Making More Money but Feeling Broke?
Here’s Why

Does it seem like the more you make, the less you keep?
Here’s why – and what to do about it.

It’s probably a story you’ve heard before. You’ve got a friend whose star is on the rise. She’s hustled hard, leveled up her income, and things are looking up. Still, no matter her salary, she always seems to be struggling.

Maybe that “friend” is you. It happens to lots of us – our income increases, but we can’t seem to get ahead.

If you’ve ever found yourself looking at your bank account and wondering where it all went, this one’s for you. Here are three sneaky culprits that eat up your wealth – and how to fix them.

Inflation.

We’ve seen the world changing at the speed of light since the start of the

pandemic. Issues with manufacturers and supply chains have led to limited access to resources and rapidly rising prices. Everything from gas to groceries costs more these days, and even high-earners are feeling the pinch.

If you’ve noticed your designer bag getting a little lighter, you’re not alone.

Inflation rose by almost 7% in 2021 – the most its increased in (most of) our lifetimes. Prices on essentials like food and utilities have risen by 20-30% in some areas as a result.

Feeling the pinch? Find ways to put your money to work that will outpace inflation. While salaries aren’t keeping up with the rapid rise in prices, certain investments can help your grow your wealth. Don’t stress too much about inflation – create a plan to combat it.

Lifestyle creep.

For the average person, the more money we earn, the more we spend. It’s an easy trap to fall into because most Americans live paycheck to paycheck. Who want to stress about numbers and budgets once you get some breathing room?

There’s nothing wrong with creating a better quality of life as your income grows. Trouble starts if you aren’t strategic about our spending before you have money in hand.

If you anticipate an increase in income, decide how it’s going to be spent before you get the money.

Here at Bankable, we recommend that lifestyle spending increase by no more than 50% with each new raise or bonus. That means if your yearly after-tax income increases by $10,000, you should budget to spend no more than $5,000 more per year.

This way you’ll automatically save toward wealth building and ensure that you never end up wondering “where did all that money go?” again.

Taking care of everyone.

Remember the movie Soul Food? Terry, one of the main characters and a successful attorney, was secretly taking care of several family members and constantly being hit up for money. She isn’t the only one.

Young Black women across the country are often seen as the financial matriarchs of our families. Beyond taking care of our children, the responsibility to care for parents, grandparents, and extended family often falls to us by default.

Doing so makes it difficult for many high-flying Black women to build a financial foundation for themselves , let alone create wealth.

If you have a story similar to Terry’s, you must set firm financial boundaries. Create a budget, and include the maximum you can gift to family and friends. Stick to this amount no matter what.

Your financial health is as important as anyone else’s in your family.  It may be difficult to do, but saying “no” is a complete sentence. Start practicing now so you can heal your relationship with money, and give dependent family members the opportunity to do the same.

Have you ever felt broke while your income was rising? How did you overcome it? Share your tips in the comments.