A Good Salary May Not Equal Financial Security

If you haven’t developed good money habits, even with a good salary you could still fall behind on your bills and on meeting your financial goals.

The reason is that the average person would typically see their living expenses go up as their income goes up. You want to live in a bigger apartment, eat at fancier restaurants and holiday in more exotic places.

So even though their income may have gone up by 2x, their expenses go up by 2x or even higher. As such their savings rate doesn’t really go up or even goes lower.

A good salary is only part of being financially secure. In addition to the good salary, you must have clear structures around your money – outline and create a plan for paying off debt, building an investment portfolio, building an emergency fund, or buying a home.

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