empty walletPhoto byEmil KalibradovonUnsplash

According to a Federal Reserve Bank of Philadelphia survey, the American people in upper-income demographics are worried about their capability of paying bills, with over 15% of this group taking on extra side hustles over the last year.

Roughly 32.5%, (as of April 2024), of participants earning more than $150,000 a year were concerned about making their monthly financial goals over the next 6 months, up from 21.7% in April of 2023, the June survey showed.

That percentage is greater than for the ones in the income demographic of $100,000 — $149,999, $70,000 — $99,999, and $40,000 — $69,999. Only people who made under $40,000, the lowest income demographic, were more concerned than those in the $150,000+ demographic.

Among all levels of income, the percentage of those worried about their capability of paying bills was greater in April 2024, as compared with one year ago. The share of participants anxious about making ends meet increased among the ones already paying their bills on time, with the rise most prevalent among those who are in higher income groups, females, or younger.

In April of 2023, 20.7% of people who could pay all their bills were concerned about the following 6 months. This soared to 26.2%, in 2024.

The numerous income demographics behaved differently in how they dealt with their tighter budget situations over the last year.

Among the $150,000 demographic, 15.3% took a second job, the greatest among all levels of income. This demographic borrowed the least from formal resources; however, was the second-greatest when it pertained to borrowing from friends or family.

Individuals making under $40,000 ranked at the bottom as far as taking on additional work was concerned. But, they ranked second-highest at borrowing from formal resources and were at the tip-top as far as borrowing from friends or family was concerned.

Only 8.8% of people in the $150,000 or more demographic skipped their month-to-month debts or bills or paid partial payments, the least among all levels of income. The ones earning $100,000+ cut back the least on discretionary and essential spending.

The survey depicts that while upper-income demographics were more concerned with higher costs impacting their capability of paying bills, a smaller proportion had to slash spending, as compared with their low-income counterparts.

Inflation Pressures

As higher-income demographics come under more and more inflationary burdens, discount retailers are reporting a rise in the amount of consumers from this group. Dollar Tree, in March, claimed their outlets witnessed an uptick in traffic from fairly wealthy customers last year.

In May, during an earnings call, Walmart executives additionally explained that they witnessed ‘higher engagement around income cohorts, with higher-income households continuously accounting for most of the share gains’ in the most recent reported quarter.

According to Walmart CEO, Doug McMillon, in the past, those with upper incomes shopped at the company’s stores. These types of groups have typically been picky in the categories they purchase.

He added that ‘so, if we provide them the right goods at the right prices, whether that is marketplace, first party, or in-store, they will react to that. And so, as we have had the ability to grow our assortment on the internet, we’re able to appeal to more shoppers.’

In a survey by digital personal finance firm Achieve, most respondents claimed they weren’t anywhere near reaching their definition of monetary freedom.

According to Achieve’s co-CEO and co-founder, Brad Stroh, they are witnessing fewer people in America with the aim of becoming ‘rich’ and a lot of families pivoting to simply trying to have the ability to pay their bills in a timely manner. With all the economic burdens facing U.S. families, financial freedom is presently more about meeting monthly goals.