- In a survey this June, 60% of millennials earning over $US100,000 ($AU136,221) said they live paycheck to paycheck.
- Some of these millennials – known as HENRYs – prefer a comfortable, expensive lifestyle.
- In today’s economy, $US100,000 ($AU136,221) is considered middle class in the US.
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High-earning millennials feel broke.
Sixty percent of millennials raking in over $US100,000 ($AU136,221) a year said they’re living paycheck to paycheck, found a survey this June by PYMNTS and LendingClub, which analyzed economic data and census-balanced surveys of over 28,000 Americans.
It found that about 54% of Americans live paycheck to paycheck. And nearly 40% of high earners – those making more than $US100,000 ($AU136,221) annually – said they live that way.
That means high-earning millennials aren’t the only ones feeling stretched thin, but they feel that way more than their six-figure-making peers. Living on constrained budgets may therefore have less to do with income and more to do with expenses, the report said.
That’s partly because of lifestyle choices. Many of these millennials are likely HENRYs – short for high earner, not rich yet. The acronym was invented in 2003, but it has come to characterize a certain group of 30-something six-figure earners who struggle to balance their spending and savings habits.
HENRYs typically fall victim to lifestyle creep, when one increases one’s standard of living to match a rise in discretionary income. They prefer a comfortable and often expensive lifestyle that leaves them living paycheck to paycheck.
A $US100,000 ($AU136,221) salary isn’t what it was
The economy is also a huge factor behind why six-figure-earning millennials feel broke.
As the report said, “Living paycheck to paycheck sometimes carries connotations of barely scraping by and of poverty. The reality of a paycheck-to-paycheck lifestyle in the United States today is much more complex, and the current economic environment has made it even more complicated.”
It cited the example of a college-educated 35-year-old earning more than $US100,000 ($AU136,221) while juggling a mortgage, student-loan debt, and a child, which could leave them with little savings for big purchases or unexpected emergencies.
The generation is facing an affordability crisis. Income increases simply have not kept up with an exponential increase in living costs, and the pandemic hasn’t helped matters by throwing job loss and pay cuts into the mix.
The cost of education has also more than doubled since the 1970s, leaving many millennials with student debt. Priya Malani, the founder of Stash Wealth, a financial firm that works with HENRYs, previously told Insider that 40% of her clients had student loans. On average, they owed $US80,000 ($AU108,977).
As a byproduct of this increased cost in living, the middle class has been shrinking. Pew Research Center defines the US middle class as people earning two-thirds to twice the median household income – i.e., about $US48,500 ($AU66,067) to $US145,500 ($AU198,202) in 2018, the most recent data available found.
That means a six-figure salary is no longer what it used to be. In today’s economy, $US100,000 ($AU136,221) is considered middle class in the US.
Are you a millennial earning over $US100,000 ($AU136,221) who is living paycheck-to-paycheck? We’d like to hear from you. Email [email protected].