7 Mistakes Six-Figure Earners Make

These Are The 7 Mistakes Six-Figure Earners Make

By Clint Haynes

Earning a six-figure salary can make building wealth easier, but it’s not a magic solution for your financial woes. Earning a high income is only one part of the equation. If you want to be financially secure, you need to make your money work for you.

A high paycheck can make it easy to gloss over financial mistakes since you can still cover your bills. However, if you want to build wealth rather than an inflated lifestyle, you need to focus on reaching your full financial potential.

Most of the mistakes that six-figure earners make are easy to fix. Here’s how to use that high income to your advantage and build your net worth.

7 Six-Figure Money Mistakes

Mistake #1: Not Using A Budget

Just because you have a lot of money coming in every month doesn’t mean you shouldn’t keep track of where it’s going. This makes it easy to squander your paycheck without making any financial progress.

Creating a budget doesn’t have to be hard. Think of it as your spending plan. Make a list of all monthly expenses and use it to create your budget. Does your spending in each category align with your values? Can you cut back or cut out any expenses?

Certain expenses such as eating out or groceries can get out of hand if not kept in check. Cut back on these areas by cooking more at home and shopping smart. You can still have fun with no regrets when you know you’re sticking to your budget.

Review your accounts for subscriptions you are not using and cancel them. Look at your other expenses and think about ways you can cut back with little sacrifice. It may surprise you how spending can escalate when left unchecked.

Make sure to track your spending so you know where your money is going every month. Just because you can pay your bills every month doesn’t mean that it justifies your spending. Every dollar you invest instead of spending sets you up for a better financial future.

Mistake #2: No Long-Term Financial Plan

Having a long-term plan is an important part of setting yourself up for financial success. Making a six-figure income won’t mean much if you lose your job or if you don’t save enough for retirement.

If you want to continue to enjoy the lifestyle that your high income provides, you need to get your retirement plan on track. Having a financial blueprint will give you peace of mind since you know what financial moves you need to make to ensure your success. It will also help you align your finances with your long-term goals and values.

It also means you know how to invest your future dollars so you can maximize returns. Make sure to involve your spouse in all future financial plans so you can get on the same page. Figure out what is important to both of you, such as paying for your kids’ education, saving for retirement, buying another property, and aligning your spending with your goals.

 

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