Additional Coverage:
- Even Americans making over $150,000 are cutting spending and worrying about making ends meet (newsbreak.com)
In the United States, there’s a growing concern among individuals with six-figure incomes about their ability to manage their finances, with many expressing more worry than those earning between $40,000 and $99,999. This information comes from a recent study by the Federal Reserve Bank of Philadelphia, where around 5,000 participants shared their financial anxieties in the Labor, Income, Finances, and Expectations (LIFE) Survey.
According to the survey’s findings, 32.5% of individuals making $150,000 or more are apprehensive about covering their expenses in the next six months. This sentiment is closely shared by 30.8% of those earning between $100,000 and $149,999. Conversely, a smaller percentage of individuals earning between $40,000 and $69,999 (29.8%) expressed concerns about making ends meet, with only 23% of those making between $70,000 and $99,999 feeling the same way.
People with incomes below $40,000 are showing the highest levels of financial anxiety, with 40% worried about their financial situation in the coming months. However, this is a slight decrease from previous surveys, where around 43% cited concerns earlier in the year and in October 2023.
Interestingly, the survey reveals a growing unease among higher earners over time. For example, only 20.4% of those earning more than $150,000 were concerned about their finances in July last year, a number that has steadily increased in subsequent surveys.
Amidst various economic factors such as falling inflation rates, rising prices at a slower pace, increasing global tensions, political uncertainties, and a growing national debt, Americans across the income spectrum are adjusting their financial strategies. Among high earners, 17% have reduced essential spending and 37.1% have cut back on non-essential spending in the past year.
The survey also highlighted that high-income earners are particularly worried about issues like childcare, elder care, job security, potential business closures, and health concerns at work. Despite these concerns, there’s a broader sense of optimism among wealthier Americans about the economy, contrasting with more mixed feelings among lower income groups.
Overall, consumer sentiment remains relatively stable with the University of Michigan’s consumer sentiment index reflecting little change, indicating a cautious yet steady outlook among Americans regarding the economy and personal finances.