Why High-Income Earners Still Often Feel Cash Poor

Written by Lance Swansbra

It doesn’t make sense! You earn good money, sometimes very good money, yet your bank balance doesn’t seem to reflect the effort you put in. You might even look around and wonder how people earning far less seem more relaxed with money than you are. 

This is far more common than most people realise. At Braeside Wealth, we see many high-income earners who feel they should be much further ahead. They are working hard, earning well, but not gaining traction. It creates stress, guilt and a sense that they are missing something that everyone else has figured out. 

The reality is that feeling cash poor has very little to do with what you earn and almost everything to do with how your life and finances are structured. Here are the main reasons high income earners find themselves in this situation, and the steps that can turn it around. 

1. Lifestyle creep happens quietly and fast 

When your income rises, your lifestyle usually rises with it. It is rarely intentional. It is small decisions that slowly stack up. 

You earn more, so you buy better quality. You upgrade the car. You renovate earlier. You order Uber Eats on nights you would have cooked when money was tighter. You take nicer holidays. You pay for convenience because you are busy. You send the kids to the school you feel you should. 

None of these choices are wrong. But together, they raise your baseline cost of living dramatically. What used to feel like a luxury eventually feels normal. And once something feels normal, it is very hard to wind back. 

For many high-income earners, if their income dropped back to their level from ten years ago, their current lifestyle would be impossible to sustain. That means the margin for error disappears. It creates pressure, even when the headline income looks impressive. 

2. Tax quietly eats a huge chunk of every pay rise 

Most high-income earners underestimate how much tax shapes their cashflow reality. Once you hit the top tax bracket, almost half of every extra dollar earned disappears before you even see it. 

People speak about a salary increase of $20,000 or $50,000 as if that money flows into their pocket. In practice: 

• A $20,000 raise usually becomes about $11,000 after tax. 
• A $50,000 bonus might only land as around $27,000 in your account. 

When tax absorbs such a large share, it is easy to feel like your income is rising but your available cash is not. 

This is also where poor tax planning hurts high income earners the most. Without smart structuring, you can easily end up paying more tax than you need to, leaving you feeling even further behind. 

3. Big financial commitments stretch cashflow more than expected 

High income households usually carry high fixed expenses. These often include: 

• larger mortgages 
• private school fees 
• multiple vehicles 
• higher insurance costs 
• more expensive holidays 
• support for elderly parents or adult children 

What catches people off guard is not the cost itself, but the way these commitments lock in. You can drop discretionary spending quickly. You cannot easily drop school fees, loan repayments or a commitment to help family. 

A household earning $300,000 p.a. after tax with $220,000 p.a. of fixed expenses is under more pressure than a household earning $140,000 p.a. after tax with $90,000 of fixed expenses. It’s not about the income; it’s about the gap. 

When the gap between income and fixed expenses narrows, cash stress rises, regardless of how high the income looks from the outside. 

4. Many high-income earners become the bank of the family 

Another dynamic we see often is that high income earners become the person everyone turns to. You might be the sibling who is “good with money”. You might be the parent who helps with deposits or school fees. You might be the one who can “just cover it”. 

Most of the time, this comes from generosity, not obligation. But it has the same effect. A steady drip of financial support to family members adds up quickly and rarely shows in your own lifestyle, which makes it harder to spot. 

Financial support is not wrong. But without boundaries and structure, it becomes another reason your income feels like it disappears faster than it should. 

5. Savings are often irregular instead of systematic 

High income earners often save what is left over rather than paying themselves first. In theory, a large income should leave a large surplus. In practice, the surplus shrinks over time because spending quietly expands until it fills the available space. 

The solution is simple but powerful. Decide how much you want to save each month. Automate it. Treat it like a bill. Pay your future before you pay for holidays or dinners out or spontaneous upgrades. 

When savings become the default rather than an afterthought, cashflow suddenly feels calmer. The stress lifts because you know progress is happening automatically. 

6. Investments get scattered, unfocused or too conservative 

Another reason high-income earners feel cash poor is that their wealth is spread across many small, unrelated investments that don’t work together. We often see: 

• multiple super funds 
• leftover share trading accounts 
• cash sitting idle 
• property that is unprofitable 
• portfolios that haven’t been rebalanced in years 

Or, at the other end of the scale, people keep too much cash because markets feel risky. The intent is caution, but the result is missed compounding. Over a decade, the difference is enormous. 

Feeling cash poor often comes from not seeing tangible progress. When your money is scattered or stagnant, it is hard to feel confident, no matter how much you earn. 

7. Time pressure leads to reactive money decisions  

High income earners are often extremely busy. When you are juggling work, family and a full life, financial decisions get pushed aside. 

You pay whatever your accountant sends through. You renew insurance without checking. You accept the bank’s offer rather than negotiating. You choose investments based on convenience rather than suitability. You delay sorting old super funds. You skip the conversation about long term goals because it feels too big to tackle. 

Busyness leads to drift. Drift leads to inefficiency. Inefficiency leads to unnecessary costs, extra tax, subpar investing and the feeling that your money is working against you rather than for you. 

8. The comparison trap creates invisible pressure 

High income earners are often surrounded by other high-income earners. This shifts what feels normal. The benchmark becomes the colleague who bought the fancy car, the neighbour who renovated, the friends who upgraded their holiday plans. 

Even if you do not feel competitive, it is easy to absorb these standards without noticing. When you feel behind relative to your peers, the pressure to keep up rises. That pressure often translates into spending decisions that don’t match your long-term goals. 

The comparison trap has nothing to do with your actual progress, but it shapes your emotional experience of money more than most people admit. 

So how do high income earners stop feeling cash poor? 

The good news is that this can turn around quickly. It comes down to five core steps. 

1. Build a simple, intentional money framework 

You do not need a complex budget. You need a system. At Braeside Wealth, we use a four bucket approach that separates money into: 

• fixed expenses 
• lifestyle spending 
• short term savings 
• long term wealth 

This removes emotion and guesswork. It gives you control without making money feel restrictive. 

2. Automate wealth building 

Set automated transfers into super, investment accounts and long term savings. High income earners gain huge momentum when they turn intention into automation. 

3. Manage tax proactively 

High income earners benefit enormously from strategic tax planning. Things like salary sacrifice, negative gearing and investment structuring can have a major impact on net outcomes. 

4. Review major commitments regularly 

This includes mortgages, insurance, school fees planning, funding support for family and large lifestyle costs. A small adjustment each year can add significant cashflow relief. 

5. Work with an adviser who is independent and aligned 

The biggest shift comes when you have someone in your corner who helps you cut through complexity, reduce noise, avoid reactive decisions and build a plan that matches the life you actually want. 

When your finances are structured properly, high income becomes a powerful engine for long term freedom. Without structure, it becomes a treadmill. 

High income earners feel cash poor more often than you think. It is not a personal failure. It is not a sign that you are bad with money. It is simply the result of modern life, rising expectations and silent financial pressures that compound over time. 

The key is to step back, create clarity and build a system that supports the lifestyle you want today while still moving you toward the day you can make work optional. 

If you’d like help getting that structure in place, we’d be happy to guide you through it. 

Get in touch with Braeside Wealth today for a chat about how this approach could work for your situation. It’s the first step toward a calm, confident, and financially free retirement. Click here to book a 15-minute Good Fit Chat.  

The information in this article is general information and does not take into account any person’s individual situation. You should always do your own research, or seek professional advice to assist you in making an informed decision about what suits your needs.