Midwest Couple Earns $200k but Struggles with Debt Due to ‘Lifestyle Creep’
A Midwest couple earning a combined $200,000 a year finds themselves drowning in debt despite their seemingly high income. The couple, who reside in Des Moines, Iowa, have fallen victim to what financial advisor Dave Ramsey calls ‘lifestyle creep’ – a situation where expenses increase in line with or even faster than income.
Despite the husband and wife bringing in a base salary of $175,000 and an additional $20,000 from rental properties, they are living paycheck-to-paycheck with a staggering $785,000 worth of debt. The couple’s financial woes include a $450,000 mortgage debt on their main home, $192,000 on an investment property, as well as personal loans, car loans, student loans, and credit card debt.
Ramsey, upon analyzing their situation, bluntly declared, “You guys are seriously broke! You’ll are freaking starving to death making $200,000 and spending like you’re in Congress.” He emphasized the need for the couple to quickly control their spending, sell the rental property, and overcome any psychological barriers to financial freedom.
The couple’s story is not uncommon among high-income earners, with nearly half of all six-figure earners living paycheck-to-paycheck. Ramsey stresses the importance of not succumbing to societal pressures to maintain appearances and impress others, stating that financial well-being improves when one stops caring about others’ opinions.
As the couple contemplates selling their rental property to alleviate their debt, Ramsey and his co-host Jade Warshaw emphasize that financial health can significantly improve when individuals prioritize financial freedom over external validation. Ramsey believes that ignoring others’ opinions is a ‘superpower’ that can lead to a more secure financial future.
