In my experience, when people cross $150,000 of income, they stop carefully tracking expenses
(This is fine! At $150K, you can loosen up. You don't need to track the price of a pack of gum.)
However, here are the 3 problem areas I see for expenses above $150K income
1. They’re spending more but STILL stressed out about money! This is because most people don’t save & invest based on percentages. If they saved $700/month before, they don’t adjust their savings rate to be higher. It should! If you track your expenses by %, you’ll be able to save more, invest more, & even SPEND more
2. Because they stop tracking, their costs increase substantially on eating out and travel. I’ll ask them about travel. Their response: “It’s not like we travel all the time!” But if they dig into actual spending, they took 6 vacations, including mini-trips, and because they make more, they didn't track spending on any of them. These add up.
3. They almost never stop to celebrate and decide what their new Rich Life is. $150K is a lot of money! Do you still want to eat at the same places? Do you want to spend more on a new car, or tip 25% everywhere, or save for a special anniversary trip? Most of us simply "slide" into the next phase of our financial lives without taking a second to stop, appreciate, and plan what our next chapter of our Rich Life is.
If your income has increased beyond $150K, what do you notice happened with your spending?