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Breaking the Paycheck-to-Paycheck Cycle: Strategies for High Earners

Breaking the Paycheck-to-Paycheck Cycle: Strategies for High Earners

February 20, 2024

The highly sought-after six-figure salary isn’t what it used to be. Time Magazine reported a startling statistic from a survey conducted by the financial insight and advising companies PYMETS and Lending Club which found that 51% of people earning more than $100,000 reported living paycheck to paycheck.

When they explored over 70 cities and how far $100,000 goes after taxes and cost of living adjustments, they found significant differences in the value of $100,000. In the pricier cities, $100,000 is equivalent to the take-home pay of about $35,791 in New York and $44,307 in Washington D.C. On the other end of the spectrum, in Memphis, Tennessee, $100,000 is equivalent to around $86,444.

Regardless of where you live, here are a few simple tips you can embrace to try and mitigate the dependency of living paycheck to paycheck as a high earner:


Create a budget

You may feel like you don't need a budget if you earn a high income. Being honest and keeping a detailed budget can help you pursue your financial goals. Here are a few steps you can take to help organize your budget:

  • Make a list of your expenses.
  • Identify your monthly income from your job and any side hustles or investments.
  • Calculate the difference between your income and expenses.
  • Determine if there are any expenses you can cut or modify to save money.
  • Create a list of manageable goals to work towards.


Manage your spending

Keeping track of your spending can help you monitor how much money is going out compared to how much money is coming in. This might be one of the most difficult aspects of financial planning. Consider these tips to help you manage your spending:

  • Try living within or below your means.
  • Focus on buying only what you need.
  • Before going to the store, make a list to help prevent frivolous spending.
  • If you feel a need to spend more on lavish things, ask yourself what is it that is compelling you to purchase these things? If you can identify the root cause, you can work on modifying your spending habits.


Save up for big purchases

Consider saving up for big purchases instead of acquiring more debt.


Manage your debt

Debt can be overwhelming and challenging to get on top of. At times, it might seem suffocating, so if you have unwanted debt, consider working to pay it off steadily and avoid acquiring more. There are common strategies people often use to pay down debt. The three most popular methods include:

  •  Debt avalanche approach – You pay the debt with the highest interest rate or largest amount first, as fast as possible, while paying the minimum on the other debts.
  • Debt snowball approach – You pay the smallest debt first, as fast as possible, while paying the minimum of the other debts.
  • Debt consolidation – Combine loans into a single payment.


Consult a financial professional

Creating a comprehensive budget, paying down debt, understanding the root causes of why you are spending (especially if you don’t necessarily need to buy certain items), and how to reel in your spending can be complex and difficult to manage. Consider consulting a financial professional who can help you design a strategy and create financial goals to help you work towards breaking free from the paycheck-to-paycheck cycle.



Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by LPL Marketing Solutions



People Making Six-Figures Are Living Paycheck-to-Paycheck | Time

How to Budget With a High Income - Experian

How to Make a Budget: Your Step-by-Step Guide - Ramsey (

Five Financial Strategies for High-Net-Worth Individuals | Kiplinger

Inside the Psychology of Overspending and How to Stop | Personal Finance | U.S. News (


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