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Americans earning comfortably into the six-figure salary range<\/a> are increasingly worried about how they\u2019ll make ends meet this year\u2014to the point where they\u2019re panicking about it more<\/a> than employees earning between $40,000 and $99,999. <\/p>\n That\u2019s according to a report from the Federal Reserve Bank of Philadelphia which interviewed around 5,000 people for its Labor, Income, Finances, and Expectations (LIFE) Survey released this month. <\/p>\n The survey found that 32.5% of people earning $150,000 or more are worried about paying their bills<\/a> in the six months following their responses, with 30.8% of people earning between $100,000 and $149,999 saying the same. <\/p>\n However, 29.8% of those bringing in between $40,000 and $69,999 said they were worried about making ends meet with an even smaller proportion of 23% expressing the concern if they earned between $70,000 and $99,999.<\/p>\n Those on the lowest end of the income ladder\u2014earning less than $40,000\u2014were the most concerned about how they would fare financially in the next half a year. Four in 10 people said making ends meet in the next six months was a concern, though this figure has decreased from the previous iterations of the survey: in January approximately 43% raised concerns, and in October 2023 the figure stood at 43.2%. <\/p>\n The opposite is true of the wealthier end of the spectrum, who are only getting more concerned as time goes on. Take the $150,000-plus bracket for example, only 20.4% of which said in July last year they were worried about their immediate money situation.<\/p>\n That has increased every LIFE survey<\/a> since: 24.3% in October 2023 and 29.6% in January 2024. <\/p>\n Responses across the spectrum give insight into how different demographics are responding to a slew of economic data. On the one hand inflation is falling<\/a>, down from 9.1% to 3.3% since its peak in June 2022. That being said, prices are still going up<\/a> but simply at a slower pace with new factors now also influencing the market. <\/p>\n This ranges from increasing global geopolitical tensions<\/a> through to a looming presidential election<\/a>, and an ever-increasing national debt bill.<\/a><\/p>\n Those earning $150,000+ have also acted on their fears. The Fed\u2019s data showed approximately 17% of those in the top bracket had cut back on essential spending while 37.1% added they had cut back on discretionary spending in the past 12 months.<\/p>\n This was by far the wealthy\u2019s preferred method of scaling back their spending, as a lower 15% said they\u2019d taken an extra job and 10% said they\u2019d borrowed from more formal sources.<\/p>\n Indeed cutting discretionary spending was\u2014perhaps unsurprisingly\u2014the favored method across all income groups, though those with less discretionary income were more likely to do so (for example, 46.6% of those earning $40,000 or less were using this coping strategy).\u00a0<\/p>\n As the saying goes: \u201cmo\u2019 money, mo\u2019 problems.\u201d When presented with seven points of concern by the Philly Fed, those earning $150,000 or more were more worried than anyone else on the earnings spectrum, bar one point: transportation.<\/p>\n However around four in 10 people earning more than $150,000 said they were worried about finding and keeping childcare, finding and keeping elder or senior care<\/a>, getting laid off<\/a> or their employer going bust.<\/p>\n Likewise, approximately 37% said they were worried about another shutdown knocking their employer, and 35% were worried about being exposed to an illness at work.<\/p>\n In each of these scenarios the fear factor largely went down the lower down the income ladder the respondent was\u2014bar an uptick at the end of the scale in the less than $40,000 category. <\/p>\n Those on the lower end of the income spectrum have also been more consistent in their concerns about the economy. When comparing outlook now compared to the same question a year prior, 30.5% of respondents said they felt more positive while 34.6% said they felt more negative. <\/p>\n The outlook is only marginally better the next rung up, with those in the $40,000 to $69,000 bracket netting a more optimistic outlook of just 4% when compared to a year ago. <\/p>\n At the wealthier end of the scale there is a more dramatic turnaround, with 55% of high-earners feeling more positive than a year ago versus 18% who feel more negatively\u2014netting an overall outlook uptick of 37%. <\/p>\n That being said, consumer sentiment particularly relating to higher prices has stayed fairly consistent over the past year. The University of Michigan\u2019s latest consumer sentiment index<\/a> hit 65.6 in June. <\/p>\n Joanne Hsu, surveys of consumers director, added: \u201cConsumer sentiment was little changed in June; this month\u2019s reading was a statistically insignificant 3.5 index points below May and within the margin of error. <\/p>\n \u201cSentiment is currently about 31%<\/a> above the trough seen in June 2022 amid the escalation in inflation. Assessments of personal finances dipped, due to modestly rising concerns over high prices as well as weakening incomes. Overall, consumers perceive few changes in the economy from May.\u201d<\/p>\n<\/div>\n\nCutting spending<\/h2>\n
What\u2019s got the wealthy so worried? <\/h2>\n
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