You have a high income, so why don’t you have any money?

I debunk the myth that there is a correlation between earning a lot of money and having a lot of money, because it isn’t always true.

Isn’t it amazing the vast disparities in income?

I know someone who pulls in around $60,000, which is, at this point, not too far from the medium household income for the U.S. I know someone else who makes three times that.

Is the second person three times as important as the first? Three times as valuable?

Clearly not.

But wage disparities aside, some people make a good income these days. They probably don’t start out like that, but they grow their earnings over time.

And once you start making big bucks, there can (depending on your money attachment style) be a sense that you’ve got nothing to worry about.

After all, since you remember what it was like to not make money, and how you needed to stretch to make ends meet, you clearly don’t need to do that anymore.

And yet, something I see over and over with people who have a large income is that they find that they have little to show for it. Just like when they were making very little, they have no money left at the end of the month.

How can that be?

If this sounds like you, read on.

Money expands

If there’s one thing I’ve learned in my years of working with clients with their money issues (as well as working on my own), I’ve learned that money expands to fill its container.

That means that, without you even trying, any money you have can easily be spent.

Small wallet, small expenses; large wallet, large expenses.

There are some practical reasons for this. When you have more money, you have more options.

  • Instead of buying cheap jeans, you could buy expensive ones.
  • Instead of buying one beer when you go out, you could buy rounds for the table.
  • Instead of buying a coach ticket, you could splurge for first class.

You don’t have to do any of these things, of course, but the more money you have means that there is less pain per dollar spent. $100 may seem like nothing, whereas $10 used to feel like a lot.

When it feels easy to spend, you end up spending.

Money can feel infinite

I have a vague memory of hearing about some indigenous tribe who had no word for anything greater than two. It was “one”, “two”, “many”.

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I don’t think it was actually true, but it’s a great story. And for some, that’s how money feels.

As in, you feel like you have a little bit of money, enough money, or infinite money.

What I mean is, after a certain point, the amount of money you make can seem so big as to feel infinite. It’s never that explicit, of course, but I bet that for some of you high earners, you’ve probably had the experience of the money coming in faster than you can spend it.

This experience is fleeting; you can always spend the money you make.

But because there is a certain limit beyond which we may not be able to really internalize (feel, understand) the amount of money we’re making, that it can feel like your money is unreal.

And it’s no surprise that when money feels unreal, that you can easily spend as much or more than you make.

Money runs away

When you have a smaller income, you may feel like you have to track every penny, lest you run out of money.

When you have a high income, you may feel like you no longer need to do this.

And you would be wrong.

Everyone needs to track their spending, no matter how much you make.

The reason for this is straightforward: intentionality. You want to choose what you spend money on, and make sure that it aligns with your values and desires. And you have to know what you spend money on to do that.

If you don’t track your spending, your money will run away.

Those with high incomes sometimes need to learn this the hard way. After a few years of high income, but with nothing much to show for it (or worse, nothing but debts to show for it) this can be a hard lesson.

You can take control

With a high income, you have a huge opportunity. Even for those who live in really expensive places like the Bay Area, there comes a point beyond which your income isn’t necessary to fund your life. There is extra money.

So how do you find that extra money, when you feel like there isn’t any?

You make a plan.

Not from scratch of course. It’s silly to download someone else’s budget template and say, “it tells me I shouldn’t spend any more than $500 on groceries“. Your situation is your own.

So start by tracking what you spend. Do it for an entire month. Use my worksheets if you’d like.

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Then take a good look at what you did, and decide if it’s what you want to do.

Make small changes at first. Go from wondering where your money went to deciding where it goes.

Your unique challenges

What’s the difference between someone who earns $50k a year and spends $50k a year versus someone who earns $500k a year and spends $500k a year? Nothing at all.

In many ways, the challenges with having a high income aren’t any different from having a lower income. Money will still escape if you’re not watching it.

But there are some unique challenges to higher earners, mainly coming from the increased options to spend (and potentially pressure to spend) that you have.

I work with high income earners (such as those who work in tech) to help you get more for your money.

Because, let’s be honest: what’s the difference at the end between someone who earns $50k a year and spends $50k a year versus someone who earns $500k a year and spends $500k a year?

Nothing at all.

Stop wasting your money. Make a plan. I can help.

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