Why Even High Earners Feel Broke: It’s Not About Money, But Mental Energy

It's a paradox of modern life: even with a hefty paycheck, many high-income earners find themselves constantly stressed about money, feeling as though they're barely getting by. While a six-figure salary was once considered a symbol of financial security, it now often feels inadequate in the face of rising costs and lifestyle pressures. According to CA Nitin Kaushik, the reason behind this feeling of financial insecurity isn't always about income, but about energy.

A recent Goldman Sachs report highlights this growing trend, revealing that a significant percentage of high earners are living paycheck to paycheck. Among those earning $300,000 or more annually, around 40% report that they are still caught in this cycle. This challenges the conventional wisdom that financial struggles are limited to lower-income brackets. The survey, conducted by the Federal Reserve Bank of Philadelphia, found that approximately 30% of those earning at least $150,000 expressed concerns about their finances in the next six months.

So, what's driving this phenomenon? One major factor is "lifestyle creep," where increased income leads to increased spending. As income grows, once-luxury expenses gradually become necessities, leading to larger homes, private schools, luxury cars, and lavish vacations. These elevated expenses, combined with debt burdens, can severely limit saving capacity and contribute to the paycheck-to-paycheck cycle.

Adding to the strain, the high cost of living in many metropolitan areas, especially in states like California, puts immense pressure on even high earners. Skyrocketing housing costs, significant increases in grocery prices, and rising insurance premiums erode a substantial portion of their income. As one Youtube video puts it, "it's not about living beyond your means, it's about living in a place where the cost of survival keeps moving faster than you can chase it".

However, beyond the tangible factors of expenses and inflation, lies a more subtle, yet equally potent force: mental energy. According to CA Nitin Kaushik, financial leaks often stem from emotional exhaustion, not insufficient income. Small, seemingly insignificant purchases, like a daily coffee or a spontaneous food delivery, are often driven by fatigue and the desire to regain calm after a stressful day. These impulsive buys, accounting for 70–80% of unplanned spending, slowly drain your wallet.

"Money doesn't run out first – energy does," Kaushik stated. He argues that when the mind is constantly in survival mode, long-term financial thinking shuts down. This decision fatigue makes it difficult to resist the temptation of instant gratification, leading to overspending and financial strain.

To combat this, Kaushik suggests a simple yet effective strategy: taking a 10–15 minute pause before making any significant purchase. This period of silence, free from distractions, allows the mind to cool down and regain clarity. "Half of the impulsive buys vanish when your mind cools down," he says. This isn't about self-control, but about allowing clear thinking to return.

The key takeaway is that financial well-being isn't solely determined by income. It requires a holistic approach that addresses both external factors like expenses and internal factors like mental energy. By managing expenses, protecting mental energy, and aligning lifestyle with long-term financial goals, high earners can break the cycle of financial stress and achieve true financial stability.