Six-Figure Incomes—and Facing Financial Ruin

[93Regina]

Some High Earners Live Paycheck to Paycheck Here's How to Break the Cycle of Overspending.

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Sylvia Flores was earning more than $200,000 a year overseeing
website content for retailers and tech firms when she got into
trouble. She had a personal chef and a housekeeper, and took her
husband and two children to Hawaii for frequent vacations.

"I spent way more than I made, but I didn't really think about it
because I was making good money. I felt entitled," says Ms. Flores,
who is 40 years old and lives in Oceanside, Calif.

She ran up some $300,000 in credit-card debt before deciding to put
her financial house in order about three years ago, after getting
divorced and remarrying. It wasn't her first brush with borrowing
woes—Ms. Flores declared bankruptcy in 2005 after amassing about
$500,000 in debt.

The first step was to control her spending, often the most important
and most difficult change to make. She started making her own meals,
moved to a cheaper condominium, cut out expensive vacations and
shopped for clothes at thrift stores.

Ms. Flores also found ways to encourage herself to save. She gave
herself a small reward—such as a pricey latte at a neighborhood coffee
shop—each time she paid off her monthly credit-card bill and shaved
off part of her accumulated debt. She now owes her card issuer about
$40,000 and has put another $40,000 or so away for retirement.