Jun 9, 2025
At the height of his career, Cam Newton, former NFL MVP and Carolina Panthers quarterback, says he was earning roughly $20 million a year. However, in a recent video on his YouTube channel, Newton confessed that he was making online content “to keep the lights on.”
Newton’s candid admission pulls back the curtain on a common struggle retired athletes face: managing money once the big paychecks stop.
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He points to his own situation as “the No. 1 reason” why so many wealthy players end up broke — their failure to scale back spending when their income takes a hit.
Here’s how untamed expenses can gobble up even eight-figure salaries.
Lifestyle creep
Unlike the stereotypical professional athlete, Newton insists he did a better job managing his money while his career was still active.
“I never really had a financial advisor, but I never really was a splurger either — still to this day,” the 36-year-old says.
Although federal and state income taxes reduced his take-home pay to roughly $12 million a year, Newton estimates his annual expenses were between $5 and $6 million — leaving some room for savings and investments.
However, he says many athletes fail to acknowledge the fact that their income is temporary, while their lifestyle is permanent.
Although he’s no longer making eight figures a year, he says his expenses have stayed more or less the same, with private schools, home maintenance, alimony and luxury purchases draining his savings.
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“Those things never leave,” he says. “Your overhead never really changes. Your income changes, but your expenses have to change with it.”
Unfortunately, most Americans expect their expenses to change more than their income. According to the latest Survey of Consumer Expectations from the Federal Reserve Bank of New York, consumers expect their household income to rise just 2.7% in the year ahead, while expenses are expected to rise 5%.
This rapid lifestyle inflation is one of the key reasons why even high-income families are struggling financially. Roughly 36% of consumers who earned $200,000 or more a year were living paycheck to paycheck, according to a PYMNTS survey. Meanwhile, a Bankrate survey found that 13% of American consumers had no emergency savings and 1 in 3 had more credit card debt than emergency savings.
Simply put, most people are vulnerable to a sudden income shock. They’re just a couple missed paychecks away from being broke. The only way to avoid this trap is to keep a tight lid on expenses, according to Newton.
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Limiting expenses
Avoiding lifestyle inflation and keeping expenses as low as possible is the key to financial security, according to Newton.
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“You can live a couple years like a king or, with the right money decisions, you can live the rest of your life like a prince,” he says.
A great way to live within your means is to buy a house that is well within your budget. Nearly 11% of homebuyers exceeded their budget while purchasing their home, according to Clever Real Estate, while 39% exceeded their budget for upfront costs. By avoiding this, you can reduce a major recurring expense for your household.
Another lifestyle adjustment to help live within your means is to switch from credit cards and debt to cash and debit cards. Nearly 31% of American consumers are expected to go into debt to finance their discretionary spending on vacations, dining out and live entertainment this year, according to Bankrate.
If you can’t afford those concert tickets or Euro trip, skip it instead of financing it with debt.
“I've always learned it's better to be able to afford it and not have it, rather than to have it and not afford it,” Newton says.
These adjustments can limit your lifestyle inflation and help keep you better prepared for a sudden income shock.
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Vishesh Raisinghani is a financial journalist covering personal finance, investing and the global economy. He's also the founder of Sharpe Ascension Inc., a content marketing agency focused on investment firms. His work has appeared in Moneywise, Yahoo Finance!, Motley Fool, Seeking Alpha, Mergers & Acquisitions Magazine and Piggybank.
