The views presented here do not necessarily represent those of Advisor Perspectives.
In the current economic climate, many high earners are living paycheck to paycheck and generally wrestling with anxieties about their financial security. However, there are ways financial planners can help calm clients’ fears and create a “cushion” in times of uncertainty.
“What I’m seeing across my client base, as well as my colleagues I collaborate with, is that so-called HENRYs (High Earners, Not Rich Yet) are more dependent on their income to build wealth and have the lifestyle they want,” said Autumn Knutson, founder and lead financial planner of Styled Wealth.
“When the job market is tougher — or even perceived as tougher — we will set up more cash reserves. We’ll have more of a cushion where we may be putting more money in CDs (Certificate of Deposit accounts) or even brokerage accounts that are not retirement accounts. This is so they do have the flexibility, if they need the money, to access it without penalty,” Knutson said.
“I have a lot of clients in Washington D.C., and that’s what I would say is most underscored. There’s just so much change happening, that they want to keep their eyes open and have more options to keep their finances balanced,” she said.
Knutson explained that some of her clients are reacting, not only to federal job cuts occurring under the Trump administration, but the shuffling of people into different roles.
“It’s job cuts and also shifts. So even if jobs remain equal in number, there are a lot of shifts in who is in those roles,” she said. “Even things as simple as my clients who are building families — if they have to change health care plans mid-year, then their deductible resets. That’s one small example of so many layers of financial implications to plan around,” for today’s high earners, said Knutson.
High Earners, High Debt
Research suggests that more than half of high earners (defined, in this case, as those with annual salaries exceeding $300,000) struggle with credit card debt. A 2024 survey by BHG Financial showed that 62% of higher earners were burdened by credit debt, due in part to “lifestyle creep” and increased financial obligations.
Bank of America research from 2024 also found that around 20% of households bringing in more than $150,000 a year were living paycheck to paycheck.
“One reason is that higher-income households may have bought larger, more expensive, homes and consequently have bigger mortgages,” the bank’s report said. “And often, along with bigger homes, come bigger insurance costs, property taxes and utility bills. It is also possible that as household incomes rise, some households may have more varied sources of income that are hard to capture – such as cash from sales of equities paid into brokerage accounts,” the report said.
Knutson shared that often, “people don’t understand their norms aren’t necessarily necessities,” a challenge that exists across income levels.
“I am noticing the crunch on the ability to make ends meet among those who are earning sub $100,000 annually in general, or under $150,000 in coastal areas or cities,” Knutson said. “That’s [a lot of] people who are often feeling that pinch.”
“Their housing may be a high proportion of their income. But a lot of it goes back to choices and the ecosystem they live in socially,” which influences their spending, she added.
BHG’s report highlighted that the psychological aspects of spending were also paramount to understanding high earners’ finances.
“Even for high-income earners, spending habits are often driven by more than just financial ability—they're influenced by emotions, social pressures, and psychological triggers,” the report said. “These factors can lead to overspending, making it harder to build long-term wealth despite a substantial income.”
Helping the HENRY Crowd
For advisors wanting to help HENRY clients (which Knutson sees as typically younger individuals making at least $150,000 to $250,000 in household income annually), they’ll need a detailed picture of each person’s (or family’s) financial profile.
“We talk a lot about financials,” Knutson said. “I hear a lot from advisors (questioning) how we capture the next generation of clients. I think it’s important to flip the question to, how are we positioned to be attractive to HENRYs and the children of our clients?” she said.
“Regarding HENRYs, do you know what they are going through?” Knutson said. “They are in different life stages than a retiree. They need you to be knowledgeable about the complexities of student loans, or maybe understanding healthcare needs for IVF or changing family plans,” she said.
“Can you meet these needs as a firm, and do you want to meet them? There is a sensitivity to AUM that many millennials have. Do we want to be the people to support them with these pain points? Advisors need to make sure they can meet these clients’ needs “and competently care for them,” Knutson shared.
Danielle Walker is a freelance journalist with 15 years of business reporting experience. She previously worked at Business Insider and Pensions & Investments, among other business publications. Her work has been published in the Financial Times, Barron’s and Chief Investment Officer. Danielle is currently based in Norfolk, Virginia.
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The views presented here do not necessarily represent those of Advisor Perspectives.
