More Money, More Problems? Cost of Living Hits High Earners Hard

Covering costs amid higher prices have left consumers across income levels stretching their budgets — even among those in the highest earning brackets.

The share of high earners living paycheck to paycheck has been most recently indicated in proprietary research carried out in preparation for PYMNTS’ June collaboration with LendingClub, “New Reality Check: The Paycheck-to-Paycheck Report.”

As the chart notes, the rate of consumers earning between $150,000 and $200,000 annually living paycheck to paycheck with issues paying bills is 8.6%, a higher share than the income brackets both above and below this demographic. Elsewhere, the financial lifestyles fall into more expected patterns.

This begs a question: Could this income level be the proverbial tipping point, financially, for those consumers whose incomes may have previously afforded them a more luxurious lifestyle?

With financial strain almost certainly taking its toll on anyone, proprietary research carried out for the same report notes the specific items mostly setting this demographic back.

Aside from the nebulous “Other,” consumers earning more than $100,000 per year led the lower-earning demographics on home repairs and unexpectedly high bills. The latter may be more concerning to these earners than others, as consumers tend to drain savings for bill pay and wages are being further stretched to cover everyday costs. For those who haven’t significantly altered their spending habits, this sudden shift could be the makings of a rude financial awakening.

Recent waves of white-collar layoffs in the banking, retail and tech sectors may also have hit this income bracket particularly hard. And although earners making between $150,000 and $200,000 per year may find a job more easily than others, the recent pullback of investor funds could mean these consumers working in affected industries could see a pay cut.

These higher earners may now be learning the harsh lesson consumers making less have already faced: no matter the income level, it is getting more and more difficult these days to make ends meet.

The post More Money, More Problems? Cost of Living Hits High Earners Hard first appeared on PYMNTS.com.