3 Bad Habits From a Bad-Paying Job That Are Keeping You Broke as a Higher Earner
Written by
Laura Bogart
Edited by
Molly Sullivan
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For years, overworked and underpaid has been more than a snarky saying on a coffee mug, it’s been your reality. You’ve had to stretch mightily to make ends meet (and even then, sometimes they don’t connect) on a low salary. But after some hard work and luck, you’ve got a new job with a much higher salary. Congratulations are in order, but your bank account hasn’t gotten the memo yet.
Why are you still broke even though you’re a higher earner? The truth is, you’re still stuck in some of the bad financial habits from your recent past, when you had no money. It’s understandable and, fortunately, quite fixable, if you know the money mentalities to get over.
You Live Paycheck to Paycheck
Back when your pay was slim pickins, you had no other option than to live paycheck to paycheck. After you’d paid your rent and utilities, along with other bills, you barely had enough money left over for groceries. By necessity, you got in the habit of thinking in survival mode — and there was no room for saving money.
Perhaps you’ve never learned how to save, and the thought of trying now feels overwhelming. You’re on autopilot when it comes to spending every penny of your paycheck, so you keep doing that. Instead of a savings account, you have a house full of random stuff.
Writing for Experian, Emily Starbuck Gerson described why overspending without saving can keep you from achieving your financial goals: “Excess nonessential spending leaves less for essentials, like making housing and bill payments, reducing credit card debit, repaying student loans or saving for retirement,” she wrote.
In addition to broadening your financial literacy — if you’ve got a library card or time to listen to a financial podcast, it’s easier than you think — Gerson encouraged people to pause before they make nonessential purchases, asking first if they really need them.
You Get Too Reliant on Credit
When you were in a low-paying job, sometimes you had to rely on your credit card to make sure you ate or so your car could get those crucial repairs, even if you’d struggle to pay it back. Now that you’re earning more money, you figure there’s no harm in continuing to charge everything you can. After all, you’re good for it now, right?
Unfortunately, even high earners can succumb to the siren song of using credit cards excessively. It’s such a common problem that financial advisory firm Plancorp included credit card misuse in its list of bad money habits among high earners. Writer Kevin Daniel talked about the attitude that leaves people with a high income vulnerable to credit card debt.
“There is a trap-like nature to large, open lines of credit and high-income people aren’t immune to this form of debt,” he wrote. “In fact, it can become more dangerous because high earners tend to believe they can easily make monthly payments not understanding quite how much debt has racked up and how compounded interest weakens each payment.”
You Don’t Hire a Financial Planner
With a paycheck that contained fewer commas, you probably thought there was no point to hiring a financial advisor. What were y’all gonna review, the moths floating out of your wallet?
You didn’t know that finding a good financial advisor can benefit everyone, of all income levels. Now you do.
Working with a financial advisor can help you define and achieve your financial goals — which, by the way, often align with your life goals. You can learn how to pay down debt while saving for retirement and a downpayment on a new car. Build a budget that lets you enjoy the fruits of your labor as you stock up your emergency fund, which will keep you secure well into your future.
Bottom Line: You may have escaped your low-paying job, but you haven’t yet escaped the money mentalities that haunted you when you, well, didn’t have any money. As your income grows, it’s time to revisit some habits that no longer serve you and seek out experts.
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