To be in the top 1% of earners in the UK, you need to be bringing in around £160,000 per year. To 99% of people, that’s a dream number. But here’s the thing: no matter how much money you earn, there will always be something to spend on. Lifestyle inflation is a very real thing and it’s easy to fall prey to. This is why, even in today’s consumer-driven society, it’s more important to be good with money than it is to have a high salary.

Earning a substantial income can undoubtedly open doors and provide opportunities, but it does not automatically guarantee that you’ll have financial stability. It is entirely possible for you to have an impressive salary and find yourself living paycheck to paycheck or drowning in debt. For some, this may be surprising. But the key to financial stability doesn’t lie in how much of a paycheck you take home—it lies in how you manage it when you have it. For example, in the consumer-driven society we live in today, it’s easy to fall into the trap of lifestyle inflation. We start to earn a higher income, and then BAM our spending habits are adjusted accordingly. Upgrading our homes, our cars, our wardrobes, our holidays and grocery choices as we do. This is why, without proper financial management, it’s easy to fall into bad spending habits.

So, how do you manage it?

There are two things you need to do:

Learn to Maximise Your Earnings

Being good with money means more than just earning a high salary; it involves understanding how to make the most of what you have. Adopting sound financial habits such as listing your outgoings, budgeting, saving, and investing wisely are all needed to maximise your earnings and create a financial safety net.

Live Below Your Means

One of the best parts of earning more money is that you get to have more fun. However, one of the fundamental principles of financial success is knowing how to live below your means. This means spending less than what you earn and avoiding unnecessary debt. Doing so enables you to save for emergencies, plan for retirement, and achieve your financial goals without relying on credit or accumulating debt. Living below your means also provides a sense of financial security and peace of mind, knowing that you have control over your financial future. It may require making sacrifices here and there—but the overall balance can be achieved if you have the right plan in place.

True financial well-being lies in the ability to manage your money effectively, and understand that having a high salary is merely a tool that (if used wisely!) can contribute to your overall financial stability and wealth. It can be difficult to adjust to, but by adopting these principles, you can gain control over your finances, have fun AND achieve your long-term financial goals.