going to be higher cost of living areas. And then again, as we've mentioned, depending on how many people are trying to live off of that income coming into the household can really steal away from what can feel like a large amount of money. So the city that you live in could be a contributing factor to what makes you feel like where is all of my

money go? They reference how eighty thousand dollars in a Midwestern city could stretch way further than one hundred thousand dollars in certain coastal cities. So just where you live plays a factor into how much money you feel you have or even that you actually have.

If you're investing for retirement before you have kids or a spouse, it's just you, and so if you get a raise, then you're putting money into you versus later on in life when we've got you know, mortgages, cars, spouse, kids, all these responsibilities. If you get a raise, that money's already tied up, you know where to put it. So one of these first big ways that we tie up our money and tie up our raises before we get

them are in the house that we buy. So the article says, and math says, if you're making one hundred thousand years on the nose, that's about eighty three hundred and thirty three dollars per month, which sounds fantastic. So you could get an FHA loan with a monthly mortgage payment of about twenty five hundred dollars a month, and that would leave you with over with about fifty seven one hundred dollars for other expenses. And it also says,

remember that thirty one percent. That's a thirty one percent mortgage rate, which is normally what the what the loan provider is going to recommend that you stay on about thirty percent of your income, So twenty five hundred dollars a month though, but that's based on your gross income, not your net take home or how much like all of your other expenses are going to be. They'll they'll take into account your debt, but not what you're going

to spend in the future with your lifestyle inflation. So after net, that leaves you with about three four and eighty nine dollars per month after your maximum mortgage. And people will look at this maximum this mortgage like thinking, okay, whatever, I can get approved for a because houses are so stinkin' expensive, like now more than ever, but also because you can anticipate making more money, But that really ties up your money before you've made it and can make you house poor.

So I would say, don't get at the top of what you're approved for. And if you're already at the top, then it's not too late to go back. I was just watching Remeats show on Netflix, the new I was just going to reference. Yes, okay, so if you haven't watched it, it is phenomenal, Absolutely go watch on Netflix. It's It's re Meeat Seti's I Think How to Be

Rich I Think is the name of it. And one of his the girls on the show, she buys this condo because it's what's expected of you, like as a young woman, she wants to be financially independent, and for her, buying a condo is it's like a soul decision, which is not bad. It's not a bad way to make a money decision, like if it's if it's a heart

decision over a math decision, that's not bad. But girl did not realize all the extra expenses that come with the house, in the taxes, insurance, all of the repairs. The condo association. Yeah, so hoa or condo association is so expensive if you're not anticipating it. Sometimes they can be like fifty bucks a month, but a lot of

the times, for condos especially, they're outrageous. And she literally would not afford to fix her hot water heater, so for six months she was showered like taking cold showers because she couldn't afford it. And that's not the dream, that's not the status, that's not what you're looking for. She's extremely house poor, so she Yeah, I won't spoil the the what she decides to do, but that is a way that we can really get into this mess.

home your gross income. So then what he was also saying was not just your mortgage, but consider all of

the other expenses having to do with your house. What is your utility bill going to be, your electric bill, and even the amount of money that you want to be setting aside monthly for your house to anticipate big or small repairs, and so all of that collectively combined shouldn't be more than thirty percent of your take home income or I mean, he does say gross income, but still that's definitely a much more conservative approach and conservative number,

which I found really helpful because I don't think a lot of people are considering what else you're going to have to pay for beyond just the mortgage. That can really bring down what that number actually is and what you can feel comfortable affording so that you don't become house poor. The next one on here is lifestyle inflation, which I know you've already referenced, Jen, but this happened, Oh,

I've experienced it myself. Of as we earn more that are expenses, even discretionary kind of rise to meet that level of Well, now I've now I'm earning this much, So why can't I do XYZ daily, weekly, monthly? I mean, this could be right down to I'm getting takeout every other day, i am going out to coffee every day, I'm saying yes to as many vacations as possible.

our lifestyle. That's what can eat into feeling as though, man, where did it all go?

that's a very hard move to make. Lifestyle inflation is a ton of micro moves that you have made to increase your expenses, and it's easy to take off these micro moves, but you have to peel back so many of them, and it becomes so convoluted between like, yes, your lifestyle should inflate you age, like I no longer go to concerts where I have to stand. I will only go to a concert if I can sit. That's because manees and mahips are not as good as they

were in my early twenties. So yes to a sense like your lifestyle should inflate, But where is the line is the hard part. So this is like a it's going to take a lot longer to reverse lifestyle inflation, and it is a lifelong journey to figure out at what point like is the right amount of lifestyle inflation, because it's not a bad thing. Your expenses should get higher as you earn more money as you get older.

I saw an article of a survey about purchasing luxury brands and how each it's I don't know what the point of it was, but essentially each age group, like from Gen Z to millennials to X to boomers, the higher it gets, the more people spend on luxury goods. And like a duh, the older you get, the more money you have to spend on luxury goods. B you're tired of throwing away cheap crap, so you're looking for more long lasting things so you don't have to buy

as much. Like I don't know what they were trying to get the point across, to be, but that's not a bad thing. Like I don't know if they were trying to say it was a bad thing, like, oh, millennials are spending so much money on luxury goods, but it's not a bad thing. We just need to figure out where that line is to be where you should say yes and where you should say no, because it is so much harder to peel back all those micro decisions than it is to just have a line in the sand.

car troubles, you lose your job. If you are living paycheck to paycheck, if your lifestyle is inflated to that, this is what's going to throw you over the edge. This is what's going to put you into credit card debt and get you feeling broke, like you can't get out of a hole. So whatever it is that you're doing doing stopping and making sure you have an emergency fund of at least two thousand dollars, you get to pick what makes you feel safe. If you feel safe

living with zero dollars in an emergency fund. Let's start with two thousand. But that just to make you feel safe safe you're not definitely have more right, So that I think is the first. If we're talking about steps to take to not feel broke with a six figure income, this is step one. I think this should be. That should have been number one. It's just not the sexiest answer.

prioritizing this over your lower interest debt. But that will make a significant difference in how you are feeling about your financial landscape.

keep high interest debt at bay. And I would even yeah, I would lump car loans into this at this point because car loans have gotten much more expensive. They're not high as high of interest as credit cards. But you can be car poor just as you are house poor. It's much easier to become car poor at this point because cars are much more expensive than or much more affordable than houses. So be careful of what car you get.

We are not advocating for buying jeloppies and ending up in your mechanics family because you see them so much. That's not what we're advocating for. We are not against auto loans. We are against auto loans encouraging the availability of auto loans, encouraging you to take out larger loans that make you car poor.

And it's I had this like sunk cost fallacy that I had spent so much time with this salesperson, and I felt bad for wasting all his time just to get up and leave, but ultimately I had to take care of me first, and I got up, and I left, and I went to the other dealership, and I saved that one decision saved me four thousand dollars, which over the life of a car loan is nothing, but when you think of it in totality, like if I have the option to save to make one drive and save

four dollars on a carton of eggs because that's how much they are now, or four thousand dollars, I'm going to take the four thousand dollars decision, right. So this is the way you can think about buying decisions when we're thinking about high interest debt or debt in general, is yeah, you may need to take out a loan, you may need to put something on a car card, but don't let that credit card debt roll over, and don't take out all the money just because they say

you can. So the next one is massive student loan payments. And we don't have to like reiterate this. We all know that we're suffering because we have massive student loan payments. But I think we'll just say, make a plan to pay them off. And they are not as high of a priority as your high interest debt or probably even your car loan. So yeah, that's but they are. They do tend to be an emotional burden and can limit your spending opportunities.

on to say, well what we do about it? This article wraps up where our next article begins, though, and I do like some of the example that they give just about how much mindset does intersect with this idea that there are certainly circumstances, very real that can make us feel like we don't have much, but there's also so much that is imagined here where our own thinking patterns, ways of relating, ways of viewing the world, expectations have a lot to do with how we're feeling, even beyond

our circumstances. They give an example of say there's two people who make the same amount of money and live very similar lifestyles, but one has a ton of debt and is living paycheck to paycheck and the other doesn't. They look very similar, but internally the stress that they're under, what they're dealing with, the way that they are experiencing

their circumstances is dramatically different. One they are living frugally by choice, and the other they are frugally because it's like mandatory for them because of how much debt that they have. And so this just kind of drives home this point that in part, being broke can be a mindset if you are making the six figures and beyond, we're not talking about true poverty level, but it's also reliant on other factors like your overall spending choices and

how you control your budget. So I really like that wrap up to this article because I think it's a helpful challenge to us to Yep, let's look at why is this happening, but also what are the other factors of my personhood that are playing into me feeling this way? And how do I take control over how I'm feeling about my circumstances and just the reality of my circumstances. So this next article I really like comes from Cachet and it is five ways to repair a broke money mindset.

inflate your lifestyle, will inflate your expenses. So I really liked these in that sense is that they are applicable, Like when you go into make a decision, you can use these too say no. So like the first one, first way to repair a broke any mindset appreciation in gratitude. So yes, you can, you know, keep a gratitude journal. We love that practice gratitude and appreciation for the people

and things in your life. Yes the article does say that, but practically I know that after about three to four years of owning my car, I have learned every single thing about it that annoys me. And that's when I start getting this itch to go get a new car. But instead of doing that, I try to think of a few things that I appreciate or I'm grateful for in having what I have. Now, this isn't the same as like my last car actually was dangerous to drive

and I had to get a new one. But if it hadn't been dangerous, like there were a bunch of other things like the radio didn't work and all this other stuff that was actually livable, And so thinking of things like appreciation gratitude to say, Okay, I don't actually need a new car right now, I can keep this one for another two to three years. Stuff like that. Or when you're thinking, oh this house, I need a bigger house, there's like we're, you know, three people busting

out of this house. Then like appreciation and gratitude for the things that you have and for the things that you can get rid of to make more space in your house so you don't have to buy something bigger, or just so many ways you can bring this in to prolong the inevitability of these decisions, like yes you probably will get a new house, Yes you probably will get a new car, but you can push that off and take full utilization of the things you already own

to get the full value of them through appreciation and gratitude.

within our control. Maybe a combination, most likely a combination has led us to where we can currently are, but focusing the majority of our attention on what's ours, What do we actually have control or influence over, and how

can we steer our efforts our capacities towards that. Maybe rather than expending unnecessary energy on the things that are outside of our control or influence that kind of keeps us stuck, that doesn't allow any sort of forward movement, that maybe keeps us in this state of discontent, but rather okay, but this is ultimately my life to choose what's next. Maybe there's things that happen to me that I can't take back or didn't have any control over.

But where can I go from here? And how can I choose to author the components of which I actually have the ability to author and write in my own narrative here?

control that you can control the outcome of. So like if you may not be able to control how much money you put towards your debt this year, because things will come up, but you can control your actions, So I, you know, I want to put five hundred minutes towards my side hustle of delivering for Postmates, and I want to put one hundred percent of that profit towards my debt. It's not monetary, but you have one hundred percent control

over what you are doing. You're clocking this many minutes and you're putting one hundred percent towards your dead Ultimately, don't have control over how much you know people are tipping you, how many jobs you're gonna get, like every time, so you don't have control over there, but you do have control over how many minutes you are working that. So it's just this shift of like instead of creating these arbitrary goals for your life, creating goals that you

are the master of. Like at this quote at the end from the William Ernest, I am the master of my fate. I am the captain of my soul. It sounds so extreme, so powerful, but you're the master of some things, not everything. So just only master and captain the things that you know you can, Yeah, is to focus on opportunities, and that kind of runs with the last one is when you are focusing on the things that you actually have control of, only then will you

be able to see opportunities. If you are like just letting life happen to you, you miss opportunities for growth or for more monetization. So I know my husband Travis recently got a new job because he has been looking for one, and he a lot of the times doesn't like jobs come to him, but he wouldn't see them as that like, he only sees them come to him because he's looking. I don't know if that makes sense. He sees the opportunities because his eyes are open to them.

So focus on the things that you have control over. And when you are focused on that and you're being the progress, then your peripherals are going to be able to see opportunities for other ways to make money or to save money. And yeah, I like that. Focus on the opportunities.

They reference how a lot of times people with a broke money mindset or scarcity mindset are more concerned with looking well, healthy, or rich, or like having achieved a certain status rather than actually having achieved that thing, and this can eat into what is available to us, both

in the long term and the short term. So this is where it can come back to what is the lifestyle that we want to be creating and are there elements to I might feel a pinch right now, but it's because of these longer term things that.

healthy way. And so it's those relationships and having more of those relationships that help me keep my lifestyle inflation in check. It helps me be grateful for the house and the car and the people like in my life. The relationships you have are going to have such an impact on all of the other things we've talked about today.

So if you are surrounding yourself with people who are living paycheck to paycheck, who are the jone is you're trying to keep up with, are TikTok influencers, like or buying everything that TikTok tells them to, You turn into that person even when you don't want to. Just little by little, so intentionally find people who are acting the way you want to act, spending the way you want to spend. And spend more time with those people.

for a crisis emergency fund. And now we're realizing that maybe we had underestimated and overestimated certain categories because we weren't tracking it. And now we're going to fix all that and make sure that all the categories are right, and then I think we'll have some leftover, and I want to challenge ourselves to use that leftover money to put towards our car payment, to get that kind of taken off, because I thought that payoff was way out of our scope. So thank you so much. And I

enjoy listening and I'll enjoy listening in the futures. Thank you.

for let it around. And if I make more noises, I won't have to get vulnerable.

a budget. So I actually do not make a spending plan every month because I'm pretty in tune with my spending. I've spent years and years like getting handle on my spending, increasing my income. And I am not the lover of spreadsheets and numbers and all that. That's Jill. Jill loves that she does.

do it. But when I feel anxiety about being broke, that's when I head back in and I make the plan and I see what the spending is telling me. And most of the time the feeling of being broke is a feeling and not a math. So that's me. But yes, that is my biggest thing that I do when I feel like I might be broke, which is something that's happening right now. It's very it's a very pertinent question right now. Thank you, Goldie. I guess I can talk about that later.

then inform what my response is going to be. So if it's a circumstance, So here you go a vulnerable example for me, I have felt felt broke. Now, I have known the reality of not having a lot of money. Now Eric and I combine do earn six figures, low six figures, But there are times where I feel like where I don't have a bunch. And some of that, more recently is related to yes, I had an emergency savings, but I realized very quickly that that didn't.

a circumstance that led me to feel that way. So then making a plan for how do I build this emergency fund back up, where can I cut in some of my other discretionary spending so that I can feel better about where this cushion is again, And then as opposed to if it's just a mindset like I don't know, I was just scrolling the internet and everybody's making it look like everybody's super wealthy all of a sudden, and Okay, it's just my mindset, then that my response to that

might just be that gratitude piece of Okay, but what do I have and how can I create some separation between me and like what's being sold to me?

think it's relevant for this particular topic. She was emailing me very asking for help because her family was in a lot of debt, but her like and she just needed to know what to do, like to pay it off, like where to start, and she said her daughter rides horses. She's into a question in which, if you're unfamiliar, it is a very expensive I mean, I'm unfamiliar. I know it's expensive. It's just an expensive it's like the most

expensive support you could put your child in. And so like I read it, and initially I was just like, I can't answer this because you already know what the answer is. You've got to stop with the horses. But I thought about it, and it's easy for somebody on the outside to judge somebody else that they don't know who's behind a computer screen, who's genuinely asking for help and genuinely is at a conflict, like she has built

up her She's had a pretty stable income. It had to have been pretty good to get started with horses, so making good money, but because of lifestyle inflation, and whatever else is compounding like the first article, you know, all the elements from the first article we talked about, has gotten to this place where she nothing to show for it, and not even that has probably negative to show for it because she's trying to pay off debt and realizing, like she's put her child in one of

the most expensive sports there is and at this like dilemma of like I can't deprive my child of what I've already given her, and I don't know where to go from here to make it better, And like that just filled me with so much despair, like I and I did not I didn't respond to the email, like it just it caught me for so long and then I just forgot and I don't know, years later, I

thought about it. But I don't want that struggle for any of you listening, And like maybe it's not horses, it's whatever, but I don't want that internal struggle for you that you have put your children and your family into this position to where in order to bring your family up, you'd have to take away something from somebody else. And sometimes that's going to have to be what it is. But if it doesn't have to be, think about the things we've talked about today and don't let it get to that place.

do we then get get back to this place? How could we make some changes where this could be something that is affordable for us?

So thank you, Ziah. And if you didn't like it, leave us a rating and review on good Reads. No, I'm just kidding.