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The $100,000 Trap: Why Many Americans Can’t Make Ends Meet on a Six-Figure Income
How to Manage Your Money Better in 2023
You might think that earning a six-figure salary would make you rich, or at least comfortable. But the reality is that many people who make $100,000 a year or more are struggling to pay their bills, save for the future, and enjoy a decent quality of life.
What is going on?
The rising cost of living
One of the main reasons why making $100,000 a year is not enough for many Americans is the rising cost of living in many parts of the country. According to data from the Bureau of Labor Statistics, you’d have to earn about $129,000 today to have the same purchasing power that a salary of $100,000 had just a decade ago. That’s because, between 2013 and now, the dollar had average annual inflation of about 2.6%, or a cumulative rate of about 29%.
Some of the biggest expenses that have increased over the years are housing, health care, education, and transportation. For example, the median home price in the US was $374,900 in September 2023, up 15.2% from a year ago. The average monthly rent for a one-bedroom apartment in the US was $1,240 in October 2023, up 10.8% from a year ago. The average annual premium for employer-sponsored health insurance…
