But high-income earners are under increasing pressure, a LendingClub survey found. Among people earning six figures or more, 49% said they were living paycheck to paycheck, up from 42% last year.
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Alternatively, among those with incomes less than $100,000, the proportion who reported a subsistence salary remained flat or declined over the same period. Among those whose income rose from $50,000 to $100,000, it rose slightly from 64% to 63%, and among those whose income fell from 80% to 73%. Income less than $50,000.
Depending on where you live, $100,000 in income may not be that much, said Anuj Nayar, Lending Club's director of financial health.
Another report from SmartAsset analyzed how far six digits can grow in 25 of America's largest cities. For example, in New York, $100,000 becomes just $35,791 after taxes and the high cost of living.
In contrast, a six-figure salary is much more valuable in Memphis, where it is worth approximately $86,444 due to a lower cost of living and no state income tax. Here's a breakdown of the income you need to live in the country's most popular cities.
A colorful cafe-bar located on Beale Street, the iconic music and entertainment district in downtown Memphis, Tennessee.
Benedek | iStock | Getty Images
In general, 69% of city residents live paycheck to paycheck, 25% more than suburban residents, the Lending Club study found.
“While income is clearly an important factor, it appears that where consumers live is almost equally important in considering whether they can live paycheck to paycheck,” Nayer said. .
In addition to rising mortgage rates and home prices, rents remain high in many cities across the country, according to the latest data from Rent.com.
As of last month, 29 of the 50 most populous U.S. cities had seen significant rent increases compared to a year earlier, according to research from Rent.com.
Compared to two years ago, rents have increased by more than 16%, according to Rent.com researcher Jon Leckie. This equates to a $275 increase in your monthly rent bill.
“This kind of growth in such a short period of time is going to put tremendous pressure on public finances.”
Carolyn McClanahan, CFP, founder of Life Planning Partners in Jacksonville, Fla., says high-income earners and city dwellers are more susceptible to “lifestyle derangement.”
The more a consumer earns, the more they will spend, especially on things like eating out, delivery through DoorDash, and additional subscription services, he said. It's easy to fall into the trap of spending too much for convenience.
To break this cycle, McClanahan, who is also a member of CNBC's advisory council, says, “The first thing you need to do is look at your convenience spending and find ways to cut spending that doesn't add value.” That's true.''
“Put that money into savings right away to build an emergency fund.” Once you've set aside three to six months' worth of expenses, “start saving more for other goals.”
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