The median household income in America is about $59,000. This would suggest that making above $59,000 would offer you certain financial comforts and eases that those below the median line aren’t necessarily privy to. It would also suggest that if you make upwards of $100,000 annually, you should have no trouble paying your bills, saving for retirement, paying off debts, and enjoying luxuries of entertainment and vacations.

But you’d be wrong.

A growing number of “middle-upper class” Americans report that their annual salaries of $100,000+ are barely enough to get by. It sounds somewhat shocking since they make almost double the median household income. But for many of these families, their pile of monthly expenses account for at least 100% of their budget, leaving them with no margin and a lot of stress. Many of them have taken on second jobs just to cover their monthly expenses and avoid debt. One couple actually declared bankruptcy. Ultimately, there’s a large number of people who are supposed to be “well-off”, thriving in their finances, and pouring back into the economy, but who are instead trapped in a sort of poverty mindset.

Why It’s Happening

This phenomenon is occurring for a number of reasons. First, the financial obligations of most of these families are huge – they’ve accustomed themselves to a certain standard of living that is outright expensive. Add the burdens of student debt, medical debt, car loans, retirement savings to the already enormous cost of keeping up with the Joneses, and it’s no wonder that a six-figure salary isn’t cutting it.

Second, there’s likely a lack of financial planning. Now, this is somewhat of an assumption, but it’s hard to look at these big salaries and not wonder if a stewardship mindset would have prevented the dire financial outlook. While many of the families are making sacrifices now to make ends meet, they may have already dug a deep hole.

Many who find themselves in this situation have become too focused on things of this world and material possessions instead of Christ. We have to continually renew our minds to keep an eternal perspective. Ecclesiastes 5:10 says, “He who loves money will not be satisfied with money, nor he who loves abundance with its income…”

If we set our focus on the things of the world and pursue worldly success, we will always be disappointed and never satisfied.

How to Avoid It

There are some simple steps you can take to avoid this, but changing your behaviors will only take you so far. Ultimately, you’ll have to examine and change what you believe about money.

The best way to do this is by understanding God’s perspective on managing money and growing into a faithful steward. I recommend that you start with Crown’s online MoneyLife Personal Finance Study. It’s a 7-week course that takes an in-depth look at what the Bible says about your money. You’ll identify where your beliefs and behaviors about money don’t line up, and take practical steps to bring lasting transformation to your finances.

Living beneath your means is not only an important part of being a steward, it’s essential to a bright financial future. By creating financial margin, you grant yourself the opportunity to give, save, and be prepared to cover emergency or surprise expenses. This means that if you make upwards of $100,000 a year, you should live on significantly less than that. It may seem like a large gap, but if you can lower the amount you spend on rent/mortgage, your car, your clothes, entertainment, etc., you’ll be able to increase your giving, savings, and investing. This decreases your stress and anxiety and cultivates a content heart.

Contentment is an essential ingredient in this recipe. Without a content heart, you’ll catch yourself always chasing after what the world says is more, bigger, better.  Contentment is what allows you to live beneath your means and create financial margin, because you are more focused on allowing God to spend you however He wants, not spending your money however you want.

Of course, making a budget is also crucial to avoiding this trap. If you don’t have a budget, download our free Easy Guide to a Budget You Love. If you have a budget but need to cut out some expenses or become more disciplined, read some tips on how to do that here. It’s good for everyone to make a list of their needs, wants, and desires and pray about what makes it into the budget. Even expenses deemed “necessary” can still be slimmed down – maybe you can take on a roommate to help cover the cost of your rent or mortgage, turn off your heating or cooling, carpool to work, and negotiate a lower payment for your insurance.

And if you’re burdened with overwhelming credit card debt, contact Christian Credit Counselors. They can help lower your monthly payments, interest rates, and negotiate on your behalf.

The key to stewardship is to have a faithful heart and disciplined hands. Learn from those already struggling and take steps now to prevent yourself from following in the same patterns.

What questions do you have about money? Comment below or share with us on Facebook!