How To Stop Being Broke With A High Salary

This post may contain affiliate links. See footer for additional information.

The cycle goes something like this. Money comes in, money goes out, and round and round we go. If you’re making a healthy salary and you’re still coming up short at the end of each month, there’s a problem. The problem is that you’re making too much money to be broke. Yet here you are…broke, nonetheless. I’m going to let you in on a little secret, broke is normal. So don’t worry, you’re normal. Yay! But wait, who wants to be normal?! You obviously don’t, or you wouldn’t be here. Let’s face it, that high salary wasn’t just handed to you overnight. You worked for it. Now, let’s figure out how you can go from broke to no financial joke in one blog post.

Broke Is Normal


If you have a high salary and you still find yourself broke with more month than money, you have a big problem. You can fix it by...

Pin Me!

High salary or not, look around you and you’ll likely see your friends buying bigger houses, new cars, and subscribing to HDTV cable packages. Along with that goes new clothes, dinners out, big mobile phone bills, traveling sports teams for the kids, and extravagant summer vacations. In order to keep up with this kind of lifestyle, even for high-salaried couples, you’re probably going to be broke.

Of course, I understand high salary is relative. Even if you are on the upper spectrum of high salary, unless you’re pulling in celebrity cash, you’re still going to be broke. Why? Because you’re just going to buy even bigger houses, better cars, and even more lavish vacations. It’s all relative.

At the end of the month, if you’re not able to save a significant portion of that high salary, you’re teetering on the verge of financial destruction. You might even benefit from a financial intervention. See more about those here!

It’s really simple to figure out if you’re broke. Subtract all of your monthly expenses from your monthly income. If you’re negative – you’re broke. If you’re close to negative – don’t get excited – you’re also broke! There was a wonderful book written by Thomas J. Stanley, PhD, titled, Stop Acting Rich. You might want to read it.

Related: 13 Easy Tips To Take Control Of Your Money

Don’t Be Normal


Most normal people will live at their level of income – or beyond it. If you’re consistently finding yourself with more month at the end of your money – you’re spending more than you earn and you need to fix it. Fast. In fact, you might not even realize you’re spending more than you earn. Oftentimes, it can take years (seriously, years) to have it catch up with you. Monetary gifts from mom and dad, tax refunds, and annual bonuses have a tendency to mask financial problems.

Besides, why should you care that your credit card is up a few thousand bucks – mom and dad always give you $5k for the holidays anyway. But, what if they didn’t? What if mom and dad decided to buy you some new furniture this year? What if you didn’t get the $5k you were counting on? It happens. And when it happens to you, you’ll realize you’re spending more than you make. #StopIt

Why does everyone want to be an individual, except when it comes to their money? When it comes to money, it seems like everyone wants to live a robotic existence – buying the same houses, the same cars, the same clothes, the same everything. What happened to individuality when it comes to money? If you want to show off your individuality, stop doing what everyone else does. If you employ this strategy with your money, you’ll be trading your day job in for margaritas on a beach in no time.


How To Stop Being Broke With A High Salary


palm tree

Go relax and live happily ever after.

The quickest fix to stop being broke with a high salary is to Live Below Your Means. It’s the oldest wealth-building secret in the book, and yet it escapes most of us. Believe me, my husband and I are the exceptions, but we weren’t always. We used to do the same things everyone else did. We bought the houses, the cars, the clothes, and the HDTV packages. Check out all our mistakes before we became early retiree enthusiasts!

Here’s a quick and dirty tip list of things you can do today to stop being broke:
  • Figure out where your money is going
  • Analyze your spending – we use Personal Capital to track our money – it’s FREE!
  • Stop wasting your money 
  • Create a budget
  • Stick to your budget
  • Invest the difference
  • Live stress free and happily ever after

If you make too much money to be broke, you might want to take a quick inventory of what’s coming in and what’s going out. Chances are, you’ll be able to make a few modifications TODAY that will save you hundreds, if not thousands, every month. Once you get the financial ball rolling, keep it moving by making more modifications to your monthly habits.

Eventually, you might even find yourself staring down the possibility of early retirement. You might not be on par to retire in your 30s, but early retirement at any age is quite an accomplishment. You’d be surprised how quickly couples with high salaries can build wealth, especially when they stop being broke and start living below their means. You can do it, too. Be an individual. Go against the grain. And wonderful things will happen.

Have you ever realized you were spending more than you were earning? How did you turn it around?


Like It? Share It!

Comments on this entry are closed.

  • Melanie May 23, 2017, 1:18 am

    Growing up, I was always self conscious about money and I learned how to manage my money a lot better than my parents did. The thing was, my parents were both immigrants and had filed for bankruptcy at one point in their lives. Being the oldest sibling, I learned by what I saw.

    I learned to live below my means never got myself into a lot of debt.

    • Mad Money Monster May 24, 2017, 12:17 pm

      Wow! I’m glad you were able to learn from your parents’ experiences. Too often, kids will repeat the same patterns, good or bad. Congrats on taking the road less traveled 🙂

  • Lily @ TheFrugalGene May 11, 2017, 7:10 pm

    I grew up thinking everyone must be wealthier than me (they had better things than me, that’s for sure) and then as you get older you learn about credit and personal loans…all so disillusioning. Broke is normal? That’s too depressing!

    • Mad Money Monster May 11, 2017, 7:42 pm

      It is depressing. But, it’s true. Ugh. Good thing we don’t want to be normal 😉

  • High Income Parents May 10, 2017, 11:34 pm

    “Don’t be normal”
    That is exactly right. If other high income earners are anything like me, you tend to congregate and then the big spenders try to influence the more frugal of us. It makes it that much harder, but it just goes to show that we need to choose our friends wisely.
    That has helped me keep the spending down with good friends giving sound frugal financial advice.

    Tom @ HIP

    • Mad Money Monster May 11, 2017, 7:39 pm

      Surrounding ourselves with people that are like-minded is worth its weight in gold on this journey!

  • Ryan @ Just Another Dollar May 3, 2017, 12:53 pm

    We’d been living above our means for two years after college graduation and felt pretty comfortable on our $110k combined income. Our realization came when we had two months without income after moving to Colorado and our debt ballooned. We completely changed the way we use our income and are now putting over 50% of our income toward debt reduction and retirement savings.

    • Mad Money Monster May 3, 2017, 12:58 pm

      Congrats on the high rate!

  • Anonymous May 3, 2017, 12:49 pm

    We’d been living above our means for two years after college graduation and felt pretty comfortable on our $110k combined income. Our realization came when we had two months without income after moving to Colorado and our debt ballooned. We completely changed the way we use our income and are now putting over 50% of our income toward debt reduction and retirement savings.

    • Mad Money Monster May 3, 2017, 12:52 pm

      That IS amazing! Socking away 50%, whether it to to debt or investing, is something most people can only dream about. Nice work!

  • Dividend Daze May 2, 2017, 11:58 am

    I agree that living below your means is key. It is about monitoring cash flow. If you have more cash going out than coming in, there is a big problem. But if you can cut out those financial bottlenecks that drain you cash flow, savings will start being built up. As long as those savings are not being squandered on the fancy life style, anyone can pull themselves out of debt or become financially stable and not “broke.” Thanks for sharing.

    • Mad Money Monster May 2, 2017, 12:00 pm

      Thanks for commenting! Living below your means is key! Coming from someone who has lived on both sides of the equation, I realize just how important cutting back on lifestyle is to reaching financial freedom.

  • Dads Dollars Debts May 2, 2017, 12:15 am

    Broke is normal and painful. Even for us high earners. Trying to prevent lifestyle inflation is key. My wife and I work towards this every day and yet some months find us breaking even or worse…this month is a low spend month so we will see where it goes.

    • Mad Money Monster May 2, 2017, 9:30 am

      It is definitely a struggle to keep expenses in check and live below our means. The world makes it very easy to spend, spend, spend.

  • Steve D Poling May 1, 2017, 5:08 pm

    A certain mustachioed financial blogger speaks of “hedonic adaptation” which is something everyone needs to actively resist. Lifestyle creep will make you a pauper as sure as anything. The best way to get un-broke is to regard luxury as weakness and develop some personal grit.

    • Mad Money Monster May 2, 2017, 9:29 am

      Yes! I believe I know who you’re referring to 😉

  • Erik @ The Mastermind Within May 1, 2017, 2:06 pm

    I’m experiencing lifestyle inflation right now… I’ve been more loose and free with my cash when going out to eat. I’m going to compile my April 2017 financials to see how I did in April, though right now, I’m a little worried… (still will have saved at least $1.5k, but I need to stay consistent)

    • Mad Money Monster May 1, 2017, 2:38 pm

      That’s why this community is so awesome! We all motivate each other. We also ebb and flow – but interacting with other PF bloggers makes us more consistent!

  • Ty Roberts May 1, 2017, 10:15 am

    I used to think that I worked so that I could buy nice things and “enjoy life.” Losing my job finally woke me up and forced me to change my ways. Today I still go to work so that I can “enjoy life” but I’ve realized that happiness doesn’t come from stuff – for me it comes from having the freedom that money buys.

    • Mad Money Monster May 1, 2017, 10:43 am

      Cheers to that! I was in the exact same boat. These days, I get way more excited about having a few extra dollars to invest in my total market index fund than buying a new pair of shoes. I love the transformation!

Show Buttons
Hide Buttons