[Business Insider, Getty Images]
- 60% of millennials earning over $100,000 say they’re living paycheck to paycheck in a new survey.
- Some of these millennials — known as HENRYs — prefer a comfortable, expensive lifestyle.
- But $100,000 also doesn’t go that far in today’s economy.
High-earning millennials are feeling broke.
Sixty percent of millennials raking in over $100,000 a year say they’re living paycheck to paycheck, according to a new survey by PYMNTS and lending company LendingClub which analyzed economic data and census-balanced surveys of over 28,000 Americans.
It found that the more than half (54%) Americans are living paycheck to paycheck. And nearly 40% of high-earners — those making more than $100,000 annually — say 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 says.
That’s partly due to lifestyle choices. Many of these millennials are likely HENRYs — short for high earner, not rich yet. The acronym that was invented back in 2003, but 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 their 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 $100,000 salary isn’t what it was
The economy is also a huge factor behind six-figure-earning millennials feel so broke.
As the report reads, “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 $100,000 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 racked 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 — they owe $80,000 on average.
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, earning about $48,500 to $145,500 in 2018, per most recent data available.
That means a six-figure salary is no longer what it used to be. In today’s economy, $100,000 is considered middle class in the US.
By Hillary Hoffower