What's left at the end of your month matters more than the number on your paycheck.
Dad Joke
Why did the scientist install a knocker on his door?
He wanted to win the No-bell prize.
What's left over
When I was a kid, my dad told me that making more money is not going to make you rich. Most people, he said, no matter how much they make, have little left over at the end of the month.
That's why I wanted to pass this along.
You may have seen a headline this week about people who make more than $300,000 a year and still say they live paycheck to paycheck. It comes from a Goldman Sachs survey of about 5,100 adults this summer. By Goldman's own numbers, 36% of the people making over $300,000 said that. So did 42% of the people making under $100,000.
Your first thought might be that you'd be fine on that kind of money. Fair enough.
Here's what the headline leaves out. Nobody checked a bank account. People were asked how they're doing, and more than a third of the biggest earners said there's nothing left. I believe them. When the pay goes up, the house, the cars, the tuition and the card payments tend to go up with it. Then those bills show up every month, good month or not.
And some of it never looks like a bill at all. The Census Bureau counted about 2.6 million parents who gave money to grown kids living on their own in 2024. It came to $26.6 billion. For the parent in the middle, that was $4,725 for the year. And that doesn't count the kids still living at home.
I'm not saying it's the same squeeze. Coming up short on rent is a lot scarier than coming up short on a big mortgage.
But here's the part I want you to have. If more money fixed this, the people at the top of that survey wouldn't be saying what they said. So if you're behind, it isn't proof that you just don't earn enough. And if you earn plenty and still come up empty, you have a lot of company.
Dad was onto something. The number that matters isn't what comes in. It's what's left.
Here's the one thing I'd do. At the end of this month, write down one number. Not what you made. What was left. You don't need a budget for that. Do it again next month and see which way it's going.
Damon Day and I got into more of this in why people making good money still feel broke, including where the money tends to go.
Anyway, I wanted you to hear it from me before one of those headlines made you feel worse about your own paycheck.
When you got your last raise, where did it go? Share it in the comments so we can all learn from it. I read every comment.
Having little left over says nothing about what kind of person you are. People turn that one number around on every size of paycheck, a little at a time. I'll see you tomorrow.
— Steve
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