Saving less than 5 per cent of your income, have spiralling credit card debt, unchecked bills and more than a third of your pay goes to paying the mortgage?

If that sounds like you, then regardless of your earnings, you’re living well beyond your means.

As a result, you’re overly exposed to any career derailment that could severely curtail your family’s lifestyle, and longer-term financial wellbeing.

But if you assumed this only affects low- to middle-income earners, you’re dead wrong.

Dominique Bergel-Grant, founder and financial planner at Leapfrog Life, says it’s all too common for people on six-figure incomes to have little in the way of liquid assets to show for the 100-plus hours a week spent within highly stressful jobs.

She argues that high flyers whose lifestyles rise to meet their lofty income – often by eating out more regularly and at fancier restaurants, driving luxurious cars, having kids at private schools, who move to a better class of neighbourhood – are often unrealistically blasé about their high-paying job lasting forever.

With the dynamics around executive job security having changed dramatically over the past 20 years, she says those who have failed to acquire any wealth-generating assets along the way are most at risk to any career shocks.

“If you’re the sole breadwinner, an over-reliance on your salary simply puts your family’s future into a highly vulnerable situation,” Ms Bergel-Grant says.

“Unless you’re saving 15 per cent of your salary annually, regardless of your mortgage size, you won’t withstand a [future] rising interest rate environment.”

Plan your contingency

By all means enjoy the fruits of your new-found success as a high-flying executive.

But from day one, Ms Bergel-Grant recommends factoring into your cash-flow situation what you can put away as savings.

That means doing a budget and working out the not-negotiable outgoings – like school fees and mortgage – from your lifestyle spending.

If you were to suddenly find yourself unemployed, Ms Bergel-Grant adds, ask yourself how long would you be able to maintain your current lifestyle before having to sell the cars and other lifestyle assets, remove the kids from private schools and/or find a more affordable family home?

One of the biggest issues facing high-earning execs in their early 50s, says Andrew Zbik, a senior financial planner with Omniwealth, is redundancy.

All too often when this happens, Mr Zbik adds, they adopt the ‘parachute strategy’ of drawing down on the home loan to keep the kids in a private schools, in the hope that another high-paying job will be along soon.

“Trouble is, they can take up to 16 months to get another job. And when they do, the redundancy money is long gone and they’ve taken a massive pay cut,” Mr Zbik warns.

It’s not rocket science.

The first step to stop haemorrhaging cash flow, advises Mr Bergel-Grant, is to have some hard discussions with your partner.

If you still need help, she says the cost of professional help will pay off in spades.

“Professional help will quickly identify how much of the bounty you receive from your hard work could be deployed from discretionary spending into regular savings,” she adds.

Given that age discrimination in Australia is rampant after age 50, Mr Bergel-Grant encourages execs in their 30s and 40s to have the family home paid off, well before they get to this age danger zone.

“We hear all the time of senior execs being repeatedly told they’re ‘too qualified’ for key positions, but this is really a metaphor for being too old.”

Instead of maximising your lifestyle, Ms Bergel-Grant urges you to maximise your investments.

“Firstly, that means understanding where your cash is going, secondly acquiring assets that will grow in value, and then getting rid of non-deductable lifestyle debt,” Ms Bergel-Grant advises.

“Due to the power compounding returns, any surplus cash flow put regularly into an investment portfolio will contribute to significant wealth creation over time.”

Seven tell-tale signs you’re haemorrhaging money

• You don’t track spending and never compare prices of regular items
• Credit card debt isn’t cleared monthly
• You make lifestyle purchases to enhance social standing
• You think being frugal is beneath you
• You’re leasing fancy cars instead of using income to repay non-discretionary debt
• You assume your current cash flow will continue unabated
• Any investments you make are based more on short-term hunches than informed advice.