Americans are feeling a lot of financial pressure in 2024. Recent surveys have shown that Americans are losing an average of five nights of sleep per month because of money stress. A new Federal Reserve survey found that people at all income levels are feeling the strain — even high earners who make over $150,000 per year.
You might think that higher-income Americans would worry less about money — and in some ways, they do. But people earning $150,000 a year are still struggling to save, and some have had to resort to heavier borrowing, side hustles, and other methods to cope with financial stress.
Let’s look at a few ways that high-income Americans are dealing with the higher cost of living — and how everyone can make some savvy moves to improve their personal finances.
Americans are more worried about money
The Federal Reserve conducts an ongoing, quarterly survey of Americans, called the Labor Income, Finances, and Expectations (LIFE) Survey. The survey asks people about their employment status, income, how they feel about their personal finances now, and their concerns for the future.
The latest LIFE Survey was published in June 2024, and it shows a higher level of financial stress for Americans of all incomes. Americans are more likely now than a year ago to say that they are concerned about making ends meet in the coming year. In fact, 34.9% of all Americans, and 32.5% of Americans earning over $150,000 per year, are worried about making ends meet in the next six months. Those percentages are up from 28.7% of all respondents, and 21.7% of high earners, in April 2023.
Biggest financial worries for $150K earners
Here are a few highlights of the Fed LIFE Survey that show some of the biggest areas of personal finances where high-income Americans (who are employed and earning over $150,000) are more likely to be worried:
- My employer cutting my job or laying me off: 39.7% of high-income Americans were worried about job loss, compared to 31.6% of all respondents.
- My employer’s ability to stay in business: 39.1% of high-income Americans were worried about their employer going out of business, compared to 29.1% of all respondents.
- Finding or keeping eldercare: 38.7% of high-income Americans were worried about the cost and availability of eldercare for aging loved ones, compared to 29% of all respondents.
- Finding or keeping child care: 37.9% of high-income Americans were worried about child care, vs. 29% of all respondents.
The takeaway: Having a higher income doesn’t necessarily mean people feel more secure in their jobs, or more comfortably able to afford big expenses like child care. No matter how much money you make, it’s important to try to build up a decent emergency fund.
How high earners are coping with money worries
It’s not accurate to say that Americans are all in the same boat when facing money stress. Someone who earns $30,000 per year and can’t afford to make rent is in more financial peril than someone who makes $150,000 per year and can’t afford to pay the full balance on their premium rewards credit card.
But the Fed survey found that high-income Americans are using some of the same strategies as everyone else to deal with their financial problems. This table shows a ranking of financial coping strategies used in the past 12 months by high-income earners, compared to Americans overall.
| Coping strategy | Americans earning $150,000 or more | All respondents |
|---|---|---|
| 1. Cutting discretionary spending (entertainment, dining out, etc.) | 37.1% | 43.1% |
| 2. Cutting essential spending (food, medical care, etc.) | 17.1% | 23.5% |
| 3. Taking an additional job | 15.3% | 13.1% |
| 4. Borrowing from friends or family | 14.6% | 18.0% |
| 5. Taking money out of retirement savings early (like a 401(k) plan) | 14.3% | 10.2% |
| 6. Paying less or skipping other debts or monthly bills | 8.8% | 15.8% |
| 7. Unemployment insurance payments | 5.1% | 3.0% |
Data source: Federal Reserve Bank of Philadelphia Consumer Finance Institute LIFE Survey Data, published June 2024
Interestingly, higher-income Americans were more likely than overall respondents to say they had used unemployment benefits in the past 12 months. This could be a sign that the job market has been a bit stronger for lower-income people, while higher earners might have been more vulnerable to tech layoffs and a “white collar recession.
High-income Americans were also more likely to take an additional job (15.3% of high earners vs. 13.1% of overall respondents), and take money out of retirement accounts early (14.3% of high earners vs. 10.2%) of overall respondents. Perhaps higher-income people are more likely to have enough retirement account assets to use as an emergency fund, and are more likely to have in-demand job skills that can be used to start a side hustle.
The takeaway: Using your 401(k) or IRA for emergency cash should only be done as a last resort — it can cause you to owe extra tax penalties and miss out on long-term investment growth.
Bottom line
Americans at all income levels are feeling the pinch of higher prices, depleted savings accounts, and general economic uncertainty. If your personal finances have gotten more stressful in the past year or so, it’s more important than ever to get a handle on your money. The best budgeting apps can help you see where your money is going and find ways to save.
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