I make a 6-figure salary but I'm still always broke

Do you earn a 6-figure salary but have no savings to show for it? Learn different ways to control your spending so you can start saving for your future.

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Dear Charlotte,

I've made a low 6-figure salary for several years, but I've got nothing to show for it. I have barely any savings. I don't own a house (though I would like to someday). I did manage to max out my 401(k) last year, but I still have way too little in it. My problem is that I can't stop spending. I've developed a bad habit of signing up for zero-interest periods on my credit cards and then using them until I have to draw from my savings to pay them off before the interest kicks in again.

I know I could save quite a bit if I stopped buying makeup, clothes, shoes, accessories, home goods, and more. I just have a constant urge to shop. Spending often makes me feel better if I'm having a bad day. My parents were (and still are) horrible with money, and my mom placed a lot of importance on clothing and appearances. I also have anxiety about money that stems from the years I was in graduate school and barely scraping by. I know I should put a big chunk of money in a savings account every month as soon as I get paid, but the idea of not having that money in my checking account, available to spend, freaks me out.

I just got a raise, which will create about $500 more of income per month. I will also finish paying off a consolidation loan (another result of my terrible spending habits) within the year. Between these 2 things, I'll have an extra $1,400 per month that I'm afraid I'll just waste on more trips to Sephora and J.Crew. Is there a way to train my brain to stop wanting to buy things after years and years of feeling like I need them? Will I ever be able to save money, or am I destined to continue to throw it away on disposable goods?

If you continue to see your situation that way—as your "destiny"—then the answer is yes, because you've effectively removed yourself from the equation and decided that your spending controls you. But if you put some work into figuring out what you really want to do with your income (which involves figuring out what you really want, period), then you can wrestle your finances into their rightful place in your life—a source of occasional stress and annoyance, sure, but mostly a means to take care of yourself.

Of course, this process will be complicated, and it will take time. There's no shortcut to overhauling long-term habits, and I don't want to minimize the deeply worn grooves that shopping has carved into your psyche. Consider your brain chemistry: Research has shown that buying new things triggers a hit of dopamine, a neurotransmitter that cheers you up. From a scientific perspective, popping into J.Crew when you're in the dumps makes perfect sense, because it'll make you feel better. At least for a little while.

Then you come home, take your new sweater out of its tissue paper, try to cram it into a closet that's so full-to-bursting you don't even know what's in there anymore, and have to contend with your bad mood again. Only now it's even worse, because you're upset at yourself for buying another thing you don't need with money you wish you hadn't spent. (Can you tell I've been there? Welcome to my 20s.)

The afterglow of a new purchase is cruelly brief. In fact, studies suggest that your brain actually releases more dopamine in anticipation of buying something than it does after the act itself. So why do we keep chasing that quick high? Again, science: Dopamine plays a critical role in your brain's learning systems (some doctors call it "the 'save button' in the brain"). When those neurotransmitters are firing, your brain is much more likely to glom onto an experience and retain memories of it. You're also more likely to pursue that experience again.

All this business about neurotransmitters might make you feel even more out of control than you already do. But it's your brain, in your head, and while you can't control the way it functions, you can steer it (gradually) toward decisions that make you happier and feel more stable.

On a positive note, you're in a great position to do so. You mentioned that you're about to have an extra $1,400 a month—if you can sock that away and keep maxing out your 401(k), you'll be in pretty decent shape in no time. It's much easier to save money that you're not used to having than it is to reduce your current spending. One thing you can do right now is set up an automatic monthly transfer to a separate savings account (better yet, one that's online and not easily accessible) so that you don't see this $1,400 and feel tempted to spend it. (I suspect that's how you managed to max out your 401(k)—by automating the process. It works!)

Which brings us to the bigger issue: Your spending. The good news is that you know where your behavior comes from. It can't have been easy to grow up with parents who weren't financially secure, or at least didn't act like it. But it's great that you realize how deeply it has affected your own relationship with money—why you freak out when you don't have a certain amount at your fingertips, just in case. The pressure to maintain outward appearances at all costs, thanks to your mom, is a particularly tough one to shed. But you've already done some of the grunt work, in that you're conscious of your tendencies and their origins. Now how do you change them?

There's no single answer here, as you probably suspect. You can't just stop shopping, cold turkey—it's a major coping mechanism in your life. Instead, you need to find new ways to meet your needs. "When you learn certain self-regulating behaviors in childhood, like overspending or overeating, it can be very difficult to wean yourself off of them," says Angela Wurtzel, a psychotherapist who specializes in compulsive shopping. "You think, 'Oh, I'll just follow this plan. I should be able to budget.' But the blueprint of your psychological functioning is haywire, so it takes you down a different route before you're even aware of it." That's why these urges don't feel like a choice. She adds: "By being 'bad with money,' you are unconsciously acting out what was done in front of you. It'll happen in the blink of an eye, before the behavior even starts. Then you'll realize you've bought all this stuff and you'll think, 'What have I done?'"

Like I mentioned, I used to shop like this, too. Almost every Friday, I'd buy myself something new, like a reward for getting through the work week—only it contributed to my stress in the long run, because I was spending money on a bunch of stuff I didn't need or even like, in some cases.

I still like to shop, but I managed to get my habits under control in my early 30s. It took time and effort and plenty of missteps, but here's what ultimately worked: I kept daily lists of everything I bought (which I still do when my spending feels out of control—it's oddly satisfying). I set limits on how much I could spend per week, and if I had money left over, I would use it to buy something fun. I reorganized my closet so that I could see more of what I already owned. I blocked certain store websites from my browser so that I didn't mindlessly click through them. I made fun plans on Friday nights that I could look forward to instead of buying a new shirt. In other words, I didn't force myself to stop shopping—I just became more aware of it, and replaced it with other things I enjoyed just as much, if not more. Over time, the need subsided.

But that's just me. None of these tactics are groundbreaking, and while I recommend trying them, they might also seem dumb or downright impossible to you. "What one person can tolerate, another person can't. Therapy may be a good option. You have to find something that works for you," says Wurtzel. She tells me that what I did, in therapeutic terms, is use pretty textbook methods to "bring the unconscious into the conscious"—writing things down, creating boundaries, finding different mechanisms to relax. "Wanting to buy shoes and makeup—those are true wants that meet core needs," she says. "It's not shameful to want to look pretty and surround yourself with beautiful things. But there's also something deeper that won't be satisfied by these acquisitions." It's like fueling a car with a tankful of wine—the gas gauge may read as full, but that doesn't mean it's going to work.

You asked about training your brain to not shop. I think it's more about training your brain to get excited about other things. They might be similar to shopping—highly visual activities like looking at art, for example, could create the same floods of dopamine. Wurtzel also suggests leaning into your habit rather than running from it. "What people choose to spend their money on does have meaning," she says. "What do these objects mean to you? Once you develop a better understanding of that, you may be able to create other soothing objects for yourself."

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Article copyright 2019 by Charlotte Cowles from The Cut. Reprinted from the January 10, 2019 issue with permission from The Cut.
The statements and opinions expressed in this article are those of the author. Fidelity Investments cannot guarantee the accuracy or completeness of any statements or data.
This reprint is supplied by Fidelity Brokerage Services LLC, Member NYSE, SIPC.
The third-party provider of the reprint permission and Fidelity Investments are independent entities and are not legally affiliated.

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