Apr 11, 2023
While we adhere to strict editorial guidelines, partners on this page may provide us earnings.
As the global COVID-19 pandemic rages on, another “health” crisis has been plaguing the U.S.
Almost 4 in 10 Americans say they feel “financially unhealthy,” as prices remain high after a year of record-breaking inflation. However, how much you think you need to get financially well may depend more on what year you were born than how much is sitting in your bank account.
Don't miss
- Rich young Americans have lost confidence in the stock market — and are betting on these 3 assets instead. Get in now for strong long-term tailwinds
- 'Hold onto your money': Jeff Bezos says you might want to rethink buying a 'new automobile, refrigerator, or whatever' — here are 3 better recession-proof buys
- You could be the landlord of Walmart, Whole Foods and CVS (and collect fat grocery store-anchored income on a quarterly basis)
Gen Z says they require an average salary of $171,633 to feel financially healthy — the highest income compared to older generations — according to a 2022 survey from personal finance company Personal Capital and retirement plan provider Empower, conducted by The Harris Poll.
Advertisement
But even while Americans remain concerned about the state of their finances, experts say not to lose hope.
“In a choppy market, there are plenty of opportunities to take control of your money,” said Craig Birk, chief investment officer at Personal Capital. “Knowing your net worth puts you in the driver’s seat because you need a real-time measure of your financial health to make smart moves.”
Must Read
- Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — are you doing the same?
- Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how
- Robert Kiyosaki says this 1 asset will surge 400% in a year and begs investors not to miss this ‘explosion’
Join 250,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
How much each generation needs to feel ‘financially healthy’
Here’s how much each generation says they need to earn to feel comfortable:
- Gen Z: $171,633
- Millennials: $133,758
- Gen X: $112,222
- Baby boomers: $78,317
More: How to ask for a raise
However, when it comes to how much savings these generations believe they need stashed away, the numbers drastically differ.
- Gen Z: $105,299
- Millennials: $349,784
- Gen X: $566,975
- Baby boomers: $764,999
Although Gen Z has the highest salary expectations to be financially healthy, they have the lowest expectations when it comes to how much they need in savings — and vice versa for boomers.
Advertisement
Paul Deer, vice president of advisory service at Personal Capital, theorized to CNBC that this might be connected to the housing market. Younger generations may feel they need a higher income to afford expensive mortgage rates and to plan for their retirement.
“Lower savings for younger generations basically means you have a stronger need to be able to build a nest egg,” Deer said.
Deal with the immediate first
Even if you can’t hit the salary mark you need just yet, you still have options when it comes to maximizing your income and bolstering your savings.
“Yeah, making more money is great, but it’s what you do with your earnings that makes the real difference,” says Lacey Cobb, director of advice solutions at Personal Capital.
“Regardless of the number on your paycheck, avoiding high-interest debt and saving a meaningful percentage of your income can put you in a better spot in the long run.”
One of the first steps toward financial wellness is to deal with your debt — especially those with the highest interest rates. Thanks to exorbitant consumer prices, Americans are increasingly relying on their credit cards and household debt is soaring.
Advertisement
But with credit card interest rates spiking to record highs in response to the federal funds rate, now's not the time to let your monthly payments slide. Make sure you’re doing your best to pay them off in full and on time.
More: Compare personal loan rates with Credible for free
Read More: Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it
Then plan for the future
Once you’ve got your debt under control, make sure you’re tucking some savings aside as well. The Personal Capital survey found that 58% of Americans are putting away more into their short-term savings and retirement savings. But if the pandemic taught us anything, it's incredibly important that you’ve got some emergency funds in place for an unexpected expense.
And with many predicting they’ll need $1.25 million in savings to retire comfortably, you’ll want to start preparing for your financial future immediately.
Advertisement
While investor sentiment may be see-sawing right now, Birk advises against panic selling your investments.
More: How to invest your spare change if you're not rich
“Stocks can be a secret weapon because they offer you one of the best chances to mitigate the impact of inflation and, in the long run, you’re well-positioned to beat it several times over.”
Consider building a well-diversified portfolio with sectors that traditionally perform well throughout economic cycles, like consumer staples and utilities.
With a little focus and some hard work, before long you’ll be feeling financially strong again.
You May Also Like
- Turning 50 with $0 saved for retirement? Most people don’t realize they’re actually just entering their prime earning decade. Here are 6 ways to catch up fast
- Inside a $1B real estate fund offering access to thousands of income-producing rental properties — with flexible minimums starting at $10
- Vanguard’s outlook on U.S. stocks is raising alarm bells for retirees. Here’s why and how to protect yourself
- Here are 5 easy ways to own multiple properties like Bezos and Beyoncé. You can start with $10 (and no, you don’t have to manage a single thing)
Serah Louis is a reporter with Moneywise.com. She enjoys tackling topical personal finance issues for young people and women and covering the latest in financial news.
