Even wealthy Americans struggle to make ends meet

new York
CNN
—

About one in three Americans earning a six-figure salary worries about paying their bills, according to a new survey from the Federal Reserve Bank of Philadelphia.

The survey reveals a notable increase over the past year in the number of consumers earning $100,000 a year or more and concerned about making ends meet over the next 12 months.

A significant share of wealthier Americans are coping with financial pressure by cutting back on spending, including cutting back on dining out and entertainment.

The findings underscore how years of high inflation and high borrowing costs continue to squeeze consumer budgets, even for those at the higher end of the income scale.

Nearly a third (30.8%) of consumers earning between $100,000 and $149,999 a year worry they won’t be able to make ends meet in the next six months, according to Philadelphia Fed survey , conducted from March 22 to April 6.

That’s up from 21.3% of Americans in this income bracket who were worried about making ends meet a year earlier.

Similarly, 32.5% of those earning $150,000 or more indicated they were concerned about paying bills, up from 21.7% a year earlier.

The wealthiest Americans are more concerned than the 23% of those earning between $70,000 and $99,999, the survey found.

Among all consumers, around one in three (34.9%) say they are concerned about making ends meet, compared to 28.7% a year earlier.

Younger Americans are more likely than older Americans to feel financial pressure.

Forty-one percent of people aged 18 to 35 say they are worried about making ends meet, compared to only 22% of those over 65.

There has also been a notable increase in higher-income consumers nervous about paying their bills over the long term.

For example, 32.3% of those earning between $100,000 and $149,999 said they were concerned about making ends meet in the next seven to 12 months, up from 26.5% a year ago. There was an even bigger increase among those earning at least $150,000, with 33% saying they were concerned, up from 19.8% a year ago.

The Philadelphia Fed’s survey found a “large and significant” increase over the past year in the number of people who are currently able to pay their bills but fear they won’t be able to in the next six months. This figure increased from 20.7% a year ago to 26.2%.

The mood, however, was not so gloomy.

A growing share of wealthier consumers expect higher incomes this year, including 40.8% of those earning $150,000 a year or more, up from 20% a year ago. And consumers reported feeling more optimistic than a year ago.

This may explain why Americans continue to spend aggressively on travel.

The Transportation Security Administration screened a record 2.99 million people at airports on Sunday.

The agency is preparing for a record summer of air travel, peaking during the July 4 holiday.

The TSA plans to screen more than 32 million people from June 27 to July 8, which is 5.4% more than last year.

Yet to manage financial stress, 43.1% of consumers say they cut back on discretionary spending on things like entertainment and dining out. More than a third (37.1%) of those earning more than $150,000 per year say they do the same.

Some consumers are even cutting back on essentials like food or medical care, with 23.5% of all Americans saying they are doing so, compared to 17.1% of high earners.

Other measures include taking an extra job (15.3% of top earners), borrowing more (10.2%) and withdrawing money from retirement savings earlier (14.3% ).