Reaching a six-figure income is a major milestone. Congratulations! It’s a moment worth celebrating, but it’s also a critical turning point for your financial life.
Many people assume that earning more money automatically means fewer financial worries. In reality, a large percentage of Americans who struggle financially are actually in higher income brackets. The difference isn’t how much they earn, it’s how they manage it.
If your income has recently crossed the six-figure mark, here are a few smart moves to help you make the most of it.
A higher income often brings new goals, and new temptations. Take time to review your budget and adjust it intentionally. This is your opportunity to prioritize what matters most, whether that’s saving, investing, or planning for long-term goals.
Be careful not to let lifestyle inflation take over. Just because you can spend more doesn’t mean you should.
One of the most effective ways to improve your financial health is to eliminate bad debt. Focus on paying down high-interest balances, such as credit cards, as quickly as possible. Reducing interest payments frees up cash flow and puts more of your money to work for you.
An emergency fund is a cornerstone of financial stability. Aim to save enough to cover three to six months of living expenses. This cushion can help protect you from unexpected events like job changes, medical expenses, or economic uncertainty, without derailing your long-term plans.
As your income grows, so does the complexity of your tax situation. Higher earnings can mean new tax brackets, phaseouts, or additional tax considerations. Reviewing your tax strategy now can help you avoid surprises and identify opportunities for smarter planning.
It’s never too early to think about retirement, and higher income gives you more flexibility to do it well. Increasing contributions to retirement accounts or exploring additional savings strategies can significantly impact your future wealth thanks to the power of compound growth.
Earning six figures is an exciting achievement, but it’s not the finish line. With thoughtful planning and smart financial decisions, this milestone can become the foundation for long-term security and growth.
The key is simple: manage wisely, plan intentionally, and make your money work for you.
If you’d like help reviewing your budget, tax strategy, or long-term goals, our team is here to help.
Associate Partner
In Kelly's 30+ years of accounting and tax experience, she has worked with many closely-held businesses and business owners in the real estate, retail, professional service, not-for-profit, and agricultural industries.
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