First Person: I’ve Hit My Midlife Income Plateau

Yahoo Contributor Network

I may have hit my income plateau a few years ago. Pay tops out for women at about age 37, according to an article, "Pay Goes Nowhere after 40," posted at In contrast, my husband's income should continue to increase until he hits his plateau at about age 45.

Experts say the disparity is due to the fact that women tend to choose lower-paying professions. I know that's true in my case since I chose to stay in the online and print media profession.

Instead of obsessing on the different career moves I could have made in my 20s and 30s, I'm focused on how to handle my midlife income plateau at age 40.

Shifting to passive income

Instead of increasing my income by taking on a second job or freelance work, I'm increasing my passive income. My goal has been to accumulate shares in exchange traded funds and individual stocks that pay impressive dividends every quarter. Although I have to pay taxes on all dividend income, it's a lot easier than trying to juggle more than one job.

Becoming a discount shopper

I recently started shopping at consignment shops that carry only brand names and better labels. I scored a designer purse that retailed for $500 for only $50 because of a few markings. I was able to take the purse to a shoe repairman who made it look like new for a cost of just $10. I'm always on the lookout for sales, not just during the holiday season.

Saving like a robot

Instead of thinking about how much I should save every month, I put it on auto-pilot by treating my banking accounts as if they were robots. My "robots" are programmed to automatically shift money from checking to savings every month. I have money automatically deducted from my paycheck and saved into my 401(k) account so I don't have to worry about retirement.

Staying in instead of going out

To save money, my husband and I have invested money in our home entertainment system as well as our kitchen. We save money by eating gourmet meals at home and watching movies in our living room. By cutting back on trips to the theater and restaurants, we are saving about $100 a week.

Remaining committed

By remaining committed to our marriage, my husband and I will avoid the financial problems that plague many people in their 40s and beyond. We also made a commitment to pay off our house, which should compensate for the fact that my income has hit a brick wall. Once our mortgage is paid off in another 7 years, we will feel as though I got a $1,500 a month pay raise.

Although I'm not happy about the fact that my income is less likely to rise after age 40, I'm not willing to start a new career or aggressively fight for higher-pay positions. Instead, I plan to be a smarter shopper and investor.

*Note: This was written by a Yahoo! contributor. Do you have a personal finance story that you'd like to share? Sign up with the Yahoo! Contributor Network to start publishing your own finance articles.

More from this contributor:

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