Lots of people might think that earning a big salary means you don’t have to worry about money anymore, right? Unfortunately, no. Many people who earn six-figure incomes still feel financially strapped. It’s a good problem to have, but some high earners are still living paycheck to paycheck and struggling to save money.

Let’s see how high-income Americans are coping with financial stress — and what this trend can tell us about financial wellness.

High earners are not immune to financial stress

A consumer survey conducted in April 2024 by the Federal Reserve Bank of Philadelphia found that Americans at all levels of income are feeling strain on their household budgets. According to Bloomberg analysis of the survey, more than 33% of all U.S. consumers, and 30% of Americans who make $150,000 or more, said they’re worried about making ends meet in the next six months.

Higher-income Americans ($150K or more) are making some of the same moves as other U.S. consumers to cope with high prices and financial pressure.

According to the Fed survey, here’s the percentage of Americans who made each of these financial moves in the past 12 months:

• 37.1% of high-income Americans are cutting back on discretionary spending (vs. 43.1% of all Americans)
• 17.1% of high-income Americans are cutting back on essential spending like medical care or food (vs. 23.5% of all Americans)
• 10.2% of high-income Americans are borrowing more with credit cards or personal loans (vs. 14.1% of all Americans)
• 8.8% of high-income Americans are paying less or skipping other debts or monthly bills (vs. 15.8% of all Americans)

This news is not encouraging, per se, because it’s not a great sign that so many Americans are cutting back on medical care or trying to juggle minimum debt payments. But if you make a lot less than $150,000 per year and are struggling to build up some cash in the bank, take heart: you are not alone. Even many people who make high incomes are still trying to find more breathing room in their budgets.

Financial strategies that higher-income Americans are more likely to use

According to the Fed survey, higher-income Americans are less likely than Americans overall to use most of the financial coping strategies, like borrowing money and skipping or reducing payments on debt. But there are two financial moves that higher-income Americans are more likely to use:

• Taking an additional job (15.3% of high-income Americans vs. 13.1% of all Americans)
• Taking money out of retirement savings early (14.3% of high-income Americans vs. 10.2% of all Americans)

Higher-income Americans might be more likely to have in-demand career skills and a flexible schedule that can be a good fit for working an extra job. And higher earners — just by having bigger paychecks over the years — might be more likely to have money in 401(k) accounts, traditional IRAs, or other retirement accounts that they can withdraw in case of emergency.

Note: Early withdrawals from retirement accounts like 401(k)s and IRAs can result in extra tax penalties. Try not to pull money out of your retirement savings early, unless it’s a last resort.

Why high-income Americans are strapped for cash

The everyday essentials of American life — housing, car insurance, food — have gotten more expensive for almost everyone in the past few years. Life tends to get more expensive as people make progress in their careers.

If you’re taking care of a family, paying a bigger mortgage, dealing with higher marginal tax rates, and otherwise experiencing the lifestyle creep that tends to go with higher income — even if you’re financially fortunate and grateful, it can feel as if you don’t have much cash left after paying the bills.

$150,000 per year of income can buy a nicer lifestyle than $50,000 per year, but it doesn’t necessarily mean more money in your savings account. High-earning Americans still need to make smart money moves to save and invest for the future — or else the money disappears into the daily rush of paying bills and buying stuff.

Bottom line

Higher-income Americans are getting squeezed by the same economic pressures as everyone else. That doesn’t mean that high-earning Americans’ struggles are the same or worse than lower-income people; but $150,000 per year can still get gobbled up quickly by monthly bills and debt payments.

No matter how much money you make, budgeting apps can help you track your spending and find ways to save. Higher incomes don’t always lead to higher levels of wealth, unless people make a proactive effort to save and invest for the future.

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