The Rachel Cruze Show - The Right (and Wrong) Ways to Buy Happiness

Episode Date: January 16, 2023

In this episode, we talk about how money affects your overall well-being. First, we look at what a minimalism expert says about how to buy happiness (is it possible?). Next, I sit down with Dr. John Delony to discuss the mental, relational and physical ways money impacts your life. And then we look at the habits keeping high-income earners broke.   In this episode: ·      3 Ways You Can Actually Buy Happiness ·      5 Areas That Can Make or Break Your Financial Success (With Dr. John Delony) ·      Why People Making $200K Are Still Broke   Helpful Resources: Christian Healthcare Ministries EveryDollar The Dr. John Delony Show                                                 Sponsors pay the producer of this show, The Lampo Group, LLC, advertising fees for mentioning their services or products during programming. Advertising fees are not based upon or otherwise tied to any product sale or business transacted between any consumer or sponsor. The following sponsors have paid for the programming you are viewing: Christian Healthcare Ministries.   Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy Learn more about your ad choices. Visit megaphone.fm/adchoices

Can your income level help you do great things? Absolutely. But it also can help you do really damaging things. So that's why it's really important to really fight for what you're doing with your money and your money habits. So be looking at your budgeting. Hey guys. Welcome to the Rachel Crewe Show podcast. I'm so glad that you're here. So in this episode, we're going to talk about the right and wrong ways to buy happiness. I'll talk about why people making $200,000 a year are still broke. and what we can be doing differently to save more and spend less. Then you'll hear a conversation I had with my friend and Ramsey personality, Dr. John Deloney, on five money areas that will make or break your financial success.

You don't want to miss it. But first, let's talk about three ways you can actually buy happiness. Take a listen. That's right. YouTuber Joshua Becker is claiming that he has data to prove that it is possible. So I don't know about you. When I saw that, I was very curious. So I wanted to just dive right in.

So about a year ago, Joshua Becker, a minimalism expert and host of a YouTube channel becoming minimalist, shared a video on three ways to buy happiness according to research done by Harvard Business School. So the video went out. It's gotten over a million views. And again, people are fascinated by the subject because you hear money doesn't buy happiness. Money doesn't buy happiness. And there's a part of me that I'm like, I mean, it's true.

Like, you can just buy a bunch of stuff, but it doesn't truly fulfill you. So when I saw this come up, I was like, okay, I'm curious how he breaks this down. So what does he say in the video? Well, first, he claims that buying experiences will bring you happiness, particularly if it's a shared experience with others. So he talks about that the research shows that sharing experiences with others brings more lasting happiness than physical possessions. Fascinating. Because when I wrote the book, Know Yourself, Know Your Money,

people tend to spend their money on actual things or experiences. You kind of lean one way or the other. And I never wanted to put like a moral code to it, right, to say that if you're this one, you're right or wrong. It's just kind of your tendency. But always that medium is ideal to be in, not one extreme or the other. Because I do think that buying things, that improve your life is not a bad way to spend money. But I personally do love experiences. I love going out to a nice dinner or going on a vacation, all of that. So I do tend to lean towards enjoying life more when it's an experience versus an actual thing.

But I also found that there was an article in Forbes detailing why travel, aka a purchased experience, can actually lower your risk of depression and rewire your brain. I mean, I don't know, but maybe. So I can see this, though. And especially I love that they had kind of the asterisk that when you experience, have a shared experience with people that you love, there is a connection point there. Dr. Les Perra used to talk about this a lot when we were doing an event together a few years ago because he said, you know, when you go on a date night, don't just go to dinner or go see a movie,

like do kind of the normal things that you guys just normally do. Go do an experience. Like go and like do a trapeze class or an obstacle course. Like go do something kind of crazy because the levity that it brings. brings and the laughter and the fun and that shared unique experience does bring a connection to you. So the one thing I would say, though, is that we can get caught up in that and think, okay, that means I need to go on an amazing vacation with all my friends and we got to go just blow it out and it's going to be great. Let's go, you know, it's at the Caribbean and all

this stuff. And you can buy into that, even if you don't have the money and even if it's on the budget and you end up overspending and stressing yourself out even more on that experience if you're not wise about it. So the experience doesn't have to be lavish, I don't think. I think it could be actually really inexpensive, but the point there is, though, that you're doing life with people. And Dr. Jonathan Tholone talks about loneliness so much

and how so much of people's, like, relationship status with other friends, you know, within friendships has gone down over the years. And so connecting with people, I think, is the key here. And through experiences, I get that. So I understand. I just don't want us to be crazy with it. So I agree, Joshua.

I agree, or Harvard Business School. All right, the next one, he said, again, according to Harvard Business Study, is that people who spent money on others reported greater happiness. And in contrast, the amount of money people spent on themselves was unrelated to happiness.

So Joshua calls this pro-social spending, and what I basically call it is giving, like you're giving to others. And I do agree with this. Like, there is something that releases inside of you, when you give, when you give money. And if, again, whether it's to an individual or a organization that you're really passionate about, there is something about a selflessness inside of you that comes out when you choose

to give. And that joy that you get is different than a joy that you have when you go buy like a new pair of jeans or something. I mean, there is something so different. And so the effects of giving, you guys, it's not just in your head. I mean, it truly is a real thing. It is something that triggers a release of dopamine in your brain that makes you feel happy. I mean, there is all of this, you know, that's going on inside of you.

That is really, really true. And so, again, you can do small things. Again, whether it's, you know, paying for someone's meal or someone's coffee. But you can start to practice with these little acts of giving and start associating that joy and that happiness with what it is. It's that action. And the Cleveland Clinic notes that these health benefits may actually lower blood pressure, increased self-esteem, lower stress levels, and even a longer life.

So there you go, you guys. You get back your time and your life by giving, and I love that. It's so true. All right, so the last way to buy happiness that Joshua Becker talks about is buying back your time. So what does this mean? Well, think about things like hiring someone to mow your grass or maybe deliver your groceries or, you know, maybe you move closer to work so your commute time is less.

And the Harvard Business School found that happiness is not just purchasing positive experiences like travel, but also purchasing the removal of negative experiences. So getting your time back actually can bring a level of happiness to you. And I think that's true, too. I mean, I really am about this. So much of people spending these days and the way they want to create their life is around convenience. And this idea that I want my time back. Like, time is such a precious commodity that you don't get back.

So I know for me, I mean, this is huge. when you are able to have more time in your life, it is nice to spend money to get that back. So whether, again, it's me not having to go to Costco every Saturday and I get delivered the house or when we moved to our new house, Winston's sold his lawnmower. And so instead of every Sunday, he would go out mowed the lawn

and when we moved, we hired someone to do that. And I know, again, this takes money in your budget and you have to have margin to be able to do these things. But for some people, and again, according to the study, that they would cut other things in their life in order to bring in these kind of, I guess, services, you could say, so that they don't have to do those things so that they have their time back to them.

So, again, buying back time, I would think does bring a level of happiness. I don't think that's a bad thing at all. So that's such a, okay, so all of it, that whole study is so fascinating because I think we equate so often that your money cannot buy happiness. But as we just saw, there's three examples of it. And I think that there can be some skewere. versions of these things. I don't think it is going to automatically bring you happiness.

I think if you do all these things, you know, you could have other things in your life that are really crappy. You're like, oh yeah, I have bad habits here, here and here, and I'm not happy, right? So we have to be careful to pigeonhole it, but I can see how it brings a greater sense of joy in life when you experience things with others, when you're giving back and when you get your time back. Like overall, I totally get that. Absolutely. So it's kind of good news, you know, when you read it, I think all those things doesn't have to, doesn't mean that you have to have a huge income or a huge budget or lots of money to be able to do them.

I think you can experience levels of all of these, maybe in smaller ways versus bigger ways, to experience that level of happiness. So very fascinating. Thanks Harvard Business School for just doing some research. Okay, so I want you to send this to a friend who loves learning about how to create a happy in a whole life. Maybe you can give them some other ideas.

Today, so excited because one of my great friends and fellow Ramsey personality, Dr. John Deloney, is here with me. What's up? Welcome back. Good to see you. You like this? You like the truth of a pre show. I love sitting on the couch. That's it.

I know. Well, glad you're back. Thanks. Thanks, thanks. So, John is a mental health, wellness, and relationship expert and host of the Dr. John Deloney Show and bestselling author. And so today, I want to dive in and talk through kind of five big areas of money. and five areas that we talk a lot on this show about.

But I want to talk about not just how it affects you with your money and your finances specifically, but also your mental health and also your relationships because money plays and is woven into every part of our lives. And we feel that. And so, yeah, I kind of just want to dig in. Let's jump, let's do it. Ready?

Debt. Debt. We're going in first. Debt. So from what I've experienced in talking with people over the years is that there is a truth that when you owe someone, money. You have, you don't have as many options in life. You don't have as much freedom. So we talk about becoming debt free. There is a freedom to that, that yes, your paycheck is freed up to be able to give and invest and spend. And it's your money coming to you that you

actually get to keep. But there's also this freedom, you know, emotionally, spiritually, that just kind of releases when you don't owe someone money. So that's kind of like the top layer that we talk about here. But I would love for you to just to like go a layer or two under that and really dissect it because debt really can affect you on so many levels. Yeah, I think that everything you just said is absolutely 100% true. I think underneath it there's a machine that's running that's important for us to understand what's happening. And actually I'm working with a couple of researchers who are running these experiments now. And so I'm going to have some true hard scientific data back up what I know to be true.

And so here's what's going on in our heads. Our minds are broken up into a couple of distinct pieces, one that is always scanning the environment for threats. things that your brain knows means you're not safe, right? That you are under threat. Your housing may go away, your relationships may go away, right? Big important things.

And there's another part of our brain that is our frontal lobe that is, and this is so nerdy I know. No, I love it, yeah. But it is looking for what's rational thinking, right? Is this a good deal? Is this a good idea for my future self, right? Yep.

When you go sign for a car note and it's zero percent down for 60, 60 months or whatever, your frontal lobe knows, hey, that's a good deal, right? I get to keep my money at home and I'll pay for this later. It's a problem for future, John. That feels good.

The threat detection part of our brain starts spinning up because it knows you don't get to decide what you do tomorrow. Toyota Motor Company does. Honda decides what you do tomorrow. The bank decides. Bank now is control of your life

and your body knows you're not safe. And as VanderKulke says, the body keeps the score. So I can convince myself to go ahead and act because this is a quote unquote good deal or it makes sense right now, or we've got to get a bigger car because whatever. Right, we're having another baby.

Whatever. Yeah, this lump of human needs a whole other row in the back of the SUV, right? We can convince ourselves of all these things, but our bodies know, oh, we're not safe anymore. Because if you miss one payment, miss the job, you have no more transportation. It goes away.

And I think that's the interesting thing about debt specifically because mathematically, you know, you can talk to yourself. Yes, you can talk yourself into it. So how often does that switch between the feeling part of your brain and the rational part? Well, here's what's wild. When the threat detection system sets the alarm, it actually unhooks the thinking part. Oh, yeah. Right?

So it's spinning all the time 24-7. So we talk to people a lot, you and I, who owe six figures of debt. They got student loans, they got credit cards, and they'll talk about how they feel like they go to bed at night, and they wake up and they're still exhausted. Yeah. Your body won't let you fully go to stuff. sleep because it's waiting to not die, right? Like we talk to couples who are married and they're together, but they're not connected.

Your body doesn't have time for sex or intimacy because it's trying to not die, right? Interesting, yeah. And then we talk to people who've paid off all their debts and they talk about this. It just feels something's different. I'd say body who goes, okay, now we can relax, right? Now we can actually lean into intimacy. We can lean into, oh, you want to sleep? Let's sleep, right?

it's a totally different, it's a totally different physiology because your body is not under duress anymore. Which is so huge because, again, people that advocate for debt and they do all the math and they show you all the formulas and all that, they don't put this kind of stuff into account. Like you can't put a number and a formula and a great interest rate on that part of your brain, right? I'm like, like there is something in there.

And so I think that's a really important part, you guys, to really focus on is that getting out of debt, that journey for you, while you're sacrificing, and we talk about that a lot on the show, the end result is almost even greater than probably what you could even expect because there's something that you may not even realize is going on in your body. So that's amazing. Okay, so that was debt. Let's talk about budgeting.

Okay. Because budgeting, one reason I love it is I feel like it's healthy or unhealthy, I can control a level of my life there, right? Like you're like, okay, my money's coming in and I can set a plan. You know, once in we get to decide what we want to do this month with that money. Like there's so many things in life that we can't control these days. And I feel like even the last like two, three years, we've all experienced that on a great level.

So for me, yes, I love knowing that, you know, I'm being wise with my money. Like, all of that feels good. I'm spending money I have, so I feel permission to spend. It's all the stuff I talk about. But there's this level of control for me that I think deep down it just, like it just feels good to be able to say I have power over something.

Oh, can I tell you what I think it really is? It's not that. Control issues? No, it's not, I don't know that it's control. What? I think control feels good. Right, and we're going to control what we can control. We're going to create a plan.

But if you go look at every religious tradition throughout history, part of it is there's always confession, there's always giving, and there's always this other word, and we hate it, but it's submission. It's taken a knee. It's this idea of here is something I'm giving myself over to. And so when you create a budget, the control part is up front. I'm gonna wrap my arms and I'm gonna,

I'm going to, the money and what we're going to spend. And then there is a submission to, this is what we agreed on. This is who we're going to be. This is who, this is the roadmap towards the family we want to become. And your body, again, goes, submission, right? And we hate that word. I, Rachel, I hate that word. Sure.

But there's something. It's thrown around a lot. It is. It is. And it's abused. It's super abused. But there's something about saying, hey, we're going to save up to buy this thing. And that means over the next seven months,

we're going to sacrifice things that we want in the moment for this thing that we want. Are you in? I'm in. I'm going to submit to this plan. And there's just some peace that comes along with that. Because we know where we're headed. And then how much of that practice, right, with our money, translates into, you know, maybe your marriage and your parenting,

this level of like, I'm going to give myself over. I'm going to submit myself to this specific plan. Right. But does that feed into other relational parts of your life too? Yeah. It's a proxy for the way we live our lives, right? So we have, so we just finished with Christmas, right? And we're into the new year.

Let's say, let's go back to before Christmas, we decide we're going to visit my family. Visiting my family comes with some high highs and some low lows. It just is, right? Everyone has those things. When I decide I'm going to visit my family, I am submitting to all of it. And so me fighting it and getting worked up and anxious and getting angry,

but what a waste of time. I said I'm doing this, and I learned that through doing a budget every month. I could, through the budget process, get so mad and angry every month, why? I decided. And I'm doing it because of a future goal. Same with visiting family,

same with taking a new job, same with moving to a new town, same with couples coming to some hard disagreements in their marriage. I'm going to submit to the process. I said I'm in, you said you're in, now let's just figure this thing out. That's so good. And I love that.

Yes, so it starts over where I would see, like, the control feels good because there's something's out of control, so I can control that. but ultimately what I'm saying is I'm dying to myself in a sense to this plan and I'm going to trust it and follow it because in turn, it actually is the thing that's going to help me learn. That's right.

There's control until you put the pin down. And then it's about submission. Love it. Okay, so that was budgeting. Let's dive into saving. Okay. So saving gives a level of security, I think, for a lot of people. So not only do you have the actual tangible means to go and do stuff

or have an emergency fund or you're saving for retirement out for the future, you're delaying pleasure in the moment, look at the future, all of that. It is. It's so good. But man, there's a security piece to that. And for women, the top financial fear is the lack of security when it comes to money. If something happens, am I going to be okay, right? That fear starts to creep in. So I see on a financial side that security blanket, we talk about the safety net. That's really what it is. But talk about, like, again, your body, your mental health, your relationships. What does it do when you have savings? It's very similar to owing money, right? When your body knows one wrong thing, one flat tire, one loss of a bonus, right? Now we live in a world where people

live, they budget in their bonuses, right? And when you don't get that bonus, it has a reverse domino in all of your life, right? Your body knows we're not okay, right? If you have an emergency fund and you don't get the bonus, it's annoying. It's something you complain about to your friends, right? Or you're like, oh my gosh, it's not catastrophic. It's not catastrophic. Right. And so, again, there's something physiological about the piece. I know I've done what I can and come what may, right? And I always get that like, what about if the monetary system collapsed?

You know what? I'll deal with that one. Totally. I don't have a plan for that because, yes, the moon could take off into orbit, right? Or whatever. If there really is a moon, right, Rachel? We don't know. We supposedly landed on it, but I don't know.

Right. I don't know. But I'm going to control it I can control, and then I'm going to have peace. Yes, that's so great. Okay, spending, one of my favorite parts of money. It's so fun. So I feel like, yes, we're similar in this way that it's exciting, right? And there's reasons why we spend.

There's great fun reasons that you do within a wise system of not going into debt, and it's in the budget, and you have permission to do it, and you get to go do it, and great. But there's also the unhealthy side of this. spending, which we all experience, right? So whether you're doing it to impress someone else, whether you're doing it kind of for like a power grab, that, oh, this is going to make me feel great. Hey, let's talk through this,

because I think you and I have very similar issues, but they come from different places. Why do you spend? Like, what does spending get you? I still have this thought, oh, if I just had those earrings, like, everything will be okay. Then you feel a certain way? I feel, yeah, I'll be good.

I'll be good if I just have that. And I still buy into that, even though as I'm doing it, I'm like, that's not true. I was just thinking, God, why should you wear those earrings for the show? Terrible. Terrible. Terrible ideas. And so I spend, I grew up with, we didn't have a lot, right? And especially no name brand stuff.

And we always had hammy downs. And so for me, spending is this weird way to try to get a steam back. Like, look at the brands I'm wearing, right? our friend Joshua Field Milburns was talking about how he literally takes the brands off his shirts because I don't want to be advertisement for somebody else. And I thought, I would never do that. And then I asked myself why. And I thought, oh, because I derive status from that brand, right?

And then I thought, that's shameful, right? So that's why I spend and spend and spend and spend and spend because I keep trying to get affirmation that I'm enough. Yes, yeah, totally. So there's all that, right? There's all these different reasons. I probably list 10 different reasons on why people spend, again, not in a healthy sense. So what does it do to us when we believe these lies, that it's going to give me this level of status that I feel like I want and that status will fulfill something in me or if I could just have those earrings, I'll be great.

I don't need any more. Just as one pair. Like that kind of floating and living, spending in those ways, that again is so hard, you guys, because I'm like, even if you have the money and even if it's in the budget, there's still some great questions to ask yourself about your motivation. And so when we spend and not a great motivation, what does that do to us? I mean, we could go down a whole nerdy dopamine rabbit hole, which we don't need to do. But I think ultimately, it continues to push the finish line for I'm enough or I have worth. And it gets further or further away from you. And once you get down a

certain path, it's really hard to change direction. It's hard to, it becomes an addiction, right? And whether it's addiction and purchasing addiction and alcohol addiction and whatever, any number of things, you're chasing this continual feeling, this continual, oh, then it will be and then it will be. And so I think there's something about unhooking from the Matrix and just saying, I'm not playing that game anymore. Yes, that's right. I'm not going to seek, I'm not trying to get happiness. That's not the goal, right? The goal is, I want to be a present dad. The goal is I want to be a great husband. The goal is I want to be awesome at my job and show up, right?

And so I'm going to pursue those things. I'm not going to pursue stuff. Yep, yep. And that's what's so tricky about all this is I'm like, or what's frustrating, not tricky, that, you know, the truth is, I'm like, yeah, and we can know what is right and wrong, but having the maturity in the moment before the purchase to be able to say, you know what, I'm going to wait.

That's why we talk about the 24-hour rule here, because you allow whether it is, again, the adrenaline or the dopamine or that feeling of like, I know. it's not going to, but in the moment, my feelings, my emotions feel different. Unplugging from that matrix for a day is amazing what it does. It's all about the gap, right? Between stimulus and response, right? Between that feeling of, I need to. And just wait. And just wait, right? And I think this is an important marker that I've heard repeatedly since I've started co-hosting the Ramsey show, and I've experienced

in my own life. When I think back to the days when I didn't have anything and I was pacing my house, My wife and I had six figures of debt. I was pacing my house. I didn't know which bill we were going to pay or not pay. I remember impulse buying to try to make that hurt go away. Now I'm in a different financial position. And I think you and I were talking about off air. I was on a hunting trip.

I have the top of the line. I have the Cadillac gear. And the guy who I showed up as an old friend of mine, he had the Bentley gear. And I got home. I have no need for any more camping. Amofalage clothes, people, none. And I had it all in the little shopping cart.

Like, oh, I need to get the Bentley. And it wasn't a matter of, I couldn't afford it. It was a matter of why would you do this? Because I could afford it. I have a budget line for stupid purchases. My wife put, she literally put it for whatever stupid thing John's going to buy. But I had to ask myself, why am I buying this? Right?

Because I don't need it. I don't really even want it. Oh, it's a validation thing, right? And so I took a break, I took 24 hours, and I ended up not buying it. Yeah. And again, it's that stuff, you guys. It's that layer of this, that financially you can have the box and it's perfect. But when you plug a human and when you plug us in, it can kind of change that, yes, change that formula.

So I think it's good. I take one quick hack. Yeah. I hate hacks. But the 24-hour rule doesn't work well for me. So I've had to put another layer in. Here's my layer online. Nope, it's not about time.

I click out of... the window on my computer. Instead of just minimizing it. Because what I would do is I would shop for something online. I would drag it into the shopping cart, on the digital shopping cart, and then I'd wait 24 hours. I wouldn't make it.

I'd get up the next morning and I'd been thinking about it. So when I have to actually log back in, get all back in everything, that causes enough of a barrier for me to slow me down. That's so good. I love that. Okay, last finale's giving. So, you know, there's been studies down, we've talked about it on this show too, what giving does.

And we talk about a lot of the selflessness that comes into play, right? When you start to give your money, it's a sacrificial statement that you're doing, and you're saying, okay, I'm going to worry less and think about me less as I'm giving. So that selfish, selfless perspective starts to move. And you start to move to being more self-less and how that plays into every area of your life. So what have you seen, though? When people start giving, what does that do? again, in your body, what does that do?

Relationally, how does it cause? Giving is the antidote to anxiety. Plain it simple. It takes your eyes and really, it's not the cure for depression, but it's the path out, right? Depression, anxiety, all those alarm systems force us to look inside ourselves

and begin to live inwardly. And that's healthy to see what's the threat, what's going on. Sure, sure. But you can't live like that, right? And it's really easy to live like that. And then you're scrolling and it's telling you how awful everything is. And it's all coming down and oh my gosh, look what she's wearing.

Look what he got. It just causes the spiral to spin tighter. And you just look further and further into your own belly button. Yeah. Giving is a physical act that makes you pull your eyes up. Yeah, absolutely. And it's that simple, right? And I remember when I didn't have a lot,

$10 to the Waffle House waiter or waitress is a shape shifter moment, right? being able to give a couple hundred bucks, right? That becomes a powerful, powerful moment. And so for me in my life now, going back to purchases, I like to balance them out. If I'm going to spend this much money on a guitar, I'm going to give this much money recklessly, right? And it is a way to keep me from,

what about me, what about it? It just is a much freer, open-handed way to live. Yes, and brings off, I mean, that's the stuff that, I mean, honestly, it's the joy we talk about that you can't get from the stuff, right? We're not mad at stuff and all of that, but there is something that releases inside of you and in your spirit and in your soul that is so different when you give.

That's so great. Okay, so we've been talking again a lot about, you know, mental wellness, relationships, what's going on. It's deeper than just money, but our money affects all of that. So, John, I would love to know from you, what are a couple of things people can do today, just overall to become mentally healthier. I mean, we've said,

control what you can control, which is your budget, control what you can control, which is either how much you're spending or how much is coming in the door. And I don't say that to be trite. You can't control what your boss is paying. Your boss is paying you what your boss is paying you. But if you've got to go to second or third or fourth job for a particular season, that's the season, right? So there's something empowering about saying, today's the day I act, right? The second thing is not owning anybody any money.

There's just something so profoundly physiologically powerful about not owning anybody any money. And then the third thing is just give recklessly. And I know we don't, like, you and I were like everything so like be intentional, be intentional. Just give unintentionally. Give like a madhouse, right? And have whatever your line item is for giving, put more in it, especially in the new year. One of the things about tithing, I think we've kind of messed it up a little bit because we've made that like, what's the percentage? instead of a way of being.

Yes, yes. So start thinking less in percentages and more in identity. This is who I am. Just who I am. I'm a giver. Yep, I love that. That's so great.

Well, you guys, I hope you enjoyed this because, again, our money, yes, affects the numbers in our life. It affects our investments and our bank account and all that, absolutely. But there's deeper things going on.

I mean, you can kind of get control over that or see the bigger picture. I think it allows for more motivation. Those of you that are getting out of debt or you're funding your emergency fund and there's been a season of sacrifice for you. Like, I hope this is just encouragement that what you're doing,

you're going down a path that not only financially is going to help you and free you, but also in so many other areas of your life, like your mental health and your relationship. So, John, thank you so much. Thanks for having. For coming on. Where can everyone find you?

At ramesysolutions.com or at John Deloney. On the internet. On the internet, everywhere. And the Dr. John Deloney show for podcasts are, so make sure to check that out because it's so great. So today we're going to talk about people

who make $200,000 a year and why a lot of them are still broke. Yep. I know it's kind of wild when you think, okay, not just six figures, but like $200,000 and they're still struggling? Well, as we look at the research, we're going to talk through some kind of the underlying causes of this.

But it is true, and it's something that we see all the time. Even when I host the Ramsey show, and we get callers in, like, you see people's situations. and so for me, honestly, it did not come as a shock. So let's first just establish the median household income in the United States is around $70,000 a year. So we're going to use the median instead of the average because the average can be hugely swayed by outliers

like people making like $10, $20 million a year. So the median is a little bit more of an accurate representation of the general public. Now, with that number of minds, remember that, again, the median is $70,000 a year. Some people are making less. and people are making more, but 78% of all of Americans are living paycheck to paycheck. So if you were to bump up that income to six figures instead of $70,000, you know,

you may think, well, that's great because they're going to have so much margin and they'll have more money to do what they want. But we're finding that research shows roughly 45% of those making more than $100,000 say that they are still living paycheck to paycheck. and 47% of those making between $150,000 and $200,000 a year are living paycheck to paycheck. And for those making over $200,000 a year, 30% of them are living paycheck to paycheck. And, you know, I'm not like overly shocked by it. I understand, like, when you read numbers like that, you're thinking, how in the heck

does, how, how? And I'm like, I mean, I guess I've just been in this job long enough that I hear all different income levels and all different debt levels and people the way they live their lives. And it's not always, you know, the income's fault, right? It's usually the person that's handling it. And so you could have someone making $70,000 a year and they're being really wise and smart with their money. And then you have someone that is making $200,000 a year and they actually owe money and they're in debt and they're living this lifestyle. Right? So like, it all really depends on the person. Now, one financial expert, the CEO of Met,

Max, my interest, Gary Zimmerman claims that $100,000 isn't what it used to be. He said with a combination of taxes and inflation, it leaves little purchasing power. And the reason people making over $200,000 a year, that's why they're struggling. So yes, do taxes and inflation and all of that play a mathematical role in income? Yes, absolutely. Also, where you live plays a role. You know, what kind of level of lifestyle you have plays a role. a role if you have two car payments versus no car payments. It plays a role if you have student

loan debt or if you don't. It plays a role if you live in a nicer part of town with higher property taxes than not. I mean, all of these choices play in. And so I don't want you to hear these numbers and think, oh my gosh, there's no hope. Even if I make $200,000 a year, I'll still be living paycheck to paycheck. That's not what that means. I really don't believe that because I know people that make less that are actually worth more than people that make more, but they're choosing a different way to use their income. And, you know, there's a buzzword going around a lot lately called lifestyle creep. And it's a real thing that, you know, when you start to live at a certain level, you get used to a certain standard of living. And then, especially if you're okay with living

a little bit beyond your means, you kind of up that. And then if you make a little bit more money, you just kind of keep up in that lifestyle. And you don't notice it, but by degrees, you continue to up your lifestyle. And again, what you put in your life and these things, that you think are necessities, and these wants, you start to pair with, no, these are needs, these are needs, when that's not the case at all. So again, I'm not saying luxuries are bad or anything like that. I think it's fine, but we want to do it in relation to our income and to where we are financially. Because again, I'm going to beat this drum over and over again. You could have someone making $200,000 a year that actually has a lesser net worth than someone that's making $70,000 a year

who's choosing to live debt-free and live below their means, right? So, like, you could have two different paths. So I just want to really push on you guys to say, yes, if you're being wise with your money and you have great money habits and then you get a raise at work, that's a good thing because you're going to be able to take that extra income and do something great with it.

But if you have bad money habits and you continue to live beyond your means and keep spending and keep spending, keep going deeper in debt, and you get a little bit of a raise or an income increase, that's just going to magnify that problem. So my whole consensus is this. It has more to do with you the person than your income.

Can your income level help you do great things? Absolutely. But it also can help you do really damaging things. So that's why it's really important to really fight for what you're doing with your money and your money habits. So be looking at your budgeting, be looking at your saving, be looking at getting out of debt, be looking to create these great,

great money habits and watch lifestyle creep because it's a real thing. We're all guilty of it. Regardless of what you make, it can be an issue for all of us. So budgeting really helps with this because you're able to see visually where your money's going and you can be very, very diligent about stretching your dollar there. Be honest with yourself and where you are. It's just saying, oh my gosh, are we living beyond our means? Are we making $70,000, but we're acting like we're making $85,000? Like, you know, be honest about the math and what's going on. Also ask yourself why. Why are you spending the way you spend? Why are you saving the way you save? Really digging into your motivations can also help in this. And again, I just want to give you guys

encouragement that if you are living within your means, you're doing a great job. You really are. I know it feels really hard and it sucks sometimes because you have to say no and you have boundaries in place. But all of that is to set you up to win and ultimately have peace where you're the one that has control over your money. And so for those of you that are not living, within your means, regardless of your income, maybe because of lifestyle creep or other reasons, I would really encourage you to fight for that, to do a budget, to be intentional with your money, and get within the place that you are living below your means, because having even a level of margin, even a tiny bit of margin, is going to give you a level of control versus continuing

to spend more than you make. So, is it defeating to hear that two percentage of people that make $200,000 a year are still living paycheck to paycheck? Sure, that's defeat. but I would also say they have a great opportunity to change their money habits and maybe make other decisions with their life to be able to handle that money really well and actually use that money to propel themselves into building wealth and doing great things. And then those of you that are not making $200,000 a year, I would say the same thing about you. So it's a interesting conversation to have and I think it's fascinating research that's coming out in stats and data, but all of this is really important to remember and to great.

around yourself, that you have the ability to create really, really great money habits, regardless of your income. But the ideal situation is that as you create great habits and you set yourself up really well financially, then when you get an increase at work or you do take on an extra job and make more income, all of that money is being used for good to further your financial plan versus the banks while being deeply intent. So I hope that this was encouragement to you. I don't want this to be defeating at all.

And if you found this interesting, make sure to share this with a friend who also might be interested in lifestyle creep and the idea that we have the power to control our money. All right, you guys, $200,000 and still living paycheck to paycheck. Again, I hope you're not defeated by that. I hope you're encouraged that you can actually make a change with your money and that will affect how you use your income, which is awesome.

All right, I'm going to thank Dr. John Deloney for being on the show and I want to thank you guys so much for listening. If you have not subscribed to the podcast, make sure to hit that follow button. And if the spirit leads, you can leave a review. And as always, make sure to take control of your money and create a life you love.