Rachel Cruze: 4 Reasons Why Many High Earners Live Paycheck to Paycheck
Written by
Ashley Donohoe
Edited by
Zuri Anderson
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The Ramsey Solutions “State of Personal Finance in America” study noted that 53% of Americans lived paycheck to paycheck, including 72% of individuals with incomes below $50,000. More surprisingly, this financial struggle was also a reality for 36% of six-figure earners.
In a recent video, personal finance expert and author Rachel Cruze broke down why so many high earners still struggle to live on their incomes and build wealth.
Regardless of how much you make, you can use Cruze’s insights to become more financially secure.
Increased Cost of Living
Higher basic living expenses are an issue for many Americans. Cruze cited a 2024 U.S. Bureau of Labor Statistics report, which showed that the average household spent $77,280 in 2023. More recent BLS data for the second quarter of 2025 showed that the median income was $62,712 per year ($1,206 per week). Even if expenses hadn’t risen since 2023, there would be a gap.
Cruze explained that location plays a major role, as you’ll likely pay more for your housing, food and other essentials in popular cities than in smaller towns. She also said that the number of children and incomes you have in your family will affect how you manage your expenses.
If you’re struggling to get by on your salary, considering relocating to a more affordable area or changing jobs may be worth it. Cruze suggested trying out this cost-of-living calculator to estimate the potential savings and the salary you’d need.
Lifestyle Creep
Whether you get a promotion, change jobs or simply receive a raise, that extra income can lead you to make unwise decisions that may leave even high earners financially struggling.
“As you continue to make more, if you’re not careful and you’re not diligent, you will just keep spending up to that line,” explained Cruze. “And so you have to have the discipline to say, OK, here’s where our lifestyle is.”
While slightly raising your expenses doesn’t spell disaster, Cruze suggested using much of your extra cash for purposes that make you more financially secure. For example, you could save up several months of expenses for emergencies, clear your debt and contribute toward your retirement.
Debt
While you might see credit card debt as more common for modest-income Americans, a 2025 BHG Financial study found it was also a problem for 62% of those earning more than $300,000.
Cruze discussed the psychology behind how people often judge affordability based on the monthly payment amount. While the amount might seem more reasonable for someone with a high income, debt payments will add up, and that’s money that can’t go toward important living expenses.
Besides juggling the payments and losing money to interest, you’ll also have fewer wealth-building opportunities if you’ve got debt. Once you’re free of debt, you can invest more of your money and get a return rather than paying to borrow someone else’s money.
People Around You
“What you’ll see is as you make more money, you tend to spend more time around other high earners,” Cruze said.
Due to your surroundings, you may find yourself spending more to keep up with those people and viewing a lavish lifestyle as normal. This could look like paying for a fancier house, frequent vacations and an expensive private school for your kids.
According to Cruze, this changed perspective on money can lead to unknowingly living a paycheck-to-paycheck lifestyle, which can also result in debt. This shows how it’s important to know your budget, track your costs and spend more intentionally regardless of a high salary.
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