Six Figures & Broke

As an accountant, I see various income levels…and the personalities that go along with them.

There’s the hardworking class:

These are the individuals who makes $50k or families who earn less than $100k. They have respectable retirement accounts, a cushion of savings and an affordable mortgage. Some have children and are diligently socking away what they can in the 529 plans. Some have investment properties or side jobs to supplement their income. They are chugging along in life, doing just fine. Happy with what they have and thankful for my help.


The pensioners:

They worked as teachers, police officers or were in the armed guards. They rely on their monthly pension as well as social security.  The majority have their houses paid off and a lucky few have vacation properties. They are enjoying the fruits of their labor – and rightfully so. They are always concerned they will owe each year but usually they withhold enough from their withdrawals where they don’t. They did everything right to get them where they are today


The Social Security retiree’s:

These folks make me sad. They may have worked hard throughout life, possibly earning a decent living but never saved for retirement. Their sole source of income is the social security they receive. Oftentimes we do their children’s tax returns and they seem to be following in their parents footsteps. They still live at home, do not have health insurance and are just scrapping to get by. Oh how I want to shake these kids and tell them to wake up. Open an IRA! Plan for retirement. WANT MORE.

businessman fashion man person

Photo by Stokpic on

Then there’s the six figure earners:

Hard workers for sure! You can’t be high earners without busting your ass. Many have children and are socking away money religiously into 529 plans, saving for retirement and donating thousands to charity. They may have big houses but seem to be living within their means. It’s a delight to see people on the path to financial freedom – all while taking care of their own and the community. It’s a goal of mine to be these people (minus the big house!)

But then there’s the other side of high earners. Those individuals who make BANK, argue about my invoice, the amount they owe the IRS/State or if they are getting a refund then they complain about how much they are getting back. They make so much money but don’t have two dimes to rub together. Oftentimes, they can’t pay what they owe.


Sure, some live in expensive parts of the country. Rent and housing costs are sky high which eats away at a good chunk of their income. Some living in major cities are spending more on their kids education too.

But what about those who spend their paychecks on dining out, high end wardrobes, costly homes, electronics and exotic vacations?

If only they could see their financial future the way accountants and financial advisors can. It doesn’t end up well. Yes, you may keep earning higher incomes but what if you lose your job? What if your occupation becomes obsolete? What if you fall ill and can’t work anymore? You have nothing to fall back on. Nothing saved. Then what? It can ruin you. The clothes in your closet won’t get you out of a financial mess.

If I’m describing you, here are some ways to turn things around.

  1. Find a financial advisor to get you on track. Many don’t charge a fee for consultations. It can’t hurt to sit down with a professional and lay it all out on the table for them.
  2. Open a 401(k) at your company and contribute up to the company match.
  3. Open a Roth IRA and save, at minimum, 10% of your income.
  4. Do you have consumer debt (credit/car loans)? Start chipping away at the one with the highest interest rate.
  5. Open a high interest savings account or Money Market and start direct depositing money into it monthly. You can start out small and gradually increase it.
  6. When you receive a bonus or raise, immediately transfer it into your savings account. Out of sight, out of mind. The same goes for a tax refund, inheritance or other windfall of money.
  7. If you’re living in an apartment in a high cost area, MOVE. I know, I know. You’re giving up a major part of your lifestyle. But it will be worth it in the end.
  8. If you live in a house that’s bigger than what you need or with mortgage payments that are too high, MOVE. Stop keeping up with the Jones’. I look at people buying large homes as a complete waste. You have to spend the money to furnish and heat/cool it. Not to mention clean it! Oh you don’t clean it? Fire your cleaning person and start scrubbing the floors yourself!
  9. If you gamble or bet on the big game, STOP. I can’t think of a bigger waste of time or money. I have seen families destroyed over gambling addictions. It’s sad to see what length people will go to double their money or make back what they’ve lost.
  10. Stop buying the latest fashions. Buy well made, classic pieces and sell off the rest.
  11. Start going through items in your house that you don’t use or wear and sell them. You’ll be amazed at what people will buy. The money you make should be deposited into your savings account. OR keep it in your paypal account and when you feel the urge to splurge, take the money from there.
  12. As much as I hate to type this one, avoid vacations. If you can’t, be budget minded when planning and start putting a little away a month towards the trip.
  13. Learn to cook and stop eating out so much. It’s not only good for your waste line but even better for your budget.
  14. Cancel all unused subscriptions – gym, netflix, hulu, cable.
  15. Stop buying books! The library is free people!
  16. Downgrade your high speed internet. Do you know that the majority of us are overpaying for faster internet when our area might not support such high speeds? A lovely customer service representative let me in on that information. Don’t believe me? Have someone come out and test the best speed for your home. Don’t fall prey that you need faster speeds in order to stream multiple devices. If you find that your devices are buffering or are slower then maybe bump it up. But try it at a lower speed first and see how it shakes out. You may be surprised.
  17. If you live in a good school district, stop sending your kids to private school. Believe me, I understand the difficulty in making this decision. We send our 3 year old to a very family oriented Catholic School for pre-school and next year for Pre-K. I would LOVE to send him there from Kindergarten and beyond but we live in a top rated school district. It’s impossible to justify spending the extra cost.
  18. Pack your lunch and meal plan your dinners. This helps cut down on dining out for convenience.
  19. When traveling, rent an apartment or efficiency so you can save money on dining out. Pack snacks too.
  20. If you have children, don’t buy new – especially when they are young. They won’t know!! Consignment and yard sales are a parents best friend. Utilize them.
  21. Use what you have. You know all those shampoo/conditioner, face wash, bath soaps, makeup, lotion, etc. USE IT ALL UP before you buy more. The same goes for candles, spices, pasta, coffee, tea, over-the-counter medicine, napkins. Think of all the clutter free drawers you will have.
  22. Cut back on the booze. I know, this may be challenging for some. But the high end bottle of red, top shelf liquor or the micro-brews could be creating a financial hangover (see what I did there). So, scale back to weekend or special occasion only drinking.

As I come across more, I will continue to update.

Tell me,

What are your tips? Comment below!