60% of millennials earning over $100,000 say they're living paycheck to paycheck

[ansible]

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. 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 $80,000.

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 $48,500 to $145,500 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, $100,000 is considered middle class in the US.

https://www.businessinsider.com/high-earning-henry-millennials-six-figure-salaries-feel-broke-2021-6

[zipplewrath]

1. Sorta always been true

There's something called "house poor" where you get a mortgage at the very limit of your ability to pay. Yes in 10 years or so the mortgage will be more "affordable" for you, but initially it has you in a tough cash flow situation. In the '90s, a bunch of us were all at risk of getting laid off. At the time we were all making about $60k, which was alot of money at the time. Yet I knew many people who wouldn't last more than a month without a pay check.

[Shermann]

7. "College poor" may be closer to the truth

If you subtracted the amount of gross income necessary to pay my student loans back in the day, it would have put me under the poverty line for almost 10 years.

[Hekate]

2. How much unavoidable student debt are they carrying? How much are houses where they live?

Last edited Tue Jul 13, 2021, 04:45 AM - Edit history (1)

If you live in the back of beyond where housing is cheap and you haven’t invested in a college education, $100,000/year sounds like a king’s ransom. Inflation has made it worth a lot less than a generation ago.

[Hugh_Lebowski]

3. Raw numbers like $100K per household are not a very useful metric anymore ...

In large part because there's gotten to be SUCH a variation across the country in terms of what a dollar buys, housing-wise.

So ... stats like where do you live, and how many people are in your 'household' ... are hugely impactful.

A household of 4 living in a nice home in the CA Bay Area that's making 100K, unless they've owned their home for a long time, are probably just getting by.

Whereas a household of 1 making 100K and renting a 1 bedroom somewhere in Bumfuck can live pretty damn large.

[Chainfire]

4. People with good incomes just need to learn to spend less than they make.

[Dream Girl]

5. Where do you live?

[Chainfire]

8. Shangri-La

By choice.

[fescuerescue]

29. That's a truth no matter how much you make

It really doesn't get any more basic than that.

[Pobeka]

6. I generally have little sympathy.

So many of my peers when I was early in my career all had to have their "toys" -- expensive cars, boats, video games, tech, tech, tech. HAVE to go see the latest movie, every other week, etc etc.
---

We lived in a modest house, our entertainment was videos we got from the library, going to the park, playing games.

Our children grew up never knowing or caring their friends all go the coolest new toys provided by their parents.

And because of that lifestyle, I could retire early. With two wonderful children that are doing quite well too.

[Budi]

9. How much more than $100,000 can this group expect to earn 3 to 5 yrs from now?

Half the people in this country would give anything to make $100,000 a year.

[Hekate]

21. Half the people in this country live someplace where wages are lower & housing costs less & college

… tuition is a debt they are not saddled with because they didn’t go to college. When I see the cost of a nice house in those parts of the country I just shake my head — and then I get pissed because they dare to judge me and mine for having been born in / be working in a different region where the cost of a place to live is through the roof and a career requires a college education.

[Sympthsical]

23. Come to San Francisco

See how far that gets you.

Hint: Not very.

[sir pball]

30. I live in Manhattan

Not even a notoriously expensive part, Hamilton Heights. My wife and I make about $130k... we're comfortable, but just, and we definitely have to keep an eye on spending.

[Sympthsical]

31. Yeah, I don't get some of these responses.

The expensive lifestyle bit got me. I mean, if rent or a mortgage is part of your lifestyle, that's a new definition for me. I figured lifestyle was things like cars, vacations, eating out, etc.

My partner and I moved 40 miles north of SF specifically because we wanted to buy a house. We both make very, very good salaries, but there's just no justification for the city. Even then, we keep a close eye on expenses.

100k in around the Bay Area, particularly in the city or South Bay/Silicon Valley, is honestly just barely middle class. No one's living large there on that.

[mahina]

10. There is no way 60% of millennials make 100k a year.

This smells like some kind of divide and conquer stuff but I can’t see who benefits from it.

Of course I live in a place where wages are low and costs are high. I realize people make a lot more money on the continent but then there you are. I’ve done it before I don’t think I could do it now.

I don’t know very many people that make that kind of money of any age so I do know a bunch of people who make a whole lot more and I suppose averages average out.

Ugh, Business insider. Ok I’ll click it.

[mucifer]

12. I believe you misread the OP 60% OF THOSE MAKING over $100,000 are living paycheck to paycheck So it

might be very few millennials who actually fit in that category.

[mahina]

19. Ah! You're right.

[Mariana]

13. It doesn't say that.

Some Millennials earn $100k a year. 60% of THOSE Millennials say they live paycheck to paycheck.

[spooky3]

14. the headline's wording is confusing - it means OF THOSE who make over $100k

60% say they live paycheck to paycheck.

My guess is that many if not most of the millennials who make over $100k annually are living in very high cost cities. If you are living in a city with costs that are 50% higher than the average cost in the US, then a salary that is 50% higher will typically give you no more breathing room than average.

[napi21]

15. I live 30mi. north of Atl. Ga. $$100,000 is good money, but you still have to watch what you spend.

We have a normal house (1,700 sq.ft.), 4 cars, & 2 teenagers (who each have their own car, that why there's 4 cars!). (Everything is fine . All is fine unless something like Covid19 comes along & my husband gets put on 3 day s a week, I get laid off, & the girls, who only work part time to begin with, don't get any hours. The Mtg. is still due, the one car pmt. we have is still due, the utilities still get billed, & everybody still insists they have to eat!

I sure understand how that many millennial's can be living on the edge!

[spooky3]

16. Exactly right. I'm in the DC metro area and $100K doesn't go far here

compared to where it would get you in most places.

[BigmanPigman]

11. They obviously weren't raised by my parents...

Live within your means, no matter how little you make. I was an artist then a teacher and teachers' salary was a lot for me compared to what I had been making my whole life working in retail/cashier, etc. I was raised to save every cent and I still do (you never know what will happen). I am not cheap, I am frugal and I spend wisely.

I would be living fairly well off right now if it hadn't been for Reagun's policies. I blame him for most of our country's problems since most began with him and got much worse for Americans since 1980. He killed the Middle Class.

[Budi]

17. He did indeed kill the engine of America. The middle class

Reagan was the point of American decline.

😕

[Budi]

18. He did indeed kill the engine of America. The middle class

Reagan was the key point of American decline.

😕

[Johnny2X2X]

20. People don't get it

$100k isn’t much if you were making $96K which isn’t much if you were making $91k etc.

I just got a $3000 raise, after taxes, insurance, and retirement, I’ll take home an extra $60 every 2 weeks. You don’t wake up making $100K. You start at much lower and creep up, it means you end up spending more every year. Eventually you realize you can’t have debt and accumulate wealth. So then you work on credit card debt you might have from college or emergencies along the way. Then of course there is student debt for most people making $100K.

I make that, I don’t live paycheck to paycheck, but I’m also not someone with 6 month’s bills in the bank. You spend what you make, you pay down debt as you can, and you put the max into retirement. Young people making 6 figures living paycheck to paycheck are probably setting up their retirement as best they can.

You have to realize that after taxes, health insurance, and retirement, $100K a year might be $1150 take home a week. Now that person is doing fine, but still might be paycheck to paycheck.

[Sympthsical]

22. What the hell is this article?

Expensive lifestyle?

I can tell you plenty of techies around the Bay Area make six figures. I can also tell you they will never own homes in the Bay Area. I have friends working in Silicon Valley, making gobs of money, who still have roommates well into their 30s.

Any survey like this is going to be skewed. The people who make 100k are also more likely to be living in areas where living expenses are higher. Kind of how that often works. I know I wouldn't be making nearly as much as I do in, say, New Mexico.

Just waiting for the avocado toast comments at this point. Thread isn't disappointing in the least.

[meadowlander]

24. Yep.

$100K
-$25K taxes
-$20K student loan payments
-$25K rent
-$6K food
-$8K car payment, insurance, gas
-$5K health insurance
-$5K retirement contributions

Only leaves about $5K a year for discretionary spending. Once you buy work clothes, furniture, a computer, a cell phone plan, the odd meal out or drinks after work a few times a year, the odd emergency, the odd trip home or basic vacation and you're not exactly living high on the hog. And that's not even allowing for any real emergency savings build-up or trying to pull together a down payment for a house.

It's not abject poverty, but it's not unreasonable to be living paycheck to paycheck at $100K without exactly burning money on frivolous gee gaws if you have student loans, live in a city and aren't constantly leaning on your parents for things.

[Sympthsical]

28. You nailed the entire thing

My partner and I are comfortable mainly because we're DINCs, and when it came time to buy a house, we chose North Bay where home prices are significantly cheaper. Emphasis being on cheaper - not cheap. But we're pretty much halfway to Sacramento.

He's in his 40s and still paying off student loans. He has a PharmD, and that was a whole thing. I'm almost middle aged, and I just finished paying off my master's a few years ago. We have a very nice house, but we're at Safeway with digital coupons and Costco. Both our cars are over ten years old. We take one nice vacation a year, and I use my other time off visiting family across country. Our last evening out was going to the batting cages (so much fun!). Eating out is basically going to California Burrito once in awhile ($6 Wednesdays! Up from $5, sad face). Our anniversary is tomorrow, and we're going to spend $50 on dinner. That's lavish for us.

We're probably considered upper middle class, but the lifestyle thing slayed me.

I have a friend living in S.F. proper, an IT manager for bank security systems. The guy has three roommates renting a three bedroom house. Another friend is a manager at FB who's getting married to another FB employee. They finally bought a year ago. A two bedroom townhouse down in South Bay. It was $2 million. And they only managed, because there's two of them.

Ooft. This article boiled my jimmies.

[Trex666]

25. I can feel sympathy if this is because they're paying off student loans

If it’s because they’re spending too much money on fancy restaurants, clothes, cars, etc.-eh, sorry, I feel little sympathy.

[Tarc]

26. I could live like a king on 100k in northern New England

but I doubt many millennials in my area fall into this category. 100k in the more high-tech and ritzy [places in the country doesn't take a person as far as the yokels think.

[WhiskeyGrinder]

27. Thank god they got the "lifestyle" thing out of the way before addressing the real problem,

which is debt and rising cost of living, driven by housing. Otherwise we couldn't dismiss the issue.