Americans feel like they are not financially secure and need to earn over $186k in order to change that, study shows!
A recent Bankrate report reveals that three out of four Americans feel like they are not financially secure and believe they need to earn more to achieve it. On top of that, they feel like they need an average income of $186,000 per year in order to change that. This is more than double the average full-time worker’s earnings of $79,209 in 2022, according to the Census Bureau.
Among those who feel insecure, 45% believe they will eventually reach financial security, while 30% do not expect to ever feel secure. Older generations claim higher levels of insecurity. Specifically, 42% of Baby Boomers (aged 60-78) and 37% of Gen Xers (aged 44-59) feel they will never be financially secure. In contrast, only 21% of Millennials (aged 28-43) and 13% of Gen Z (aged 18-27) feel the same way.
“Life always seems like it’d be better with just a little bit more money to spare. That’s even more true when the items Americans both need and want have been climbing in price. In the four years since the pandemic, comfort is no longer a commodity but a financial privilege, appearing to only be afforded to those wealthy enough to ‘eat’ the impact of inflation”, Bankrate analyst, Sarah Foster.
Only 6% of survey respondents currently earn what they feel is enough for financial security. However, 37% believe they will eventually earn enough. For those earning more than $100,000 a year, 49% are hopeful about achieving financial security, compared to just 34% of those earning less than $50,000.
Americans now say they need an income of $520,000 to feel wealthy, an 8% increase from the previous year’s $483,000. Inflation has driven these rising expectations. The Bureau of Labor Statistics reports a 21% increase in prices since 2020, the USDA notes a 25% rise in food costs, and gas prices have jumped by 41%.
“Making more money is the secret to weathering inflation, but it’s also true that being a higher-income earner won’t automatically translate to being better at personal finance. Someone with a traditional middle-class salary who always tries to save for the future, no matter how small, is destined for financial success more than an ultra-wealthy earner who lives and spends beyond his or her means”, Foster said.