- The term “Henry” – short for “high earner, not rich yet” – is typically used for millennials in their 30s who earn over $US100,000, but who still feel broke.
- When lockdown stripped Henrys of some of their favourite splurges, like travelling and entertainment, they finally started to save, two financial experts told Business Insider.
- But they’re facing a big challenge during reopening: not succumbing to their old lifestyle.
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Henrys aren’t feeling as strapped for cash as they used to be.
Short for “high earner, not rich yet,” Henrys are typically millennials in their early 30s who earn over $US100,000 and live in urban areas. But it’s their lifestyles that really define the Henrys: They live above their means and struggle to balance their spending habits with saving for the future, leaving them feeling financially strapped.
But lockdown measures stripped them of their typical spending pleasures – like staying at luxury hotels, taking international vacations, or signing up for ClassPass (which can cost as much as $US180 per month) – and they, like many Americans, are no longer spending the way they used to.
This left Henrys seeing a lot of excess cash build up in their savings accounts, Priya Malani, a founding partner of Henry financial-planning firm Stash Wealth, told Business Insider.
Likewise, Gideon Drucker, a certified financial planner at Drucker Wealth and author of the book “How to Avoid H.E.N.R.Y. Syndrome,” told Business Insider that his clients have recently been tucking away as much as $US3,000 a month. “They’re not going out travelling or grabbing 10 beers on a Friday night,” he said.
Drucker said the economic repercussions have forced Henrys to take a step back. Seeing the prospect of worst-case situations like a job loss or salary cut, he added, has motivated them to prepare a better savings plan in the event of another unexpected scenario.
“I think this was a wake-up call,” Drucker said. “Not that they were sleeping, but for a lot of Henrys, the market has been up pretty much relentlessly over the past decade.”
Henrys face a challenge during reopening
Now that states and cities are in the process of reopening,Henrys face a new challenge: Keeping up the good savings habits they acquired during lockdown.
Malani warns against succumbing to pre-pandemic lifestyle habits. She advises stashing any excess cash in a high-yield savings account to build (or rebuild) your emergency fund. “If you lose your job in the coming months, you have a cushion to soften the blow,” she said.
Drucker stressed not waiting until you get back on track to do start preparing financially. Being proactive will help you stay ahead of the game, he said, in case the world shifts again in three to six months. But you need to first figure out what your financial goals are when the pandemic ends, he added.
While maintaining savings goals will be the biggest challenge for Henrys, according to Drucker, it’s important to stay realistic without losing sight of your plan.
“Its unrealistic to assume that you’ll always save this money,” Drucker said. “The priority isn’t saving at the expense of having fun, it’s about striking a a balance.”