The Cure for Money Stress? Gaining (at least) One Hundred Thousand Dollars Per Year

 

Despite wages rising and inflation slowing, more Americans are becoming worried about their finances new data reveals.

A new wealth report from Edelman Financial Engines investment and financial planning says that now half of Americans say that their biggest stressor is the general health of the economy and their financial situation.

As the authors mentioned, The fact that major economic and social challenges that Americans experienced in recent years increased further in 2024 has left no doubt any longer. “there is still a trend in their experience as one of the sources of significant stress likely due to the difficulties people face in handling money.”

In particular, 48% of respondents as regulated by Edelman noted that their own monetary circumstances were the most bothering for them at the moment, which has risen over the years. While in 2023, 46% of respondents identified that as a major stressor; 43% of respondents selected that field in 2022 — the first year of the Edelman survey. The most recent one was conducted among more than 3,000 Americans who are at least 30 years of age.

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No Money Worries: What level of income generation would like?

This year, Edelman questioned the respondents about how much they’d need to make to cease being concerned with everyday living expenses.

An equal number of US adults said they would require an income of $100,000 or more to be able to reduce the amount of worry they had over finances. Of the set of respondents, 25% said that it would take them more than $200,000.

It is important to remember that most Americans do not make anywhere close to those earnings. To make the calculations easy, median earnings in the United States for 2024 are approximately sixty thousand United States dollars.

Younger respondents were also significantly more likely than older ones to say they would require such a high income to be free from money stress. For example, 71% of respondents of 30-somethings claimed that they would need $100, 000 and above and out of the 30-somethings, 33% said they would need $ 200 000 and above.

In addition to satisfying people’s Minimum Essential Security, Edelman also wanted to know how much of riches would suffice. Respondents= Respondents Some 65 percent replied at least $1 million while 19 percent responded at least $5 million. Just 12% of people polled believe they are rich at the moment, down by 2pp from a year earlier.

This is somewhat at odds with the many headlines about how the public feels about the economy.

Inflation, though, has shrunk from a high of 9.1% in June this year to 2.5% last month, within the past few years. Thus far wages have been rising more robustly than inflation, with an average monthly nominal wage increase of roughly 5 % this year. The first long-anticipated interest rate cut today from the Federal Reserve made borrowing money slightly cheaper for consumers while also clearly telegraphing a message to the economy and global investors that the major worry of inflation is in retreat.

However, nobody’s financial stress is fading but rather it increasing, if not stabilizing. That may be due to the overall inflation, or the summation of increases in prices since the advent of the COVID-19 crisis.

“For consumers, 2%, 3%, 4% don’t really mean anything,” Sofia Baig, an economist at Morning Consult, recently reported to Money. “I think what they have been is more of like a 20% hike in price since the pandemic which is quite startling.”

Well, according to Labor Department statistics, consumer prices have risen by almost 22% on average compared to the situation in March 2020. It [inflation] has remained even hotter in the cost of housing, one of the most significant expenses on the average American’s monthly budget which has been experiencing a rate of about 24%.