For some high earners, even making seven figures doesn’t satisfy.
Take the anonymous entrepreneur who spoke to The Cut about what it’s like to bring in $1 million a year. Despite creating a successful fashion line, the single mom admits that “money and power make people greedy and crazy, and I am not exempt.”
Although she tells The Cut she tries to stay down-to-earth, with money, “the more you have, the more you spend; the more you crave, the more you need.”
She says that she lives a highly privileged life, yet she always wants more.
“It’s nice, sure,” she says. “My kids have the schools and homes, blah, blah, blah. But it’s never enough. The houses are never big enough. The ‘help’ is never helpful enough. You get in this rut where you’re still tired, stressed and miserable.”
Although this contrasts with another seven-figure earner The Cut spoke to, a publicist who said that “money is freedom; money is happiness,” the entrepreneur isn’t alone. Thanks to lifestyle inflation especially common in expensive cities, it’s not uncommon for people earning six figures or more to feel like they’re barely scraping by.
Washington, D.C.-based financial advisor Lori Atwood tells The Washington Post that she sees clients earning $500,000 a year who still end up with no savings. Most of Atwood’s clients are overspending on fixed costs, specifically, housing, she says: “They don’t have to have the house they own. There are times I have said, ‘You have to move.'”
Or take the parents who earn a combined salary of $500,000 a year and still feel average. Although they qualify as “upper class,” after taxes, fixed costs, childcare and discretionary expenses, there’s only $7,300 left each year to go towards other savings goals, investment accounts or retirement funds.
Lifestyle creep may be widespread, but it’s not inevitable. There’s a simple way to combat it: When your earnings increase, don’t boost your spending — instead, put that extra money directly to savings.
The same strategy can be used for any surplus or surprise, like a bonus, birthday check, tax refund or small windfall. Instead of planning trips or grabbing gadgets, consider directing at least some of it towards lingering debt, a retirement savings account or an emergency fund.
