A woman earning $100,000 a year in the tech industry laments the impact of rising inflation and the soaring cost of living, forcing her to downgrade her lifestyle, cutting out luxuries like gym memberships and dining out. Despite their combined $200,000 salary, the couple experienced "lifestyle creep," spending more as their income increased. They are now focused on saving and budgeting, aiming to cut back on non-essential expenses and track their spending more closely. The article also highlights the broader impact of inflation on households across the country, with many struggling to afford basic necessities due to rising prices.
Financial advisors are warning that purchasing big-ticket items like second homes or boats can have a detrimental impact on long-term retirement planning. These purchases can divert funds that could be invested in more liquid assets, potentially hindering financial goals. Advisors emphasize the importance of carefully considering the financial impact of such purchases, including the costs of maintenance, insurance, and the potential sacrifice of investment growth. Renting is suggested as a more efficient alternative for enjoying destinations without jeopardizing retirement savings.
A 33-year-old doctor and her husband in Los Angeles, who make over $200,000 a year, found themselves on the verge of homelessness due to their lavish spending habits. Lessons to learn from their mistakes include having open conversations about finances with your partner, paying down credit card debt, building an emergency fund, saving for goals without exceeding earnings, and avoiding lifestyle creep by closely monitoring expenses and following a budget.
A millennial couple with a combined income of $230,000 and nearly $1 million in debt sought advice from personal finance guru Dave Ramsey in 2018. Ramsey advised the couple to cut all discretionary spending for three years and stick to a $30,000 budget to dig themselves out of the hole. The couple's situation highlights the challenges of avoiding lifestyle creep and the struggles of HENRYs (High Earners Not Rich Yet) who earn six-figure salaries but don't save enough to build wealth.
A millennial couple with a combined income of $230,000 and nearly $1 million in debt sought advice from personal finance guru Dave Ramsey in 2018. Ramsey advised the couple to cut all discretionary spending for three years and stick to a $30,000 budget to dig themselves out of the hole. The couple's situation highlights the challenges of avoiding lifestyle creep and the struggles of HENRYs (High Earner Not Rich Yet) who earn six-figure salaries but fail to save enough to build wealth.
