He earns a substantial income. Yet, he’s struggling financially.

I’ll tell you his numbers.

• Let’s start with five years ago. Back then, it was about $350,000 a year in personal income.
• Four years ago, it was up to about $400,000.
• Three years ago, it was about $450,000.
• Two years ago, it was about $500,000.
• Last year, it was $550,000.
• This year, he’s on track to do at least $550,000 if not more.

It’s going up each year. He’s earning a good income for his geographic area, practice area, and his years of experience.

Unfortunately, it’s not enough.

You see, back when he was earning $350,000, he was running a deficit. That year, he wrote a big check to the government at tax time. He had to borrow to cover it.

It’s the same deal in each of the past five years. The deficit runs, more or less, the same each year, and his overall debt is growing.

He’s spending more than he’s making.

Is Marketing the Solution?

He came to me for help with his practice. He wants to increase revenue so he can pay off the loans and get out from under the crushing pressure he’s feeling. He’s unhappy with the emotional burden of owing the money. He wants some relief. The pressure feels intense.

His plan is “better marketing, higher prices, more clients.”

“I can’t help you,” I told him. “There’s nothing I can do.”

He argued with me. He said we could work together to increase his revenue with better marketing. We could improve his website and help him grow his network. He’s good at growing his business. He’s got a five-year track record of growth. I’m sure we can grow his revenue.

“It won’t work,” I explained. “Why?” he nearly yelled at me. I felt like I had been punched with a word.

I calmly explained to him what I’m going to explain to you below. It’s something he knew. It’s something you already know. Sometimes, however, it’s useful to be reminded. I’ve certainly needed reminding in my life.

The Simple Math of Spending

Here’s the deal:

It doesn’t matter how much you make if your outgoing money exceeds your incoming money. You can increase income all day, but it won’t help if you also increase your expenses.

Makes sense, right?

My guy consistently spends more than he makes. The debt keeps increasing. That’s happening even as he increases his income beyond what anyone “needs.”

I’m sure he has good reasons. After all, he has nearly doubled his income in a very short time span. Shouldn’t he benefit? Shouldn’t he be able to reward himself? Isn’t that something he can afford? Maybe that’s what he’s thinking.

Or maybe he just spends more because the account shows there’s more money to spend. Or maybe it’s his family spending beyond what he can afford. Maybe he can’t find a way to say “Stop!”

It doesn’t matter why it’s happening. What matters is that it’s happening.

How to Solve the Spending Problem

What’s clear is that, unless something big changes, bringing in more money won’t solve his problem. The problem is the output, not the input. He needs to fix the output problem. He’s got to stop the spending.

I pushed him on the spending. He has a good story for every major expense. His ongoing expenses “can’t” be reduced. He has his reasons—lots of them.

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Fixing the spending problem requires different solutions for different lawyers.

• Some require education.
• Some require a financial planner to help and impose discipline.
• Some require counseling between spouses.
• Some require counseling for themselves.

The spending problem is usually complicated and involves way more than going overboard once in a while. It’s typically pretty deeply ingrained.

I explained all that to my guy. His response? He wants to increase revenue. That’s where he wants to focus.

We’re going to accomplish his goal. We’re going to drive revenue way up. The clients will come, and they’ll pay their fees. It’s going to be exciting, busy, and lucrative.

And, at the end of the day, he’s still not going to have any money.