"I've seen this exact scenario play out three times in the past year alone. During my interviews with startup founders and corporate executives, I kept stumbling onto the same uncomfortable truth. The ones drowning in debt weren't the middle managers making $60K. They were the high earners pulling in six figures who somehow managed to spend every penny and then some."
"The ones drowning in debt weren't the middle managers making $60K. They were the high earners pulling in six figures who somehow managed to spend every penny and then some. One founder I dated briefly epitomized this perfectly. He'd celebrate closing a $50K deal by buying a $5K watch, then stress about credit card bills two weeks later. His income wasn't the problem. His relationship with money was."
"The psychology behind this is fascinating and terrifying. Researchers call it hedonic adaptation, where we quickly get used to positive changes in our lives. That salary bump that felt life-changing in month one becomes your new normal by month three. And normal doesn't feel special anymore, so you need more to get that same high. What really gets me is how subtle this process is."
High salaries can mask fragile finances when spending habits escalate with income. Professionals frequently increase housing, transportation, dining, and wardrobe expenses after raises, eroding extra earnings. Hedonic adaptation makes salary increases feel normal quickly, driving a need for ever-greater purchases to regain satisfaction. Small, rationalized purchases accumulate into unsustainable lifestyles that convert six-figure pay into paycheck-to-paycheck living. Visible cases include founders and executives who celebrate deals with luxury purchases and later struggle with credit card debt. The core problem is behavior and relationship with money, not income level. Subtle, repeated decisions create debt despite high earnings.
Read at Silicon Canals
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