Ever heard of a HENRY? You may be one

Ever heard of a HENRY? You may be one

What you probably already know: Step aside Yuppies and DINKs. There’s a new acronym to describe high middle class earners, HENRYs. That stands for high earner, not rich yet. The Wall Street Journal took at a look at what has emerged as a new class of Americans. People who make well into the six figures, but don’t feel like they have enough to live the lifestyle they thought they would when they hit that salary level.

Why? About 14.4% of U.S. households now make more than $200,000 and, while they’re not looking for sympathy as they drive around the city in their Lexus SUVs, the group profiled in the piece does want people to understand that the cost of living is now so high that even when your family income exceeds $300,000, it’s not a guarantee of a luxurious lifestyle. One woman was still paying off $90,000 in school loans while others are paying $30,000 for daycare and private schools for their kids. This population is increasingly putting their children in private schools after many were frustrated by the way the public schools handled the pandemic.

What it means: The definition of a HENRY, according to the article, is that these families feel a gap between what they have and what they think they need to truly be comfortable. The reality is that the cost of living has gone up so much that Americans simply don’t feel rich even when, on paper, they are. Part of this is that many Millennials paid for expensive colleges and then delayed buying houses. Now, as they have growing families, they’re seeking to buy homes and finding that to be an extremely expensive proposition, with a three-bedroom house in California running an average of $718,000, and still well above $500,000 in other popular states like Massachusetts and Washington state.

What happens now? This same population tends to take more expensive trips and buy second homes, according to a financial adviser quoted in the story, and aren’t saving as much as many would expect them to. Meanwhile, it now costs about $50,000 to buy a new car, and there’s definitely a “keeping up the Joneses” effect, particularly as many are watching their peers and colleagues’ posts on social media.