I Make $100,000 And Live Paycheck To Paycheck

I’ve been practicing financial planning for over 21 years, and there is a new financial phenomenon spreading like cancer.    I haven’t come up with a name for this group yet, but there is a growing population of people between the ages of 30 to 50 who make more than $100,000 per year and are literally living paycheck to paycheck.   Are these people lacking a college education? No!    Are these people lacking a comprehensive set of benefits from their employer? No!   Are these people who are having lots of money garnished from their paychecks every two weeks? No!   So how is this group getting so far behind financially while making so much money?

According to a report from the Consumer Federation of America and the Consumer Planner Board of Standards, Inc., 38 percent of household live paycheck to paycheck.   In 1997, this figure was 31 percent.  (source: huffingtonpost.com)  A report from earlier this year found that 43 percent of Americans don’t have enough money saved up to weather a financial emergency. In other words, 127.5 million people are one mishap away from joining the ranks of the 46 million Americans living below the poverty line.   (source: huffingtonpost.com)   All of this speaks to the financial difficulty going on across America, but how are the higher earners facing the same challenges?

The first problem I see is that many of these households have never made themselves a spending plan.     They worked really hard to get to a six figure income, and when they finally get to that level they figure it is enough income that they really should be able to buy whatever they want.    If they feel like eating out four times a week . . . no problem.     A holiday vacation in Costa Rica during the most expensive time of the season . . . then I am worth it.     Designer clothes or merchandise on sale . . . then get it while there is a deal.    Since there is no measurement system in place holding a six figure income family in check on how much they spend, unfortunately many of them are spending everything they make.  In addition, they can’t account for where they spend it when you ask them.

The second problem I see is that most of these people do not have a pay yourself first mentality.  They have a pay myself last mentality.    Since there is an internal level of arrogance that there will be a never ending supply of jobs that will pay them $100,000 or more because of their skill set, the urgency to put away money for retirement or a rainy day generally falls to the bottom of the pile.   I encourage these types of earners to get used to living off of their base income and bank their bonuses.    Six figure paycheck to paycheck families generally spend their bonus by earmarking it for a discretionary expense before the money even comes into their household.

The third problem I see is that the six figure paycheck to paycheck earner feels ashamed to have to ask for professional help.     We all know how hard it is to make a $100k let along $300k or $400k in household income.   Earners at this level tell themselves that if they are smart enough and good enough to make this type of income that they should be able to figure out their family finances.  I mean, how hard could it really be??   The flaw to this logic is that it takes a specific set of skills and expertise to know how to build a family financial plan, balance sheet, and income statement.     It also is extremely hard to discipline yourself which is why many of these people are living paycheck to paycheck.

The last problem is simply making poor financial decisions without looking at the entire picture.      Many six figure income households will either buy too much home (or too many homes), to pricy an automobile, or not consider the ramifications on items like sending their kids to private school versus public school.    By making poor choices around their total financial picture, it puts a tremendous amount of strain on having to earn more versus living comfortably off of the six figure income.

In a CFP Board Survey, more than twice the percentage of respondents who identified themselves as planners — in comparison to those who admitted to not having a comprehensive financial plan — said they are also living comfortably. This gap between planners and non-planners held true across income brackets — households making just around national median income as well as those earning an excess of $100,000.      I believe this trend will continue in America without more families getting back to basics and building a sound financial plan.   Do you have little to no debt?  Do you have an adequate cash reserve?   Are you paying yourself first to reach your financial goals?  Are you adequately protected?    Or, are you just one paycheck away from wondering where your next paycheck will come from?    Make a smart money move and build a plan to turn your six figure income into a seven figure net worth!

Here are additional resources to help – https://aaacreditguide.com/

Check out some tips and tools in this article to help you stop living paycheck to paycheck.

Written by:
Ted Jenkin

Request a FREE No-Obligation Consultation: www.oxygenfinancial.net

Ted Jenkin is a frequent guest columnist for the Wall Street Journal and Headline News Weekend Express.  He is the co-CEO of oXYGen Financial.  You can follow him on LinkedIn @ www.linkedin.com/in/theceoadvisor or on Twitter @tedjenkin

About the author  ⁄ Ted Jenkin @ Your Smart Money Moves

Ted Jenkin @ Your Smart Money Moves


My friends and family all think I’m a workaholic, but I say I’m just a guy that loves to help people do better in life.

My mother is still the only one that calls me by my real name Theodore Michael, my wife calls me Teddy, but for the rest of you it is just plain old Ted.

Ever since I was a little kid, I always loved money and being an entrepreneur. In fact, I still have cassette tapes of me talking to my grandmother at the age of five and my mother tells me all the time how much I played with money as a kid...

Read More About Ted Here

Ted Jenkin is a frequent guest columnist for the Wall Street Journal and Headline News Weekend Express. He is the co-CEO of oXYGen Financial. You can follow him on LinkedIn @ www.linkedin.com/in/theceoadvisor or on Twitter @tedjenkin.

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice.

The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor regarding your individual situation. 

Background and qualification information is available at FINRA's BrokerCheck website.


  • August 5, 2012

    A lot of these people simply make bad decisions such as living house-poor. Meaning that a large percentage of their income goes toward housing payments for a McMansion.

  • August 12, 2012

    This is not a surprise and it happens all over the world. Budgeting family/individual finances can be a tedious job but one that will let you sleep better at night. I hope that whoever reads this post takes a step back and evaluates their spending habits. “It’s not about how much money you earn, it’s how you spend it.”-Mr.CBB

  • August 14, 2012

    Ted, share with us your experience about living paycheck to paycheck earning $100,000+.



  • Ted Jenkin @ oXYGen Financial
    August 14, 2012

    @Financial Samurai

    I have personally worked with over 3,000 clients and many of them made more than $100,000 as a family. My experience is that as the income levels increase for families so does the expansion of their spending. Consequently, when income begins to contract somewhere down the line, families have a very hard time contracting fixed expenses or their discretionary spending habits. It’s always best to make a yearly spending plan and try to live either off of just your base (or just one income in the family). That way you can save any extra commission, bonus, or stock options. The biggest mistake a family can make is to have their overall mortgage payment (including taxes and insurance) be more than 25% of their overall net monthly income.

  • August 20, 2012

    I’m guilty of not paying myself first. But I’ve always had money left over to save and invest. To me a big part of someone’s views towards financial management has to do with their upbringing. My parents are very frugal, so even though I earn more than some of my friends today, I still spend less than them because of my background. My plan is to reach a six figure income some day and eventually become a millionaire!

  • February 11, 2013

    Good luck with the FMF tournament! just voted for you.

  • Ted Jenkin @ Your Smart Money Moves
    February 11, 2013

    Thank you very much!

  • February 11, 2013

    Great post, I found this one on FMF, will vote for you.

  • Ted Jenkin @ Your Smart Money Moves
    February 11, 2013


  • February 11, 2013

    The name I have heard for this group is HENRYs. High Earners Not Rich Yet. Although with the people you describe it sounds like it should be Not Rich Ever.

  • Ted Jenkin @ Your Smart Money Moves
    February 12, 2013

    You never get rich until you learn the pay yourself rule first—save 20% off the top and never touch it, then you’ll be in great shape. Get your lifestyle to live off the other 80%.

  • chris
    March 22, 2013

    Whoa this is sad. Even 25% of your income toward home seems crazy expensive to me. My wife and I purchased our home when we made like $60k and our monthly payment with taxes/insurance was around 23%.
    We just refinanced and now we make about $130k and it is now 8% of our income.
    I never really thought we’d make this much money, but both our families were fairly frugal. I drive a $3000 car with 135,000 miles on it and my wife drives a $3500 van with 150,000 miles on it. Some that I work with know how much I make and always think I’m going to go out and buy a new car when i get a big check… umm no that’s foolish – I’ll drive this thing until it’s unreliable then buy another $3-5k car.

  • Ted Jenkin @ Your Smart Money Moves
    March 22, 2013

    I love your car strategy. Drive it into the dirt. Thanks for the great comments.

  • greg
    April 7, 2013

    From some 25 or 30 years ago, check out “Getting by on $100,000 a Year” by Andrew Tobias. He foresaw the problem….and $100000 was worth a lot more back then. (And we didn’t have a government war on savers, either)

  • Ted Jenkin @ Your Smart Money Moves
    April 7, 2013

    So true—most of us don’t really value a dollar anymore

  • May 2, 2013

    No matter how much you earn you can make some really bad financial decisions. NEVER live beyond your means. I suggest from the beginning to have a budget and stick to it. Besides, you never know when you might lose that income, and you just might lose everything else if your not careful.

  • Ted Jenkin @ Your Smart Money Moves
    May 3, 2013

    I agree never live beyond your means, but it is not easy

  • June 10, 2013

    When you mention in the comments here 20% off the top that you never touch and live off the rest are you suggesting that 20% be allocated to Retirement accounts only? What about goal savings? Are you suggesting funding goals outside the 20%?

  • Ted Jenkin @ Your Smart Money Moves
    June 11, 2013

    I’m suggesting to get used to getting 20% off the top to go to retirement and/or other savings goals. Until I see a personal financial plan for an individual client, it’s hard to make a blanket statement on the best way to allocate that 20%

  • June 12, 2013

    Of course customized per individual is the best way to go, but 20% is your rule of thumb for total savings.. Allocation of that 20% should be determined by personal situation. I like that strategy.

  • July 12, 2013

    I live paycheck to paycheck and I’m damn happy, I have a 4000 square foot house and drive a older Porsche . Live the now, screw the future. Too many misers save all their life just to die 1 year after retirement :)

  • greg
    July 14, 2013

    Fewer ‘misers’ than you might think die just after retirement. Look at the bright side, though.
    Cat food seems to be better tasting these days….at least it smells better. Of course, it’s getting
    more expensive too…..bon appetit…..

  • Ted Jenkin @ Your Smart Money Moves
    July 29, 2013

    I guess it’s the age old adage. To each his own. Take a lot of pictures:)

  • Ted Jenkin @ Your Smart Money Moves
    July 29, 2013

    There always a balance of spending and saving. There are also many people who live til 100.

  • Jessica
    September 30, 2013

    Great Article! Something very relevant today among those in the income bracket you speak of. I, certainly, agree people should take the time to invest in financial coaching/leadership the same way they do with many other aspects of their life. The pay off is priceless!

  • Ted Jenkin @ Your Smart Money Moves
    October 2, 2013

    Thanks for the comment—we can help everyone do better!

  • john
    January 13, 2014

    I would like to know the 1st three steps to head me in the right direction. Could u give me a list of who I may go to consultation

  • Ted Jenkin @ Your Smart Money Moves
    January 20, 2014

    It would best to come see us as we have helped many people turn a six figure income into a seven figure net worth. Here would be my first three steps.

    1) Assess your overall income, taxes, and expenses so you could identify where everything is going. Within this step, determine the emotional stresses on the why behind money is being spent. (i.e.- too big a house, high children expenses, excessive dining and entertainment)

    2) Identify & Priortize your goals. It will be important to figure out where to marshal resources once the goals are set. This can help back into overall planning, spending, and saving numbers.

    3) Get some electronic dashboard. We often succeed at what we can track, inspect, and make visible. This will be really important for the first 90 days.

    If we can be of any help- e-mail me at ted@oxygenfinancial.net for a meeting-

  • Ken
    September 16, 2014

    But I too old to save a Mil now…….58, but have been saving more than 20% for several years now

  • Ted Jenkin @ Your Smart Money Moves
    September 21, 2014

    have to take a look at the portfolio and where your income is at. Even if you don’t get to a million, keep saving that 20%!

  • April 27, 2015

    A high income with no brains behind it? That’s just a recipe for disaster. Just ask most lottery winners or MC Hammer.

    You’re dead on about people not asking for help. In school your grades were your scorecard, the higher the score the smarter you were. In adulthood your paycheck is your scorecard, but unfortunately, the same correlation to intelligence can’t be made. That doesn’t stop people from trying though.

  • Ted Jenkin @ Your Smart Money Moves
    April 30, 2015

    It’s always about what you keep!

  • April 6, 2017

    I agree with most of your analysis, but would add as someone who spent quite a bit working in and around wall st that the more you make and the more stressful your job, the more likely you are to reward yourself with financial excess: for women it’s expensive shoes or bags and for men it is usually expensive watches or cars.

    I think there are more issues at work here in my opinion.

    Thx. Interesting topic!

Leave a Comment