Many young adults were never taught how to save their money.
That’s the only explanation for a recent study that found that 60% of millennials earning more than $100,000 per year are living paycheck to paycheck. This group even has its own acronym, according to Business Insider: the HENRYs (or High Earners, Not Rich Yet).
Why is it that so many 30-something-year-old adults feel financially stressed? In most parts of the country outside the big cities, a six-figure income puts a person well above the middle class and into the upper 5% of the working population. In Ohio, for example, the median income is $30,000. Surely, a young adult making three times that could afford to put money away.
But no. According to a survey by PYMNTS and LendingClub, high-earning millennials are caught in a nasty cycle of their own making. They spend a lot and continue to spend even more as their income rises. They rarely put cash in their savings accounts, even if this means they can never make a down payment for a house.
However, there are other factors weighing down millennials’ bank accounts. Young adults are often saddled with thousands of dollars in student loan debt. On average, college graduates owe about $36,000. Millennials are also more likely to choose to live in places with higher costs of living, which means the money they do make won’t go as far as it should.
Yet, it shouldn’t be that difficult to set aside a few hundred dollars per month. Six-figures is a lot of money, especially for those without children, mortgage payments, or other long-term expenses. But until young adults start to view saving money (or investing it) as a necessity and a privilege, they’ll choose to rent in the hip neighborhood over buying a place with a lawn every time.
