Making $100,000 A Year And Still Struggling

A new reader of The Money Ninja sent an email to us that she is making $100,000 a year and still struggling to make ends meet. Here’s her story, what her expenses are, and what I recommend to her in order to get back on the right track.

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Her Story

“Hi, my name is Allison (name changed to protect identity). I’m a 31-year old single woman working as a financial manager in New York City and living in Brooklyn. I make a little over $100,000 a year, but I am constantly stressed and strapped for cash even though I make more money than I thought I would at my age.

I’m not even splurging that much and try to save what I can. My friends have a hard time relating. They all think I’m swimming in money and have nothing to worry about because in comparison they make much less.

I want to get ahead, but it feels like I’m living paycheck to paycheck.”

“What should I do?”

Allison S.

Financial Breakdown

As part of the email exchanges, Allison volunteered to send me her financial breakdown. While each month varies, here are her monthly averages:


  • Salary = $8,500 ($102,000/year)
  • Total Taxes = 25%
  • Net Income After Taxes = $6,375


  • Apartment = $3,000 (2 BR, Brooklyn)
  • Electric/Heat/Water = $125
  • Internet/Cable TV = $160
  • Student Loans = $600 ($30,000 private loan @ 5.5%)
  • Auto Loan (2019 BMW 3 Series) = $500 ($18,000 36-month loan at 1.99%)
  • Life Insurance = $750 (whole life)
  • Auto Insurance = $150
  • Gas = $200
  • Credit Card Debt = $150 ($9,000 at 9.99% APY)
  • Groceries = $500
  • Restaurants = $300
  • Miscellaneous = $100 (shopping, clothes, coffee)


  • 401k = $100 (matched 100% dollar-for-dollar up to 5%)
  • Individual Brokerage Account = $0


  • Allison owes $340 at the end of every month, which she puts on her credit card.


First, thank you for sharing your story. A lot of people struggle with their personal finances regardless of their income level. I think it’s more helpful to give advice and recommendations on what they can do to better their situation rather than admonishing them.

You’re right that most of your friends probably can’t relate. Although making $100,000 isn’t as big of a deal as it used to be, it’s still pretty rare to make six-figures.

In the entire United States, less than 1 in 10 people make $100,000 or more:

2018 Individual Income percentiles

The median income is $33,706 – which means 50% of Americans make less than that a year. The average income of $50,413 is less valuable information because the super rich skews the number up a lot.

Nowadays, it’s common to have more than one person in a family work. But even if we consider household income (combining money everyone under one roof makes) instead of individual income, still only 1 in 5 households make $100,000 or more:

2013 Household Income percentiles
(Image from Census Bureau)

So congratulations on your career achievement. It’s hard to get to that level of job success.

Now for the ugly part…

You’re spending beyond your means.

The good news is there are a lot of opportunities to save money without cramping too much of your lifestyle. I’ll write my recommendations for each category you listed.


Credit Card Debt

You’re paying $150 a month against your credit card debt. That looks like the minimum payment required (or close to it) – not a good thing because your credit card company is charging you 9.99% in interest.

It’s going to take you 7 years (84 months) to pay off that balance!

You can use a credit card repayment calculator like the one at Credit Karma to see the results visually:

Repayment information for $9,000 credit card balance with $150 monthly payments

By the end, you’ll end up not only paying the $9,000 balance, but an extra $3,500 in interest:

Repayment chart of $9,000 in credit card balance repaid $150 a month

You should try to pay off the balance faster, but if you can’t do that, the next best thing is to balance transfer the amount to another credit card that offers a introductory 0% APY interest.

Here’s a list of credit cards that offer a APR 0% balance transfer. Below are examples of such cards and how long the intro 0% rate is good for:

Credit CardBalance Transfer Intro APR
American Express EveryDay Card0% for 12 months
Citi Double Cash Card0% for 18 months
Citi Simplicity Card0% for 21 months
U.S. Bank Platinum Card0% for 20 months

The nice thing here is at the end of the 0% intro APR rate, you can balance transfer again to another 0% card!

You should be able to use this strategy until you pay off your entire credit card debt.

Potential Savings = $42 a month


I get it. New York City is expensive. The cost of living is through the roof. Coastal cities like NYC, along with Boston, San Francisco, and Los Angeles are the most expensive places to live.

You said you were single, but you’re renting a 2 bedroom apartment for $3,000 a month. That’s 44% of your monthly net income!

You don’t want to spend almost half of your money just to live somewhere. Most experts say you should keep this number at 30% or less.

If you really like your place, then think about getting a roommate for the other bedroom. If that person pays half of the rent, this will cut down your apartment cost to $1,500 (22% of your income).

Not opposed to moving? There are plenty of nice places available for a lot less. Brooklyn is a large borough and I don’t know where your job is located.

Assuming you want to be close to the city, there are apartments next to the Williamsburg Bridge like the Common Marcy one:

Common Marcy apartment in Brooklyn, New York
(Image from

$1,875 is still under the recommended 30% rent-to-income threshold.

Savings Potential = $1,125 to $1,500 a month


Between electric, heat, and hot water… I have no suggestions. Spending an average of $160 for those utilities is very reasonable.

Savings Potential = $0

Internet & Cable TV

Paying $160 for internet and TV is a little expensive. The way we watch television has changed drastically over the last several years. While most of have 200+ channels to tune into, we end up watching 12 channels on average.

Here’s how to save money in this category with just two steps:

  1. Cancel your “Cable TV and Internet” package and get internet starting at $39.99 a month with Comcast or Verizon Fios
  2. Get Hulu + Live TV for $54.99 a month – Hulu is a streaming service just like Netflix, but it has live television as an option with over 60+ popular channels

There are awesome Hulu original series like The Handmaids Tale to boot:

(Image from Hulu)

You’ll go from the $160 you were paying before to $95 – a difference of $65.

Savings Potential = $65 a month

Student Loans

The average student loan debt for college graduates in New York is $37,753 so you’re more or less in line with other bachelor degree holders.

While you’re total student loan debt of $30,000 is nothing I would worry about, you could do better with the 5.5% interest rate.

You’re paying $600 a month and getting charged 5.5%. My calculations have you paying this off in 57 months, or just under 5 years.

That means you’ll end up paying $34,200 ($30,000 in principal balance and $4,200 in interest).

You should refinance your student loans. For example, one of the more popular lenders, SoFi, is offering a rate as low as 3.75% for a 5-year loan. With a loan like this, you’ll lower your monthly payment by $25 to $51 dollars:

SoFi student loan refinancing example
(Image from SoFi)

Over the 5-year loan period, your total savings is high as $1,204. Not bad!

Why do I love SoFi? Because there are no application fees, origination fees, or pre-payment penalties. And since we partner with SoFi, you can earn a $300 cash bonus just for switching your loan payments to them.

Savings Potential = $25 to $51 a month

Auto Loan

Honestly, I would keep your car and continue to pay your loan here. Before you bought your 2019 BMW 3 series, my advice would’ve been to take a hard look at more affordable cars that are highly-rated.

Good cars around the size of your beemer include the Honda Accord, Toyota Camry, or a Mazda 6. But that’s water under the bridge now. It’ll cost you more to sell your car and get one of those.

Your interest rate on the auto loan is very good too – 1.99% is excellent. You’d be hard-pressed to find a lower rate to refinance into.

Savings Potential = $0

Life Insurance

The whole life policy you currently have is too expensive.

Whole life is not pure life insurance, it’s life insurance plus an investment component that the insurance company invests and manages for you.

I’m a fan of keeping it simple. You should buy life insurance just for life insurance and invest your leftover money in more appropriate accounts (more on that below).

I recommend getting what’s called term insurance.

It’s 100% pure life insurance with no extra fluff. You choose how long your insurance lasts for (10 years, 20 years, 30 years, etc) according to your family needs and pay a much smaller monthly premium.

I recommend getting a quote at Fabric. Fabric offers term insurance that you can get online, without ever meeting anyone or taking blood work (yuck, I hate needles).

Haven Life header with boy flying in dad's hands
(Image from Haven Life)

Getting a quote is so easy, the application is literally 7 questions that takes less than a minute to fill out.

I used your information (female, 31 years old, lives in New York) to get an estimate. I assumed you need 30 years of term insurance to see you through until you retire:

Haven Life quote example
(Image from Haven Life)

Based on that information, your estimated premium is between $49 and $103 per month:

Haven Life quote example result
(Image from Haven Life)

Stop paying that $750 per month for your whole life policy and switch to term life today. This is one of your biggest opportunities in my analysis.

Savings Potential = $647 to $701 a month

Auto Insurance

I don’t know if $150 a month is a good deal or not in New York City. That’s $1,800 a year though and seems high for a 31-year old female.

I’m not sure if Allison had shopped around for other car insurance quotes. Most people don’t. Get a few quotes with similar coverage levels. If it’s cheaper, then switch. I usually price shop every few years and can save 10% to 15% off.

Ninja Tip: Most car insurance companies give alumni discounts for graduating college. This alone would save you 10%!

Here are a few reliable auto insurance carriers you can get a quote from:

Potential Savings = $15 to $23 a month


While $500 a month on groceries for one person seems high, I don’t have enough information to advise on saving here.

You may have dietary restrictions or special needs. You might be a Whole Foods fan. I don’t know so I won’t say anything here.

Regardless of where you shop and what you buy, you can still use receipt-scanning apps like Fetch to earn points and redeem them for free gift cards.

Fetch rewards you for just scanning your receipts from any store. New users can get a 4,000 point bonus when sign up using the Fetch promo code MONEYNINJA. That’s enough to redeem for a $4 gift card.

Potential Savings = $10 to $20 a month


Gas is gas. You need it to drive yourself around. I’m not worried about $200 that the gas station is getting from you, but there’s still a way to save on this.

For example, you can earn cash back on every gallon of gas you purchase by using the Upside app. Simply refill your car like you normally do and then just upload the receipt with your phone.

I reviewed the app recently and gave 8.8 out of 10 stars. New users can also get a bonus of up to 50¢ back per gallon when they download the app using our link.

I would also use gas price finder sites like Gas Buddy to locate the cheapest gas in your area. If it’s not convenient, I wouldn’t bother because you may spend more money driving to a farther gas station than the one you usually use.


Some people will disagree here, but $300 a month at restaurants is not outrageous. That’s about $69 a week. An entree and a couple drinks will eat up that budget, especially in NYC.

That being said, since you’re in New York, there are a ton of ways to save when you dine out.

The Seated app, for instance, will pay you 20%-40% back at many restaurants – just for taking a picture of your receipt. You can redeem the rewards with many popular partners like Amazon and Target.

(Screenshot of Seated app)

Technically you’re not saving anything by doing this, but at least you can be rewarded on things you’re already spending money on.

Potential Savings = $0


I’m perfectly okay with you spending $100 a month on fun things. This is The Money Ninja, not Scrooge McDuck, we’re not here to take out every joy in life, but to make you become smarter about your money.

Potential Savings = $0


A 401k account is super important for your retirement. I know it’s hard to think 30+ years into your future, but believe me, you don’t want to panic at 65. By then it’ll be too late.

You don’t want to work to your 90’s because of mistakes today… you may not even be able to work due to health reasons anyway.

The $100 you’re putting in now is better than nothing, but it’s not nearly enough for your future needs.

Besides that fact, you’re missing on FREE money your employer is giving you with their matching.

Aim to put at least 10% of your salary here, which is $850 a month. It looks like a huge number, but with all the ways you cut down on your expenses, you’re going to be able to do this without any problems.

Your employer is giving you a 100% match for the first 5% of your contributions too, so that’s another $425 a month towards your 401k. For free!

Your $850 + Employer $425 = $1,250 a month for your future.

Individual Brokerage Account

Remember I told you to get rid of your whole life insurance and switch to term life instead?

Now, instead of letting your life insurance company invest your money for you in suboptimal choices, you can do it yourself for less fees and higher returns. You just need to open a stock account.

Where should you open an account? I recommend Webull. Webull is an easy-to-use brokerage account that you can use on your desktop or mobile phone.

WeBull logo with WeBull app on phone
(Image from Webull)

And if you open an account, you’ll get a head start with 12 free shares of stocks.

Once you have a Webull account, you can do one of two things (or even a mix of both):

  1. If you don’t know too much about stocks, I’d suggest to buy something like S&P 500 (ticker symbol: SPY). It tracks the market at large so your account will do as well as the general stock market.
  2. If you want to buy individual stocks of public companies like Facebook (ticker symbol: FB), Google (ticker symbol: GOOG), or Amazon (ticker symbol: AMZN), you can also do this through Webull.

Start by contributing small, like $100 a month, until you get the hang of it.

Want more information? You can read my Webull overview here.

Individual Brokerage Account contributions = $100 a month for your future.

The Bottom Line

Ok, let’s see how we did by looking at all those categories again with a “before and after” analysis:

Apartment$3,000$1,500 – $1,875$1,125 – $1,500
Internet/Cable TV$160$95$65
Cell Phone$80$40$40
Student Loans$600$549 – $575$25 – $51
Auto Loans$500$500$0
Life Insurance$750$49 – $103$647 – $701
Auto Insurance$150$127 – 135 $15 – 23
Credit Card Debt9.99% APY0% APY$42

Total Savings = $1,959 to $2,422 a month

Deduct the $950 Allison will contribute to her 401k and stock accounts, and that still leaves her with an extra $1,009 to $1,472 monthly!

Allison’s monthly cash flow goes from negative to a big positive. Instead of living paycheck to paycheck (and owing money at the end of every month), she’ll have more than $1,000 extra in her pocket while helping her retirement to boot!

Allison, I hope that helps you turn your personal finance situation around. Please keep me posted on your journey. It’s great to be making $100,000 a year, but it doesn’t matter much if nothing can be saved.

Other ninjas, if you’re in a sticky financial situation and would like me to do a free analysis, please send me an email (email link can be found by scrolling to the bottom of this page) and I’ll try to help you out.

There are opportunities to improve your financial profile, whether you’re making $35,000 a year, $100,000 a year, or $250,000 a year.

I hope all this was helpful 🙂

About John Pham

John Pham is a personal finance expert, serial entrepreneur, and founder of The Money Ninja. He has also been fortunate enough to have appeared in the New York Times, Boston Globe, and U.S. News & World Report. John has a B.S. in Entrepreneurship and a Masters in Business Administration, both from the University of New Hampshire.

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betta from daVille
betta from daVille
3 years ago

Paying $500 a month to lease a car is a total waste of money. (2-year lease = $12,000 at the end, you have nothing to show for it).

I purchased a new base model Subaru Impreza (2013) in 2014 and paid $19,000. I’m still driving it 6 years later, $263 a month. I only purchased a new one because it was actually less than a used one with low mileage (I have a 3-hour commute 2x per week).

I also make more than 100,000 per year. But I saved up and paid cash for my car. Drive a cheap car until your student loans are paid off, when you are putting at least 15% into retirement and can pay cash for your car!

(I also always had a roommate.)