#incomes #SixFigureIncomes #inflation #FinancialProblems #MoneyManagement
Yes, it’s possible that a couple making a six-figure income together can still have financial issues.
Nedra Rhone, “This Life” columnist for The Atlanta Journal-Constitution discussed this in a column published June 23, 2022.
Rhone says many people believe that anyone making six figures a year with financial problems have money management, not money, problems.
But as rents skyrocket and prices for gasoline and other goods rise to levels not seen in decades, it is possible for two people making a combined, six-figure income to have trouble making ends meet – never mind saving for the future.
Some decades back, a young couple just starting out in life might have thought that if they could just make $20,000 a year together, they would be OK.
Inflation has kicked that goal up fivefold, or more.
As Rhone points out, it’s great to teach kids, and young adults, good money management skills. It takes some discipline to watch what one spends money on. And, certainly, we all can improve our money management skills.
But, the lesson here is that costs of living can’t keep rising without some, if not everyone, feeling the pinch.
Food, shelter, clothing, energy etc. are all necessary for living and working. People certainly can cut out frivolous expenses, unnecessary trips etc. But everyone has to eat, have a roof over his or her head, drive to work etc.
Some recent trends are helping. For example, more people are working from home. That saves on energy, clothing and, perhaps, some food costs.
But, not everyone can work from home. In fact, it can be assumed that the less money you make at your job, the less ability you may have to work from home. Trades people, hospitality workers and others have no ability to work from home.
Fortunately, the world economy works in cycles. That means prices won’t stay at these levels forever.
Much of the high-price trends have to do with pent-up demand after pandemic lockdowns. More people are working than there were two years ago.
Wages are trending up, but many are no better off because of that pent-up demand. Some economic sectors are still having trouble filling jobs, even with offers of more pay and, perhaps, benefits.
A narrative is circulating that government policy is the prime driver of the inflation we are seeing. In reality, there is very little that can be done by government at any level to make a real dent in inflation.
The couple in Rhone’s column could look for a cheaper apartment. Those are hard to find in most areas. In fairness, landlords have had trouble the last two years getting tenants to pay rent on time because the pandemic cost the tenants their jobs temporarily. These landlords, along with retailers and other merchants, are trying to recover some of what they lost.
Rhone’s point in her column was not to criticize others’ financial situations. Don’t try to put a simple solution on a complex problem. Chances are, if you were in the shoes of the six-figure couple, you probably would face similar problems.
Times are tough for most of us. It’s time we all be less critical or judgmental of others, and more sympathetic and helpful.
Peter