5 habits that could lead to bankruptcy no matter how much you earn

Dubai: Earning a six-figure salary may appear to guarantee financial security, but recent surveys suggest that many high-income earners are still struggling to stay financially afloat. A survey by Harris Poll found that around one-third of Americans earning more than $100,000 a year describe themselves as experiencing financial hardship. Nearly two-thirds said a six-figure income no longer feels like wealth and is closer to a "survival" income. The survey also found that 75 per cent of respondents had recently relied on credit cards after running out of cash, while more than half said they would need to double their income to feel financially secure. Separate data from YouGov Profiles showed that only 55 per cent of people earning more than $100,000 consider themselves financially comfortable, while 43 per cent say they are merely managing to maintain their financial position. Financial experts point to five common habits that can undermine financial stability even among high earners. Constantly supporting family and friends Providing financial support to relatives and friends can become a long-term burden when clear boundaries are not set. According to the Pew Research Center, around six in 10 parents provide financial assistance to their working children. A 2025 survey by JG Wentworth found that 53 per cent of adults had lent money to a friend or family member, while nearly half said they might ask a relative for financial help without expecting repayment. Repeated financial assistance can gradually erode savings and increase vulnerability during personal financial emergencies. Saying yes to every social invitation Dining out, entertainment, travel and social events can quickly add up. Data cited in the report showed that adults in the United States spend an average of $2,841 a year on restaurants and takeaways, while the average household spends about $3,568 annually on entertainment. When birthdays, celebrations and holidays are added to the mix, social spending can become one of the largest drains on personal finances. Overreliance on credit Higher incomes often provide greater access to credit, but easy borrowing can become a financial trap. A PYMNTS survey found that higher-income consumers are 40 per cent more likely to use "buy now, pay later" services than lower-income consumers. Meanwhile, BHG Financial reported that 62 per cent of people earning more than $300,000 a year struggle to manage credit card debt. Experts warn that multiple monthly repayments and interest charges can quickly absorb even a substantial income. Lifestyle inflation One of the most common financial pitfalls is "lifestyle inflation", where spending rises in line with income. A pay rise is often followed by a larger home, a newer car or higher discretionary spending, leaving little room for savings growth. According to a 2025 retirement survey by Goldman Sachs Asset Management, 40 per cent of workers earning more than $300,000 annually said they were living pay cheque to pay cheque, compared with 36 per cent of those earning between $50,000 and $100,000. Financial planners often recommend directing part of any pay rise or bonus straight into savings or investments before spending habits adjust. Buying a home beyond your budget Property is often the biggest financial commitment people make, but stretching beyond affordable limits can create long-term financial pressure. Data from Clever Real Estate indicated that about three-quarters of first-time homebuyers and 65 per cent of all buyers have some regrets about their purchase. More than half of first-time buyers said they had taken on a financial commitment beyond their means, while 38 per cent exceeded their original budget. The report suggests limiting home purchases to properties costing no more than four times annual income and keeping monthly housing costs below one-third of monthly earnings. Income isn't everything The findings highlight that financial security depends not only on how much people earn, but also on how they manage their money. Frequent financial support for others, excessive social spending, growing debt, lifestyle inflation and overstretching on property purchases may seem manageable individually, but together they can create a pattern that undermines even a high income. Ultimately, financial stability is determined not just by earnings, but by how much remains after the spending stops.