For years, study after study has shown that many – if not most – Americans live paycheck to paycheck, which means their income and expenses barely add up each month. While there are many titles that promise better personal finance with higher income, it might not be that simple.

Unfortunately, it turns out that money doesn’t necessarily buy financial security. 40% of American workers earning $ 100,000 or more are still struggling to break out of the paycheck cycle, according to a new report.

For people who can manage on a lot less, it may seem odd that $ 100,000 isn’t enough for so many families. But the cost of living in the United States has long exceeded average income growth, even for six-figure people.

Housing costs are rising at a record rate

Housing is a growing source of suffering for many workers – and the same goes for the six-figure set, as they often have to live in expensive metropolitan areas to keep those well-paying jobs.

And it only got worse during the pandemic. According to popular housing platform Realtor.com, the median rent for the 50 largest subways was $ 1,575 in June 2021, an 8.1% increase from the previous year. These are the highest rents on record for 44 of the 50 largest metropolitan areas.

Of course, if you’re stuck in New York or San Francisco, be prepared to split up by nearly double for a modest one bedroom. Rents this high mean you could easily spend half of your net income – or more – just on rent, even if you earn $ 100,000 before taxes. It seems impossible to save for your own mortgage if you can’t leave town.

Everything else is more expensive too

However, housing is only one piece of a very expensive pie. Health care costs have increased six-fold over the past few decades, and it’s not uncommon to spend hundreds a month on insurance despite employer contributions. The cost of food also continues to rise, as do other necessities like electricity and gas.

Then there are all the costs that we didn’t even have to factor in in the past, like internet and cell phone bills. (Try to get by in your high-paying tech job without an updated smartphone so you can be on call even on your days off.)

By the time you’ve paid every bill, even a six-figure salary can seem small. And that’s before you add the ever-increasing cost of trying to raise your children.

Lifestyle drift can also be a problem

All of this doesn’t mean that everyone who makes six figures a year is struggling with just the basics. A number of people living paycheck to paycheck may face simple mismanagement of money – or the effects of a fluctuating lifestyle.

Essentially, lifestyle drift happens when your income goes up, but your (frivolous) spending goes up too. This can often happen so gradually and seemingly harmless that it can be difficult to notice it until it gets out of hand.

For example, a new promotion accompanied by an increase can result in additional savings. But this new promotion can also come with added networking expectations, meaning you spend more time dining out or traveling. Or maybe you need to dress for your new role? updating your wardrobe is rarely cheap.

Even something as innocent as splurging on a new (or even used) car can be a much bigger hit than it would have been a few years ago. According to data from Kelley Blue Book, the average sticker price on a new car hit an all-time high last month, hitting $ 41,263.

Will the remote working revolution be useful?

There are many suggestions for getting out of the paycheck cycle. For workers with incomes of $ 100,000, one of the best solutions might actually be the growing trend towards remote working.

Many well-paying jobs, especially in the tech sector, were among the millions that have disappeared over the past two years. If those jobs remain distant – something workers increasingly demand – then there could be a surge of workers moving from expensive metropolitan areas to more affordable cities.

And this migration could have potential spillover effects. Metro areas could become more affordable as landlords compete for tenants. It could also liven up small towns struggling to stay afloat in a city-centric economy.

Alert: Highest Cash Back Card We’ve Seen Now Has 0% Introductory APR Through Nearly 2023

If you are using the wrong credit or debit card, it could cost you dearly. Our expert loves this first choice, which presents a 0% introductory APR on new purchases and balance transfers until near 2023, an insane cash back rate of up to 5%, and all with no annual fee.

In fact, this card is so good that our expert even uses it personally. Click here to read our full review for free and apply in just 2 minutes.

Read our free review

We strongly believe in the Golden Rule, which is why the editorial opinions are our own and have not been previously reviewed, endorsed or endorsed by the advertisers included. The Ascent does not cover all the offers on the market. Editorial content for The Ascent is separate from editorial content for The Motley Fool and is created by a different team of analysts. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.