How High Earners Can Finally Stop Living Paycheck-to-Paycheck

Casandra Andrews  |  February 14, 2023

While inflation is easing up, eight million more people earning $100,000 and up are living paycheck-to-paycheck. You can break the cycle.

Those of us who are high earners — earning $100,000 or more per year — aren’t immune to monthly budgetary struggles. In fact, this demographic is struggling even more today:  51% of consumers who earn $100,000 or more per year say they live paycheck-to-paycheck, 9.3 million more than this time last year, according to data from LendingClub and PYMNTS. 

So, what gives? Inflation is certainly a factor, but the numbers are concerning. Even more concerning, says Anuj Nayar, LendingClub’s Financial Health Officer, is the increasing number of people earning more than $100,000 who say they have difficulty paying their monthly bills, which is far more serious than just living for the next pay period. In December 2022, 16% of these high-income paycheck-to-paycheck households reported struggling with their monthly bills – up from 11% in 2021.

Those living paycheck-to-paycheck often have little to no savings, and could face a financial crisis if they lost their jobs, which are typically their only source of income. That’s why spending everything you earn every month is so problematic: it doesn’t leave anything left to cover life’s little (or big) emergencies that can pop up. No one should put themselves in a position where unexpected dental work or a car wreck can lead you to financial ruin. 

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Rising prices for everything from food to fuel, among other factors, have squeezed the budgets of Americans at most income levels. “The cost of everything has gone up so (people) are having to make some pretty difficult tradeoffs,” Nayar says. “What we are seeing in the data – at the beginning of 2022 there was more spending on goods (cars and furniture) and then the spending shifted to services.” 

One place that spending went up from November to December in 2022 was on building materials (think home improvement stores), according data from the Census Bureau. 

“There’s no such thing as an average inflation rate,” he says. If you look at the December 2022 service spending rates, people are pulling back on services provided at hair salons and restaurant meals, among other things. 


While the phrase living paycheck-to-paycheck was once used to describe the working poor, that description no longer solely applies to those earning lower incomes. “This is happening across all income streams,” Nayar says. “We’re seeing the shift happen across all Americans.” 

In California’s Orange County, certified financial planner Nycole Freer, the founder of Eden Financial, says high-income clients have been reaching out recently for help with reigning in spending so they can start building up savings. “Lifestyle creep is a big deal,” Freer says. “You make more and then you end up spending more.” 


How can you stop the paycheck-to-paycheck cycle? The best way to do this, finance experts say, is to track where you are spending and then start to save something, starting now. “We encourage everyone to take a very hard look at their expenses and start putting something toward a savings account – even if it’s only $10 a week,” Nayar says. 

One of Freer’s current clients is living paycheck-to-paycheck and wants to stash cash away to help pay for college for her children. How is she making the adjustment? For starters, it means reducing the number of times a week the family goes out to eat or orders take out. “Start where there’s wiggle room,” Freer explains. “You can start small so you’re not overcommitting. Start with $50 a month and start building that (savings) muscle.”


One of the quickest ways to get control of your finances is to create a monthly spending plan, or go back to one that worked for you in the past. “I feel like you kind of have to learn these things and not everyone teaches you,” says Freer. “Most people weren’t taught how to make a budget. I didn’t learn until after college.”

Freer, who has been budgeting for about a decade now, uses an app to track her spending. “It’s linked up to my credit cards and every transaction comes through and goes into a category so I can keep an eye on it.” She reviews the app weekly and uses it to tidy up her expenses at the end of each month.

For a new budget to be effective, Freer suggests looking back through three months of financial  statements (bank and credit union accounts, credit cards, Venmo, etc.) and seeing where the money is going. She suggests putting it down on paper to make it more real. For more on how to create a budget, check out these ideas. If you’re looking for a little more hands-on help with your money — with a dedicated money coach and a class full of accountability partners— then we’d love for you to join our 8-week FinanceFixx course, which can help set you on a better financial path. 


The reason that saving every single month works so well is because the money is there when you need it. Sometimes, you may not need it for a year or more. Then, the wheels fall off. 

“While the nature of an unexpected expense could change,” Nayar notes, “you will have something happen that will completely derail your budget a couple of times a year. It’s a fact of life. The more you can shy away from putting expenses on a credit card – rates are now at record highs and balances are now at record highs – the better.”


Nayar, from LendingClub, reminds people that they have options to tackle their debt so they can beef up their savings: “You can also take all those high-interest credit cards and put them into an installment loan – that way you know how much you will be paying each month. Getting yourself debt free is one of the hardest, but one of the most important things we can do.”

If high-interest debt is an issue, one option could be seeking help close to home. The National Foundation for Credit Counseling at NFCC.org is a good resource for finding a counselor in your area. 


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