6 savvy money moves to make when you’re making $90,000 a year

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In 2021, the median family income in the United States was $79,900. If your household income is $90,000 — or your salary alone is $90,000 — you’re already well ahead of the curve. While you failed to six digits quite still, you may find yourself with an extra cushion and wondering what to do with it.

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The good news is that the best money moves at this income level are more or less conventional wisdom. This means getting the most out of your money doesn’t involve complicated patterns or advanced trading.

Having some of the right systems in place will help you move forward while continuing to build wealth. Let’s take a look at some of these systems here.



Pay off high interest debt

One of the biggest culprits that keeps people broke year after year is high interest debt. After all, the average credit card debt exceeds $6,000 per family. It is not always easy to know what is considered very interesting or how to prioritize it.

However, Maya Nijhawan, co-founder and COO at Bullfinch, uses 7% as the threshold. “7% is our magic number because that’s the average you could earn in the stock market,” says Nijhawan. “In other words, high-interest debt is costing you more than you could earn by investing in the stock market.”

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Maximize long-term retirement savings

You may have heard before that you should invest more money in your 401(k), but it’s worth repeating if you find yourself earning more than in the past. The 401(k), for example, has a contribution limit of more than $20,000 for those under 50. For those earning $40,000 a year, maximization is probably not possible. However, as your income increases, you can approach this limit.

You don’t have to stop at the 401(k), however. Accounts such as the Roth IRA can also be powerful retirement tools. “What this income level often misses is taking advantage of underutilized Roth IRA contributions for savings that may not be long-term,” says Jason R. Escamilla, CFA, CEO of ImpactAdvisor LLC.

PeopleImages/Getty Images/iStockphoto

PeopleImages/Getty Images/iStockphoto

Take advantage of employer matching

If you work for an employer that offers matching contributions and you are not taking full advantage of them, now is the time to do so. Some employers match your contributions to encourage you to invest more in your retirement. Usually the match is based on a percentage of your salary. “For example, a common match is dollar for dollar up to 3% of your income,” says Nijhawan.

The problem with matching is that you will not have access to this money through other means. Basically, you’re leaving money on the table if you don’t take advantage of it.

By using a 3% match, you can significantly increase your retirement contributions, says Nijhawan. “So if your annual income was $90,000, your employer would match your 401(k) contributions dollar for dollar up to $2,700. It’s basically free money, don’t leave it on the table! “

RyanJLane/Getty Images/iStockphoto

RyanJLane/Getty Images/iStockphoto

Review your salary and know your worth

Remember that inflation is real, and that means you don’t want to settle on how much you earn. $90,000 may translate to a high standard of living today, but that may not be the case in 10 or 15 years. As a result, Nijhawan recommends reviewing your salary periodically. “As a general rule, you should review your salary once a year and make sure you’re being paid what you’re worth.”

Nijhawan also points out that there is a limit to cutting spending. In other words, if you’re unhappy with your retirement savings or net worth and you’ve already cut as much as you can, it might be time to boost your income. Raising your current salary may be one of the easiest ways to do this.

larry1235 / Shutterstock.com

larry1235 / Shutterstock.com

Invest in assets that fight inflation

On the subject of that pesky inflation, there are certain investments that can help you fight inflation. This is especially useful if you have money that you don’t want to invest in the stock market, but don’t want it to lose value. For example, Series I savings bonds have been a popular way to fight inflation lately, although it’s certainly not the only way.

“While Series I bonds help protect your money against inflation, whether it’s the right choice for you depends on your personal circumstances,” Nijhawan said. “Before you hit the buy button, make sure you understand all terms and conditions.”

nito100/Getty Images/iStockphoto

nito100/Getty Images/iStockphoto

Pay yourself first

It’s important to pay yourself first, especially if you have money to spend. In other words, don’t go out and buy nice things until your money runs out. You can still do this, but not until you’ve paid yourself first.

In fact, you should even pay yourself before you pay debt collectors, says Matthew D. Grishman, Principal, Wealth Management Advisor at Gebhardt Group Inc.. “I suggest starting with 10% of your take home pay, the day the deposit hits your bank account.” Grishman said. “Swipe it into a savings account called ‘Me Savings’. This intentional monthly saving behavior prepares you to know what your most profitable investment is: you.”

Either way, paying yourself first is an effective strategy. It may sound simple, but too many people fall victim to lifestyle inflation and forget to pay themselves. If you pay yourself first, you’ll be well on your way to building wealth.

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