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Despite earning an estimated combined income of $500,000 to $600,000 a year, Bill from San Diego admits he and his wife struggle to save any money — and it’s easy to see why.
“Our monthly expenses are about $30,000, and then add taxes to that, so we pretty much even out every year,” Bill told Dave Ramsey on an episode of “The Ramsey Show” in a clip posted Jan. 13.
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An exploration of the San Diego, California, couple’s finances and spending habits reveals how even high-earning households can struggle and end up living paycheck to paycheck.
Spending problem
A 2023 Empower survey found that 71% of U.S. adults believe earning more money would solve most of their problems, a mindset Ramsey once shared. However, he learned that higher earnings can’t fix poor organization and lack of detail.
Bill’s case shows that increasing income isn’t enough. He and his wife spend $12,000 a month on mortgages, $8,000 to $10,000 on charity, and $750 on a leased vehicle.
Ramsey considered their spending excessive, comparing it to “throwing a bale of dollars over the fence and coming back to see what’s left.” He advised them to create a detailed budget that tracks every dollar in and out.
Budgeting and tracking can help you understand where your money is going, so you can make every dollar work for you.
You can keep a close eye on your finances with a money management platform such as Monarch Money, which can give you a clear view of where you’re overspending. It also helps you monitor your expenses and payments in real time.
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Read more: You don’t have to be a millionaire to gain access to this $1B private real estate fund. In fact, you can get started with as little as $10 — here’s how
Easy targets
Data from Bank of America shows that 20% of households earning over $150,000 lived paycheck to paycheck in 2024, often due to expensive homes and high mortgage payments.
However, Bill and his wife seem to be spending just as much on their mortgages as they are on easily avoidable expenses. For example, they lease a vehicle, which Ramsey believes is unnecessary given their income. He suggested buying the car outright instead.
Additionally, nearly a third of their monthly expenses go to charity. While Ramsey supports generosity, he advised the couple to adjust their donations temporarily, especially since they aren’t investing.
Even high-income earners can struggle to save and invest, often facing lifestyle inflation and increased spending.
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Get help from a professional advisor
Seeking professional help from a financial advisor can be a game-changer when it comes to managing your money. According to Vanguard’s research, people who work with financial advisors see a 3% increase in net returns. This difference can be substantial over time. For example, if you’re starting with a $50,000 portfolio, you could potentially retire with an extra $1.3 million after 30 years of professional guidance.
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You can view advisor profiles, read past client reviews, and schedule an initial consultation for free with no obligation to hire.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
