Why are so many people who make $100,000 per year not feeling 'rich?'
The fact that it's so common for people in the U.S. to make six figures, technically be"upper class," and yet still feel precarious is not just a case of big spenders mismanaging their money. The cost of living in coastal cities like D.C., where a lot of high-paying jobs are located, can feel staggering. So can the burden of student loans, which workers often need to take out to qualify for high-paying jobs in the first place.
How far your dollar goes depends in large part on your cost of living, which varies depending on factors such as lifestyle, household size and, especially, location. You don't have to be an economist to know that earning $100,000 in New York City is different than earning $100,000 in Memphis, Tennessee.Because Tennessee doesn't tax earned income, a Memphis resident earning $100,000 takes home $74,515 after federal and state taxes,.
is lifestyle creep, the phenomenon by which your non-essential expenses tend to rise with your income. It's hard to avoid, says Brad Klontz, a CFP and financial psychology professor at Creighton University. That can lead to people erasing the potential for extra savings in one fell swoop, says Whitsit."People get a $10,000 raise and think they can go out and buy a boat," he says."I advise clients to wait six months after a salary increase or a nice bonus before buying anything big."
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