Suze Orman Shares Why People Making $100k End Up With Less Money — 'The More Money You Make, The More Money You Spend'

Suze Orman, the financial guru, sheds light on a surprising reality: even six-figure earners can struggle financially. 

A study conducted by SecureSave revealed that 35% of employees with annual earnings of $100,000 or more are living paycheck to paycheck. Additionally, the research uncovered that 64% of individuals in this income bracket experience financial stress severe enough to affect their productivity at work. 

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Orman, co-founder of SecureSave, commented on these findings, describing them as "absolutely fascinating," in an interview with GoBankingRates.

In the interview, she said the primary reason many high earners find themselves in this situation is due to increased spending habits. "The more money you make, the more money you spend," she notes. This lifestyle inflation is particularly prominent among those who feel pressure to uphold a status that matches their income. 

Orman, who is also the host of the "Women & Money" podcast, stresses the importance of living below one’s means, a principle she recently discussed on CNBC. "You have got to live a life below your means but within your needs," Orman states, emphasizing that this is feasible regardless of one’s bank account balance. This approach involves spending less than one earns, thus freeing up funds for important financial goals such as paying off debt, creating an emergency fund, and saving for retirement.

Addressing those who struggle to make ends meet despite earning more, Orman believes the first step is to rigorously examine and trim unnecessary expenses. She challenges the common expenditures many consider minimal, such as occasional dining out, urging individuals to consider whether each expense is truly a need or merely a want.

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To further enhance this strategy, Orman advocates for automating savings to ensure money is allocated to savings or retirement funds before it can be spent elsewhere. She emphasizes the psychological shift needed to view saving as equally rewarding as spending. "If you love saving as much as you love spending, I’m telling you, you will not be living paycheck to paycheck," she asserts.

By adopting a disciplined budget, cutting unnecessary expenses, and focusing on saving, Orman believes that anyone can achieve financial stability and escape the paycheck-to-paycheck cycle. Her message is clear: with determination and the right strategies, financial independence is achievable for everyone.

While Orman emphasizes curbing lifestyle inflation to achieve financial security, some argue that this approach can be overly restrictive. They point out that income growth can also lead to a higher standard of living without necessarily causing financial stress.

Some also argue the ability to afford occasional splurges can contribute to overall well-being. 

Suze Orman’s advice offers valuable insights into managing finances, but for a more personalized approach, consulting a financial adviser can be beneficial. They can help you craft a budget, set up a savings plan, and make investment decisions aligned with your goals. An adviser can also provide expert guidance and keep you accountable, especially if you’re struggling to break free from living paycheck-to-paycheck. 

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*This information is not financial advice, and personalized guidance from a financial adviser is recommended for making well-informed decisions.

Jeannine Mancini has written about personal finance and investment for the past 13 years in a variety of publications including Zacks, The Nest, and eHow. She is not a licensed financial adviser, and the content herein is for information purposes only and is not, and does not constitute or intend to constitute, investment advice or any investment service. While Mancini believes the information contained herein is reliable and derived from reliable sources, there is no representation, warranty, or undertaking, stated or implied, as to the accuracy or completeness of the information.