MONEY & LIFE

Who Are HIFIs And Why Do They Struggle to Make Ends Meet?

By: Anneken Tappe · May 21, 2024 · Reading Time: 2 minutes

A surprising amount of millennials and Gen Zers are living paycheck-to-paycheck even though they are high earners. They’re the latest acronym on the block: HIFIs, which stands for “high income, financially insecure.”

Outspending or Underearning?

At the start of 2024, more than a third (36%) of U.S. consumers earning more than $200,000 annually were living paycheck-to-paycheck, according to a study by fintech research firm PYMNTS .

Lifestyle inflation, which describes spending more as you’re earning more, has long been known about, but younger generations have changed their spending patterns to boot. HIFIs spend roughly 28% of their income on recreation, personal care, and other nonessential items, according to the PYMTS study. And per consulting firm Bain & Co. , spending on luxury goods surged in 2022, driven by younger generations of high earners.

While higher overall spending may be linked to the high inflation environment of the post-pandemic period, the shift in spending behavior may also speak to a “keeping up with the Joneses” mentality, or the so-called “YOLO economy” that emerged after the Covid lockdowns.

The rise of Buy Now, Pay Later (BNPL) services may be fueling this trend further, allowing consumers to make purchases even if they don’t have the cash on hand, making it easier to overspend.

Immediate Gratification

Lifestyle is an important component of any budget, but it shouldn’t jeopardize other financial goals or long-term plans. HIFIs may be helping to buoy consumer spending in the short term. However, if they continue to live paycheck-to-paycheck or accrue debt, it will deal a blow to their financial futures.

Looking for more stories like this? Check out On the Money — SoFi’s one-stop-shop for news, trends, and tips!

Check it out


Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

Communication of SoFi Wealth LLC an SEC Registered Investment Advisor

SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
SOSS24052103

TLS 1.2 Encrypted
Equal Housing Lender