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The following is a guest post from Debt & Cupcakes on how to make a lot of money and yet still manage to fail financially.  He’s got amazing wit and humor, which is partly the reason I asked him to guest post on my site.  He also tells a compelling narrative.

His content regularly makes me laugh and his story also teaches me people can change and take control of their money.  No matter if you make a lot of money or qualify for the earned income tax credit, managing your money is important.

(turns on seductive music)

Oh, hey there internet. I didn’t know you were watching…

Since you’re here, I’d like to take you all on a walk down memory lane.  The year was 2013, our household income was around $130,000 a year, and we were broke.  So.  Broke.

I’m not here to tell you some sob story.  We didn’t stumble onto hard times, or have some drunk sibling steal our identity. No, we were simply terrible with money, and living in a world of financial denial.  My wife and I have jobs that make a lot of money.

In 2018, we grossed a little over $180,000. For 2 Registered Nurses living in the rust belt, that’s damn good!

Granted, our income hasn’t always been this high.  There was a time when we grossed around $80,000 a year, which is still above the median household income so it’s not a complaint or an excuse. What I’ve come to realize is, it didn’t matter how much money we made.  Our income was almost irrelevant because we were financially illiterate.

The more we made, the more we spent. We updated our lifestyle as fast as we upgraded our income. Our financial bucket had a giant hole in the bottom.  No matter how fast we dumped water in, it poured out in the form of arbitrary possessions and other unnecessary over-spending.

At the end of every month, I’d peek into our checking account like a parent checking a baby’s diaper.  One eye open, gritting my teeth and holding my breath.  I’d anxiously wait for the account to load to see what financial turd was waiting for me.

I’d close the month out in a bewildered stupor.  “How are we making so much money, but saving less than $500 a month?”

Then it hit me… I have to actually pay attention to this shit.  Whoa. (mind blown)

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Race Cars Burn A Lot of Gas

Imagine that the “car” is our lifestyle and the “gas” is what we spend. The more we earned, the more gas we dumped into what came to be our financial Lamborghini.  Each year, we drove faster and faster.

Before we knew it, we were sporting a figurative Hummer doing 110 down the highway, running red lights and howling at the moon! Our carbon foot print would reduce the ozone layer by 20% annually.

We operated under the assumption that if we earned it, it was only right to just spend it.  No matter how much money we earned, we found new ways to part with it. If we had a desire, or childish want… we rationalized why we should buy that shit… well, technically… we couldn’t “buy” anything.

After all, we really didn’t have any money on hand. 0% interest was a sexy voice from behind the curtain.  Whispering sweet nothings into our ears and convincing us that “using the bank’s money to finance something was intelligent”.

We lived for those low, easy monthly payments…and life was good. We didn’t have any actual money.  Our savings account was always shy of $5,000, no matter how much money we made.

When you’re bringing home $7,000+ a month, a $300 payment barely pinches.  We could finance the world, or so it felt. Our race car was cruising right along.  Speeding past everyone on the highway to financial failure.

Related: Should You Invest or Pay Off Student Loans?

We Have Careers That Make A Lot of Money and Don’t Need to Budget

The best thing about bringing home a comfortable amount of money is the fact that you don’t have to budget.  You’re exempt.  I’m surprised you didn’t know that…What’s the worst that can happen?  We over draft our account and need to move $35 out of our savings?  (blows nose with a twenty dollar bill)

To us budgeting was an unnecessary, self-imposed constraint.  If I wrote the budget, my wife felt like I was controlling her.  If my wife talked about our finances, I felt like I was being nagged. So, the easiest and most logical thing to do was… ignore it.  (BOOM)  How to be an adult 101, baby.

Each month would come and go, our bank account would fluctuate like Oprah’s weight in the 90s.

Ok, I feel like I’m lying a little… I did keep track of our bills by creating a budget in excel.  After all, I had to make sure that we kept up on all of the shi… stuff we “owned”.

I’d make a list of all the monthly bills in our debt tracker spreadsheet, the amount and when they would come out.  I’d typically leave $1,000 to $1,500 in as a buffer.  You know, in-case one of us took up a blow habit.

That “buffer” wouldn’t be tracked or monitored in any way.  If we noticed that it got to a low point, my wife and I would hope the other didn’t buy anything. Sometimes we’d forget to check it, and over draft the account.  This was our personal budget plan… Impressed?

In our minds we made more than enough money, and we didn’t have to pay attention to it.  Duh.

We Make a Lot of Money…So Treat Yo Self

One of the greatest things we can do as humans is rationalize, and one of our favorite phrases was “we work hard for this money.” Technically, it wasn’t untrue.  We work some pretty intense corporate jobs.  Some weeks the emotional toll is high.

Those weeks we typically found a reason to treat ourselves.  Whether it was dinner out, an unexpected date night, or a big purchase. We bandaged our corporate wounds with $100 bills.

Statistically, we weren’t a minority.  We lived pay check to pay check like the rest of Middle America.  The difference between us (high earners) and the average Joe was that our struggle was self-inflicted.

We updated my wife’s Chevy Cavalier to a nice Jeep.  I turned in my paid off Chevy pick-up for a kick ass F-150. We spent $400 a month on restaurants, and I’ll sneak this in here…  I bought a $23,000 tractor.

Why did we do this?  We felt that we deserved it, after all… we worked damn hard for that money.

I’ll wait until you catch your breath…

Are you back?

Ok, let’s move on.

I’m not bragging about our ability to spend, it’s actually embarrassing when I write it down like this. Every. Single. Purchase was made in an effort to make us “happy”.  This type of emotional spending led to a debt bill just over $109,000.


Related: Should You Pay Off Your Mortgage Early?
5 Simple Ways to Pay Off Your Mortgage Faster

How the Monthly Payment Trap Prevents Financial Success

Back in 2013, if you would have asked me to come up with $35,000 to actually buy that F150, I would have looked at you like you had 10 heads. Who has $35,000?  I certainly didn’t have the patience or willpower to save it.  Why would I?  I can head over to the Ford dealership and leave with a shiny new F-150 without spending a dime.

0% interest for 60 months?  Girl, BYE…

Let’s make it 72 months and lower that payment! I’ve got more shit to buy!! (moon walks out of the dealership)

That payment would be about $486, and it would take me 6 years to save up $35,000 at that pace.  6 years!  I might be on my 2nd or 3rd truck by then. I didn’t have the time or patience to actually learn how to save money.

I could easily afford $486 right now, and obviously I wasn’t one to put off my childish wants or desires.  No, no.  I fed that beast with prime rib.

The low monthly payment trap had a tight hold on us.  As a high earner, it didn’t sting to pay a few hundred dollars a month. We actually believed that we were using intelligent financial decision-making because we weren’t spending “our money”.

By using the bank’s money, we felt that we would be able to save our money for the future.  We didn’t, but it felt like a really smart thing to say back then. I don’t believe the monthly payment bug is isolated in the high earner community.  Low to middle earners also live by the monthly payment mantra.

It’s easier to figure out how to part ways with a low percentage of your monthly income than it is to save for an extended period of time.

Learning how to save money for the long term requires patience and the ability to set aside wants for needs.  This was a skill that took us many years to learn.

Even If You Make a Lot of Money, Financial Success Isn’t Guaranteed

Once the financial smoke cleared, we combed through the ashes and found that we had a lot of debt, and not an intelligent plan to get rid of it. We did eventually pay off that $109,000, took part in a no spend challenge or two and straightened our financial lives up, but I am a prime example that even if you make a lot of money it doesn’t guarantee financial success.

We didn’t have a monthly plan, we lived pay check to pay check, and talking about money felt as uncomfortable as having sex in front of our parents.

It’s just not something you should do… well, I hope not anyway.

Just like any other tool, if you make a lot of money, it must be used appropriately.  You wouldn’t try to build a house with a spatula.  So, you shouldn’t just use your income to just pay monthly payments.

We’ve learned that being frugal, maxing out our 401ks, and packing a brokerage account with 60% of our take home pay each month will lead to the life we actually wanted.

Will it take a while to get there?  Sure, financial independence is a long game.  If we keep this pace up, I think we can be financially independent in 6 years.

6 years… That was the loan life of that F150.

If given the choice to be financially independent or owning a 6 year old truck, which would you choose?

I hope you choose your life, and realize that it’s worth more than those easy, low monthly payments.

Readers: Did you let lifestyle creep get the most of you?  Have you managed to tame your spending and learn how to save money?  Please share your thoughts below as well as consider subscribing to the newsletter if you found this post useful.


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About the Author and Blog

In 2018, I was winding down a stint in investor relations and found myself newly equipped with a CPA, added insight on how investors behave in markets, and a load of free time.  My job routinely required extended work hours, complex assignments, and tight deadlines.  Seeking to maintain my momentum, I wanted to chase something ambitious.

I chose to start this financial independence blog as my next step, recognizing both the challenge and opportunity.  I launched the site with encouragement from my wife as a means to lay out our financial independence journey and connect with and help others who share the same goal.


I have not been compensated by any of the companies listed in this post at the time of this writing.  Any recommendations made by me are my own.  Should you choose to act on them, please see my the disclaimer on my About Young and the Invested page.

Interested in financial independence and entrepreneurship?

Start here with useful resources delivered to your inbox.

Join the discussion 14 Comments

  • Xrayvsn says:

    Thanks Riley for introducing me to this blogger. You are spot on that he is quite a wordsmith and really highlighted the issues with society today.

    Doctors are some of the highest earners in the country and there are many living paycheck to paycheck because of lifestyle inflation. I justified my frivolous expenses because I deserved it sacrificing so much to become an MD.

    That line of thinking set me back a decade if not more. Fortunately once I was focused the turnaround was remarkable and quick

    • Young and the Invested says:

      He’s the first blogger I connected with- you being the second!

      His entire narrative around lifestyle inflation was told so well. I’ve not truly experienced it because I’ve tended to be more frugal most of my life, so I can’t empathize. However, I can understand how anyone who goes from de minimus income to massive income (relatively speaking), can suddenly be at a loss for how to handle this newfound windfall.

      Luckily, both you and he managed to find your way and navigate back to the path of financial independence. May we all reach there someday.

  • Money Mage says:

    I love the bit about cars, they are my current pet hate. The ‘need bigger, better, faster’ mentality of them, especially in the UK where they are basically just rent-to-own-but-never own for the masses.

    Way better to drive a nice, run of the mill, economic vehicle that’s comfortable and efficient.

    • Young and the Invested says:

      Couldn’t agree with you more. I’ve got a 2010 Toyota Camry I intend to drive until the wheels fall off. I’d rather spend that amount of money on something which appreciates in value if at all possible.

  • Timothy M says:

    Great post! As a single mid 20s adult living in NYC, I understand this to the T. I make quite a substantial amount of money for my age and work incredibly long hours, which led to this mindset that I can buy whatever I want because “I earned it.” I’m a big believer that it is 100% to “treat yo self” in order to keep pushing forward, but as long as you understand balance and discipline. I’ve slowly started to learn how to do that better and now I’ve focused on my monthly restaurant expenses.

    • Young and the Invested says:

      It’s wonderful to hear you’ve been able to recognize the balance of treating yo self and also pushing forward toward longer-term goals. Learning to do that better at an early age will help you tremendously over time.

      Choosing to focus on one element of your budget at a time can be a step-wise change to make the overall effort less-daunting and more likely to stick long-term. Best of luck and please do provide updates. Thanks for stopping by.

  • I relate to a lot of this, as I suspect many in high-income professions do. We didn’t necessarily have the same vices, but the way my husband and I thought about money was very similar. Glad we both turned things around before it was too late. Great read!

    • Young and the Invested says:

      It’s never too late to make a change. Lifestyle inflation is too easy to justify as your income heads north. As you earn more, you can feel you deserve more.

      But like the Red Queen Effect, where we run faster and faster only to stay in the same place, we must avoid adjusting our spending upward with our incomes. This difference creates savings and more importantly: a way toward financial independence. Earning a high income is not a means to an end if you’re dependent on it to finance your lifestyle.

      Thanks for stopping by and reading!

  • Mr Shirts says:

    It’s amazing to me, I work in finance and watch high income coworkers who should know better blow through most of their paychecks. It puts other professions to shame, there’s just this belief that money is a renewable resource.

    Nice post

    • Young and the Invested says:

      You would think working with money on a daily basis would provide some unique insight into how it should be managed. However, there appears to be little correlation between regular interaction and prudent decision-making.

  • Ah, I can relate to this post too well!

    This post is freaking amazing! My income progression represented more expensive tvs and vehicle upgraddes. We continually bought things we couldn’t afford and paid off around $100k-$150k of credit card debt over 15 years. My income couldn’t keep up with my spending. But the good news is we are debt free and are turning from our evil ways. This post made me laugh interally (and externally)!

    • Young and the Invested says:

      I was very happy to have Debt & Cupcakes share his story on my site. I wanted to showcase a post detailing how a high income doesn’t excuse not having a budget from someone who lived it. I feel the message comes across more sincere when told from experience.

      And Debt & Cupcakes absolutely nailed it. The story was told well, he dropped in his signature humor, and he told a compelling tale complete with happy ending and a moral to the story.

  • Oh, this is so dangerous. That is why they say “it is not about how much money you make, but how much you save”. And think what would have happened if one of you lost your job. You would have been so addicted to your lifestyle and in addition, don’t have savings to take care of you. You would really struggle to handle the new life.

    Starting to earn a lot of money and spending more and more is called lifestyle inflation. It becomes an addiction. And by itself, it is not necessarily a problem if you have a buffer. If you have a buffer you are okay. The best is to have the buffer before you start spending and keep saving at the same time and scale up your lifestyle slowly.

    • Couldn’t agree more. I’m happy to report the couple featured in this post have managed to add a significant buffer to their financial picture. As described in the post, they’ve turned things around financially and begun to see what controlling their spending can do for them.

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