By Claire Moraa
- 48% and 36% of U.S. earners above $100,000 and $200,000 are currently in a financial crisis living from hand to mouth
- While 93% of Americans have faced an emergency situation at least once, only 51% are able to come up with $1,000 for such an eventuality
It’s a paradox how you can put high earner and financial strain in the same sentence but believe it or not, this is the reality of most Americans. In fact, the situation is shocking with 62% of Americans living paycheck to paycheck. 36% of this segment earn above $200,000. And despite being high earners, most of Americans in this group would be unable to cough up $1,000 in an emergency situation. This situation is very telling and proves that a high income does not translate to wealth.
Why This Matters: It now seems that no amount of money is ever enough as even high-earning Americans confess to be on a tight leash in regard to their finances. A six-figure income should ideally give you enough financial muscle and cushion you from financial worry or doom but this isn’t the case. Even with a high income, the high cost of living, student loans, mortgages and credit debts leave little to no room to have a disposable income.
Something shocking that should actually improve the lives of Americans doesn’t seem to have worked in their favor. The inflation level is currently at 3% but was triple at 9.1% in 2022. What we may not have factored in is lifestyle inflation. The more you earn, the more refined your taste becomes. And while 60% of shoppers may have downsized and cut out non-essential spending, retailers have shifted their focus to high earners. This means your expenses are likely to rise in proportion to your income, making it harder to save or have surplus funds at the end of the month. It is these unhealthy financial habits that are making Americans retire with no savings at all.
What’s Next: Anyone can struggle financially regardless of their income level. However, anyone with a sound financial management plan can break the cycle of living paycheck to paycheck. High income doesn’t always guarantee financial security or freedom from financial stress. Empowering individuals with the knowledge and resources to build emergency funds can help improve financial resilience and mitigate the impact of unexpected events.
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