You Earn a Nice Paycheck, But You’re Not Rich Yet? You’re a HENRY

With thousands of companies across the US worried about losing their best employees in a hot labor market, many Americans have benefited from higher salaries and retention bonuses.

But with rising inflation, the increased cost of living has taken its toll even on highly compensated individuals and couples.

A recent study by LendingClub shows that among those making between $150,000 and $200,000 a year, 48% reported in July that they were living paycheck to paycheck. This figure is 7% higher than the previous month and 13% more than May 2022. It’s also likely that most of these respondents are ‘HENRYs.’

HENRY stands for “High Earner Not Rich Yet” and describes (typically) young workers who make a lot of money, yet haven’t been able to build meaningful wealth due to various expenses like student loans, childcare, taxes, and more. This acronym originated in 2003 when a writer at Fortune Magazine coined the term.

If you are a HENRY, you likely know it already and feel pretty trapped in your situation. But there are tools to start financially planning for your future and growing your wealth.

Financial Challenges Faced by HENRYs

A study by Financial Advisor magazine found that one out of every four families making over $150,000 is living paycheck to paycheck.

Before diving into personal finance details for HENRYs, it’s essential to understand why these high earners have such a hard time building up wealth. Here are a few of the most pressing financial challenges faced by HENRYs.

Student Loan Debt

According to Education Data, the average student loan debt is $40,000 per person. For HENRYs, this amount is twice as high, around $80,000. Most HENRYs have additional degrees (think doctors, lawyers, architects, etc.), have been in school for longer, and owe more money.

Lifestyle Creep

Most HENRYs also suffer from something called lifestyle creep or lifestyle inflation. Lifestyle creep is when increased income leads to increases spending, usually when luxuries become perceived necessities and costs subsequently balloon.

Home Prices

Earning six figures isn’t equivalent everywhere. It may be worth less, depending on where you live. For example, $100,000 might go a long way in Cedar Park, Texas, but in Los Angeles, California, where the median home price is around $1 million, it’s not even enough to put a downpayment on a home.


Another factor that heavily hits HENRYs – and all working people – is inflation. It might seem like the average wage has risen over the past two decades, but this notion quickly falls apart when factoring in inflation and the rising cost of goods.


The final thing that impacts high earners’ ability to save is their expectations. Many of these young professionals suffer from FOMO – Fear Of Missing Out – and try to match their lives to those of their peers. These inflated expectations can lead to increased unnecessary spending trying to “keep up with the Joneses.”

Financial Planning for HENRYs

As a HENRY, you already have a good income, which means you can overcome your financial challenges with proper financial planning. It’s important to remember that you have control over your finances and, ultimately, the trajectory in which you build wealth.

Here are some financial planning tips to help HENRYs build their wealth instead of spending it.

Get Out of Debt

Few things can hurt your ability to build wealth as much as debt. It doesn’t matter how much you make if you fail to pay off your loan obligations. The key to paying off debt is to make it a priority. Before going through and spending your money on monthly expenses, dedicate a portion of itto paying down your debt. Experts recommend 20%, or whatever amount you can stomach.

Create a Budget

It’s extremely tough to improve in an area you don’t track. Tracking your monthly income and expenses can be a great start towards creating a monthly budget. A monthly budget is an effective tool for helping you live within your means and save money for your future.

You can easily create a budget in a bullet journal or on something like Excel, or check out some of these budget apps, which make it easy for you:

  • YNAB – You Need A Budget
  • Mint
  • Pocket Guard
  • Personal Capital
  • Zeta

Start To Save Money

Once you’ve started tracking your expenses and following a budget, it will be much easier to cut down on costs. Make sure to identify what is a need in your monthly spending while aggressively cutting back on the “wants.” Saving money can include minimizing dining out, canceling unnecessary monthly subscriptions, and cutting back on your grocery bills.

Earn Additional Income

Sometimes, saving a lot isn’t enough. Maybe you live in a high-cost-of-living area where cutting expenses is just not feasible. Consider earning additional income outside your regular job if this is the case. Earning extra income can include:

  • Doing part-time consulting work in your area of expertise
  • Tutoring local students, either in person or online
  • Starting a business on the side
  • Doing freelance work and building your network through your regular job.
  • Selling or flipping used products

Nowadays, there are more ways to make money than ever. All you have to do is carve out the time and dedication to commit to a side hustle and stick to it!

Consider Hiring a Financial Advisor

Maybe you’re sitting there shaking your head and thinking, “these all sound like handy tips, but I just don’t have the time or energy to implement any of them.” If this is the case and you’re feeling overwhelmed, it might be wise to consider hiring a financial advisor.

Here are some questions to ask yourself to determine if hiring a financial advisor is the right choice for you:

  • Do you have a good knowledge of investments and know how best to allocate your own money?
  • Do you have the time to monitor financial instruments consistently and make adjustments if/when needed?
  • Are you an avid reader of financial publications and updated on the latest research regarding financial topics?

If you answered yes to these questions, managing your own money will probably be in your best interest. If not, consider meeting with a financial advisor for a consultation.

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This article was produced by Wealthtender and syndicated by Wealth of Geeks.

Jeff is a current Harvard student and author of the blog Financial Pupil who is passionate about learning, living, and sharing all things personal finance-related. He has experience working in the financial industry and enjoys the pursuit of financial freedom. Outside of blogging, he loves to cook, read, and golf in his spare time.