PriyaPatel
TLDR:
High earners, including some making over $200,000 annually, are living paycheck to paycheck due to various financial habits and factors. Despite potentially higher incomes, many high earners struggle to save consistently and budget effectively, leading to financial stress.
Article Summary:
A recent report by PYMNTS Intelligence reveals that financial management habits are causing 30% of affluent consumers to live paycheck to paycheck. The rising cost of goods and services in the U.S. has led to 62% of consumers living this way, with more than one-third of those earning over $200,000 annually also facing financial strain.
Despite potentially higher incomes, factors such as nonessential spending, paying expenses for others, and drawing on savings due to unexpected expenses contribute to high earners’ financial struggles. While high earners are more likely to have kept up with inflation in terms of wages, they are also engaging in higher levels of discretionary spending.
Additional key findings from the report include:
- Sizable portions of high earners, including millennials and urban consumers, are living paycheck to paycheck.
- High earners’ budgets are as inflexible as low earners, with essential spending representing a smaller fraction of their incomes.
- High-income, paycheck-to-paycheck consumers are inconsistent savers, with close to 1 in 5 not saving every month.
- High-income earners are the likeliest to say they lack good saving habits, potentially due to confidence in job prospects.
Overall, the report underscores the need for high-income earners to find ways to budget for essential and nonessential items effectively to better live within their means and alleviate financial stress.
