Even High-Income Americans Are Stressed About Their Finances

By: Anneken Tappe · July 02, 2024 · Reading Time: 2 minutes

Cutting Back

Americans have felt the pressure of rapid cost of living increases in the past few years, and even wealthier workers are getting caught up.

Americans earning six figures are feeling increasingly concerned about their ability to make ends meet, according to a survey from the Federal Reserve Bank of Philadelphia .

That’s why even wealthier Americans are cutting back on discretionary spending, including eating out and entertainment, or opt for cheaper store brands when grocery shopping. But over the long-term, this has repercussions for the overall economy.

Financial Stress

The survey found that nearly a third (30.8%) of those earning between $100,000 and $149,000 per year are concerned about their finances in the short term (the next 0-6 months). This is up from 21.3% just one year ago, indicating that the cost of living increase is really starting to bite.

Similarly, about a third (32.5%) of Americans earning more than $150,000 per year feel financially stressed, up from 21.7% a year ago. A major point of stress for more affluent workers includes the fear of losing a job and being unable to maintain their existing lifestyle. Even so, many Americans still feel optimistic about the future of their finances. According to the Fed’s data, over 40% of respondents making $150,000 or more expect their income to increase next year.

Back to the Budget

Let’s be clear, if Americans struggle to make ends meet, that’s a problem, and it doesn’t matter if they bring home a high or low income in the meantime.

Over the past years, as inflation soared and costs went up, many lower-income households felt these effects more intensely, while more higher-income households were able to absorb these price shocks. But perhaps, the inflation chickens are coming home to roost now. If more households cut their spending, it could eventually hamper America’s economic growth engine, which feeds off consumer spending.

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