Not many Americans feel financially secure and believe they need to make close to $186,000 on average to change that, according to personal finance website Bankrate’s annual Financial Freedom Survey.
The survey found 25% of Americans say they’re secure financially, which is down from 28% in 2023.
“Overwhelmingly, we can see here that Americans just aren’t making the money that they feel like they need to earn to be financially secure, even just to live comfortably,” said Sarah Foster, an analyst at Bankrate.
The magical salary of $186,000 is almost double what the Census Bureau said the average American full-time worker makes, according to Foster. The number, however, is down from the average of $233,000 people said they felt they needed to make during last year’s survey.
Foster believes inflation has impacted the most recent surveys.
“Inflation is slowing, and I think for those average Americans, that might be why they kind of decreased the salary expectations that they feel like they need to make,” Foster said.
The survey also asked people if they believe they will feel financially secure in the future, and while 45% said they do, 30% said they don’t think they will get to that point.
“If you are someone who is delaying retirement, saving less, because you’re trying to find some way to absorb the impact of high inflation, you’re probably feeling that pinch, even when inflation is slowing,” Foster said.
When it comes to who was the most optimistic, Foster said younger generations appear the most hopeful for the future when it comes to their finances.
The survey also set out to find out how much people believe they need to make to feel rich — that number on average was $520,000.
Foster said the magic number for being rich is “more subjective” as the survey found those who make the most — $100,000 or more — felt they needed the most to feel rich — $605,000. Those who made under $50,000 believe a salary of $445,000 would allow them to feel rich.
Foster said it’s important for people to remember how you manage your budget is more important than how much you make.
“What really matters is whether you’re taking steps with your finances to live within your means, to budget, to at least save a little bit for the future,” Foster said.
She said paying down debt on high-interest rate cards can help but doesn’t encourage people to pay down mortgages or student loans instead of contributing to their retirement.
“I think it’s always important to just try to prioritize saving, above all else,” Foster said.
She also said for some, they can take steps to earn more, which includes knowing how to ask for a raise.
“Thinking about the work that you do and how it translates to your company’s bottom line. At that point, it really does become an easier ask when you’re trying to negotiate for a raise,” Foster said.
Bankrate commissioned YouGov to survey 2,407 adults in the U.S. between May 16-20, 2024.
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