US Couple Earns £484k A Year, Give Away £8K Monthly—So Why Are They Living Paycheque To Paycheque?

A San Diego-based married couple earns over £484,000 annually but ends up spending over £24,200 per month. They shell out £9,681 on two mortgages and donates between £6,454 and £8,068 to charities every month. The remaining goes towards essentials and miscellaneous costs. After adding taxes, they hardly save any money despite their hefty paycheques.

Bill called the Dave Ramsey Show for guidance on how to break free from living paycheque to paycheque. Financial expert Dave Ramsey bluntly said that a lack of budgeting affects families regardless of income level.

Bill admitted they also lease a car for £605 monthly. The couple's financial situation is similar to many high-earning US families who struggle to save money due to unchecked spending and high mortgage payments. Bank of America data revealed that one in five US households earning over £121,000 annually lived paycheque to paycheque in 2024.

Lifestyle Creep Is An Emerging US Household Issue

Lifestyle creep is a common issue where higher incomes lead to higher spending without extra savings. Furthermore, people tend to avoid budgeting as their income levels go up, sometimes thinking they can simply earn more money to make up for uncontrollable spending.

However, Ramsey confessed he had once made the same mistake. "I went through a period of time in my life where I thought I could outearn my stupidity, my lack of organisation, my lack of detail...You can't," he said.

Ramsey told Bill: "You're kind of throwing a bale of dollars over the fence and then coming back to see what's left later."

Other factors, such as a prolonged high interest-rate environment, easier access to credit, and the emergence of risky investment instruments, have strained US household budgets and increased impulsive spending trends nationwide, especially for those without financial education or budgeting skills.

Ramsey's Straightforward Solution For The Couple

First, Ramsey urged Bill to cut back spending on non-essentials immediately. "Why do you have a car payment when you make $600,000 (£484,000) a year?" he asked, implying that the couple should have purchased a vehicle outright.

While Ramsey appreciates generosity, he suggested the couple should reduce their sky-high charity contributions or temporarily halt those monthly payments to free up cash they could invest.

"I'm not against generosity in any form. I tell folks to do it all the time, but if you're doing zero investing and giving 20%, you may need to adjust that, at least for now," he explained.

Recently, Ramsey discussed the best time to buy a home this year. He said the time frame between August and September, which is late summer to early fall, is the ideal time to purchase properties as fewer buyers are looking for houses during this period, and inventory remains elevated after a spring selling season.

Overall, he said a realistic budget, cutting back on unnecessary expenses, temporarily reducing charity contributions, and investing the surplus should help the couple save enough money. However, they should act on it before they land in a major financial crisis.