As inflation continues to rise, nearly 40% of Americans say they feel "financially unhealthy."
That's according to a recent survey from Personal Capital, which surveyed 2,000 Americans over 18 and was conducted by The Harris Poll from April 19 to 23.
With prices going up, some 58% of Americans feel that their quality of life is decreasing, and a whopping 69% say their salary is not keeping pace.
So what does it take for Americans to feel good about their finances? Here's a look at the average savings and salary expectations that the survey respondents said they'd need to consider themselves financially healthy.
The average salary Americans need to feel financially healthy went down 13% from six months ago to an average of $107,000 overall.
However, there was a lot of variation between generations. Here's the average salary each generation says they need to feel financially healthy:
- Gen Z: $171,633
- Millennials: $133,758
- Gen X: $112,222
- Baby boomers: $78,317
Interestingly, Gen Zers need the highest salary to feel good financially.
This is partly due to the housing market, says Paul Deer, certified financial planner and vice president of advisory service at Personal Capital. Home ownership now incurs a much higher cost than it used to, so it makes sense that younger generations want to earn more to feel secure enough to keep up with the expenses.
It's also worth noting that financial health is subjective, and will mean different things to different people, depending on their priorities.
Savings expectations moved inversely to salary expectations in response to inflation. The average savings needed to feel financially healthy shot up by 17% to an average of $529,900 overall over the last six months.
Here's the average amount of savings each generation needs to feel financially healthy:
- Gen Z: $105,299
- Millennials: $349,784
- Gen X: $566,975
- Baby boomers: $764,999
"Whereas Gen Z has the highest salary expectations to be financially healthy, they have the lowest savings amount to be financially healthy," Deer says.
The noticeable jump between Gen Z and baby boomers' savings expectations may help explain why the younger generations crave higher salaries: "Lower savings for younger generations basically means you have a stronger need to be able to build a nest egg," says Deer.
Each generation may also have different priorities. Around half of millennial respondents say they'll spend more time planning for a vacation than planning for retirement. They are also the generation least likely to cut back on travel as a whole because of inflation.
In times like these, it is important not to forget to live, Deer says. Everyone should be asking themselves, "Can you do what you want today while also positioning yourself positively for the future?"