As a society, we are somewhat intrigued with the anecdotal Joneses, and not only how to keep up with them, but in some cases, how to outdo them. Having a nicer car, a nicer home, and nicer belongings than our peers makes us feel like we are successful, like we’ve done well for ourselves. In spite of all of the old cliche sayings that tell us money doesn’t buy happiness, and that what truly matters are our life experiences, as opposed to our possessions, many of us still strive for wealth.
Why? Perhaps because having extra money provides a cushion, leading to increased comfort, stability, and security. This in turn makes us feel as though we do not have to worry about being deprived of any necessities. For many, a six-figure ($100,000) salary would be enough earnings to provide such a cushion. With the median household income being just over $50,000, many view a six-figure salary, which is nearly double the median, as a point of success.
Perhaps the allure of the $100,000 income results from the fact that only around one out of five American households have hit the six-figure salary mark, according to the most recent Census Bureau data. Or maybe it’s an idealized lifestyle people envision that comes along with such a salary. Whatever the reason, many people don’t realize just how easy it is to go broke, even with such a salary. A recent My Budget 360 publication examines this very topic, explaining real life data from California households. Based on this data and other supplemental information, here are a few ways to go broke on a six-figure salary.