A recent article by Bloomberg News highlighted an income survey that yielded a very surprising result: According to the respondents, 36% of those earning $250,000 or more annually claimed they were living “paycheck to paycheck” (including 55% of millennials at this earning level), and 19% “always or usually” have revolving credit card debt.
How can that be? That level of income should more than suffice to pay all typical bills and to put money aside for savings and emergencies.
According to the article, these earners, whose income is greater than that of 95% of Americans, are not necessarily experiencing financial hardship. Yet nearly all their money goes toward paying household expenses and any personal debt.
In my professional opinion, the issue for these individuals is not one of income. In fact, you might expect if they earned $500,000, they would resolve their problem, but they would not. These people are making choices that compel them to live this way. The underlying problem is their spending habits.
Income is a person’s greatest wealth-building tool. If an individual or family is making $250,000 per year and spending it all, that’s a real problem. If they can’t account for their spending, that’s an even bigger issue.
In any case, these folks have a vision problem—they are seeing the bills in front of them but not down the road, toward a secure financial future.
Financial advisors like Isakov Planning Group specialize in helping people sharpen the focus on their blurry financial picture. We evaluate a household’s spending patterns and income; we put together a budgeting plan to help people become intentional, to give every dollar a purpose. We enable these folks, who really shouldn’t have debt and savings issues, to get back on track and join the other two-thirds of their earning class towards financial peace.
If you are seeking financial peace (regardless of your income level), contact Isakov Planning Group today!