Many people who earn a good monthly income have fallen behind on their essential bills – rent, electricity bills, mortgage payments and others. With the pandemic, people are having difficulty with everyday costs and even high-income earners are straining to pay their monthly bills.
Steer away from overspending
The rise in everyday expenses is threatening the long-term financial health of many. There are about 5 money mistakes you might make and overspending is number one and not saving some of what you earn another.
PersonalMoneyStore not only offers sound advice on how to manage your income well, they also recommend reputable lenders. Anyone wanting to make a fresh start with their finances can get a quick loan, pay off some debt, cut up their credit cards and break the culture of living on credit.
By paying off debt with the money, you can make a new start free of relentless creditors who keep phoning and messaging.
Salaries aren’t keeping up
There was a time when wages kept up with rising costs. The cost of living is outstripping salary increases. Many people are being told no salary increases and no bonuses this year.
People lived lavish lifestyles, they had good health care and had 3, 4 or 5 children. Now the children are teenagers and the high cost of education and medical costs are why so many people earning a good monthly income are living paycheck to paycheck. These days a 6-figure income doesn’t always spell financial security.
Debt
Debt is why many high earners are battling to pay their bills. High-income earners used to living the good life like spending money as if their salary was triple its actual amount. The Federal Reserve Bank of New York tells us that in the first part of 2019, total household debt reached $14.15 trillion, with most of the debt being mortgage-related and also student loans.
Many people don’t take time to realize that you pay a price for the debt. That price is the high interest you pay and of course, the higher the interest rate, the more you have to spend on your debt. Also, the longer you take to pay off your debt, the more interest you pay. Getting out of debt starts with you eliminating the things that got you into debt in the first place.
Credit cards
Credit cards always come into the picture but that's because they have a good side under the right management, but a dark side too. Even high earners are racking up debt because of poor credit card spending habits.
Credit cards are a growing problem for everyone, and Americans have billions of dollars in credit card debt. Not many cardholders are able to pay their balances in full at the end of each month. If you do research, you will discover that those with a net worth of $100,000 or more are the ones battling to pay their credit card debt.
The quicker people realize that they can’t finance a lavish lifestyle with credit card debt because of risking their financial stability, the better.
A high cost of living
Earning a high salary doesn’t mean you have to live the high life. If there’s one positive thing that Covid-19 has taught us, that living an expensive lifestyle isn’t what’s important, but survival is. The value of homes has increased ridiculously and purchase and rental prices are eating up a person’s entire salary.
Why not move to a smaller home? Paying less for a smaller home can free up more money for medical care, for your child's education and for less stress as you can start paying off your bills and get rid of some of your debt.