HENRYs can improve financial stability with targeted strategies

Many high earners, known as HENRYs (high earners, not rich yet), struggle to build wealth even with large incomes. This can happen due to busy schedules, lifestyle inflation, and unclear financial goals. Here are five strategies to help improve financial health. First, clearly identify your financial objectives. Ask yourself what financial independence means to you and how it fits into your lifestyle. Break these goals into smaller, manageable steps. Whether you work with a financial planner or not, this will help guide your financial decisions. Second, control your spending. High incomes can lead to overspending. For example, a client earning $2.5 million was spending $2 million on non-essential items, including expensive landscaping in an unsuitable climate. Track your expenses and find areas to cut back using budgeting tools. Third, automate your savings and investments. Setting up automatic transfers to savings accounts makes it easier to save consistently without much thought. In 2025, high earners can maximize contributions to retirement accounts, which can also reduce tax bills. Fourth, manage your income taxes. High taxes can take a big chunk out of your paycheck. Work with a financial advisor to create a tax plan. Utilizing tax-advantaged accounts can help reduce taxable income significantly. Finally, prioritize what truly matters to you. Understanding your short-term wants and long-term goals is crucial for achieving financial independence. Evaluate your spending choices and align them with what brings you fulfillment. Balancing between saving and spending is key to reaching your financial goals.