You know the popular clause about, ''the more you earn, is the more you spend'', has become quite a huge reality in our day today. One would think, people who earn more should have a reasonable amount saved up somewhere, but that is not the case at all. Some analyses were carried out by some financial experts, and they came down with the description of people who live paycheck paycheck as those who spend over 95% of their income to cover household necessities, which cover; the internet, feeding, gas, public transport, child care, and household costs.
Bank of America says, households with higher incomes have been stretched extensively because they have purchased bigger and more expensive homes, and what this means is, higher costs on insurance, property tax, and utility bills. With inflation taking charge of things, you can tell that the financial strain will tell so much about their finances.
People now have access to their money than they used to have years ago, it is easier and faster to take out money and use it as pleased without getting questioned by anyone, and once a person begins to earn more, their perception of money changes, as they begin to spend more on luxurious items. A high-income earner could comfortably spend all they have because they are sure another one would come in after some time, this act or mindset creates the urge to spend even on those things you do not need.
There were a statistics that showed, if you give a person who usually earned a monthly income an opportunity to earn weekly, there is a higher chance that such individual would spend much more than they would usually earn on a normal day. High income earners also see the need to accumulate debts since they are sure of being able to pay back once their income comes in.
If you are from a country like mine, and your family members know that you are earning much, then it will become your sole responsibility to begin to carry all family expenses on your shoulders which will eventually create a strain on your finances and make you spend excessively.
There is a phenomenon called Henry's phenomenon, where high-income earners are classified as not being rich yet, this means they are earning high income but have not been able to build wealth effectively as a result of their spending habits. A terrible habit that, high-income earners consistently do is to live for the moment, and this creates great stress on their finances.
Society has convinced high-income earners to live the part, and always show off. Unfortunately, even without admitting it, there is an urge to spend more to impress family, friends, and even those who do not care about you.