A High Salary Can Have Pitfalls for People from Underprivileged Backgrounds

  • Growing up in an underprivileged home and then earning a high salary can bring its own form of stress for those who never learned how to manage money
  • Watching parents scrimp and struggle to survive makes money seem like a mysterious is outside force, and doesn’t allow a child to feel secure and learn about money in general
  • Adults who were formerly underprivileged children often ignore the idea of budgeting and just spend whatever they earn as they make it, resulting in a perpetual state of being broke. Learning to budget can break this cycle and build financial confidence

If you grew up in a household where money was scarce and only a source of stress, finding yourself in a career known for its high salary is often a dream come true.

Surprisingly, though, making a lot of money after being raised without much of it actually comes with its own kind of stress. It turns out that simply having more than enough money does not make a person have the automatic ability to budget that money.

When Money is Mysterious and Budgeting is Miserable

Watching your parents struggle can have a long-lasting effect on how you view money. Picture a child who becomes used to hearing a parent begging the utility company not to shut the lights off again, has a wardrobe that consists of hand-me-downs and thrift shop finds, and is accustomed to eating dinners of peanut butter and jelly sandwiches for several days at the end of every month. He never gets to see his parents budget, but only survive.

To children in this situation, money is a mysterious thing that disappears quickly and easily but makes all the difference in every aspect of life. Did you ever feel that way as a child?

The smallest surplus needs to be spent right away, since saving just isn’t possible and emergencies crop up regularly. The only evidence of budgeting is watching your parents count out what little money they have down to the penny to buy necessities while being anxious and angry that they never have enough. Growing up in poverty involves wanting the things that all children want—toys, the latest cool clothing, and fast food—but rarely being able to have them.

Now add a six-figure Big Law salary to that grown-up child’s life, when he has never had the opportunity to experience money in any way that can help him learn how to manage it. See the problem?

The Reaction to Money

Research shows that the stress of growing up without enough money changes a child’s brain—not simply the lesser nutrition or poor education associated with poverty, but the actual poverty itself. As a result, adults may have difficulty making reasonable decisions when money is involved. You might think that someone who grew up with little money would be extremely frugal and conscientious once they begin making more than enough, but surprisingly, what usually happens is the exact opposite.

Not having to count every cent for survival means formerly underprivileged people will often not count at all. When money is a source of stress, a common coping mechanism is to ignore it altogether—if you know you’re making a high salary, there is no need to worry about it, and you can just spend it as soon as you get it, right? And since experience hardwired your brain that money can suddenly disappear and you have little control over what happens with it, you should enjoy it while it’s here. This mindset makes perfect sense as a protective measure against a world that seemed unfair to hardworking, penny-pinching parents.

The problem with this thinking, of course, is that it’s not true—you can’t spend everything you make without being perpetually broke, no matter how much money you earn. Not to mention, this lifestyle means little to no planning or saving for the future is taking place. This is a recipe for a disaster that a person who panics in the face of budgeting is ill-equipped to handle.

Anyone Can Learn to Budget

Budgeting is a skill that anyone, no matter their childhood experience, can learn. It doesn’t have to be complicated, time consuming, or stress inducing. In fact, learning how to manage finances will likely make you more confident and relaxed about money in general. The realization that you can take control and not simply be subject to seemingly mysterious outside forces can be empowering.

If you are having trouble managing your generous lawyer salary, an easy way to budget is to use apps. You plug in your earnings and goals and the app does most of the work for you, sending notifications when it’s time to pay bills and helping you save. If apps aren’t your thing, you can also just sit down and make a list of how much you’re bringing in against your expenditures, and give yourself a monthly amount that you are allowed to spend in various areas. Make sure you spend less than you make and bank a decent percentage of your money every month, and you won’t have to worry about being broke.

Next comes the hard part, though: You’ll have to practice a bit of self-discipline. If you’re going to stick to a budget, you must limit your spending. You can still enjoy yourself and buy luxuries, but only those that fit into your weekly or monthly budget. No impulsively spending every cent you make as it hits your bank account. This may feel uncomfortable at first, but we promise you’ll quickly get used to it and it will soon become second nature.

What's Next

If you never learned to budget, take some time over the next week to create a simple budget or use an app to avoid spending your entire salary every month. Try sticking to it for the next two months and see how it feels.