I make $100K a year; but how come life is still so hard? Here’s why a six-figure salary may no longer be enough for the American dream — plus 3 simple ways to make it work regardless

On paper, it looks like you’ve made it. You’ve hit that six-figure dream. But these days it may not be enough.

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The old benchmark $100,000 salary that put baby boomers into the category of “rich” is coming up short, according to a recent survey by PYMNTS. The survey found that about 70% of millennials are still living paycheck to paycheck, while the median salary remains at about $70,000 for Americans.

Moreover, millennials are now the largest generation to find this struggle is an everyday challenge, with 33% finding it difficult to pay their bills.

Here’s why the American dream feels more like a reverie for younger generations — and what you can do to claw back some of your buying power without having to negotiate for a raise.

Unlike their parents

Both Gen Z and millennials grew up with baby boomer parents who most likely had it all going for them: the car, the family, the house and the salary that allowed them to live a stable and affordable lifestyle.

In 1980, American families had a median income at $75,672 in today’s currency, according to the U.S. Census Bureau. Three decades on, that average has actually dropped to about $70,784 as of 2021.

That means, not only are millennials and Gen Z paid less than their parents (on a constant currency basis), but due to sky-high inflation, their salaries no longer stretch as far.

And then consider the student debt many young people are already carrying when they’re only just starting their careers. While millennials and Gen Z may be the most educated generations yet, that pricey degree doesn’t pay the same dividends when everyone you’re competing for jobs with has one too.

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Even if they manage to climb the corporate ladder and lock down a fair salary, younger generations are also beleaguered by rising child care expenses and home prices.

So what are we to do? Amidst inflation, rising interest rates, and static salaries, here’s how you can make that salary work for you.

Make a budget

The first thing every home needs is a budget. Then, you need to stick to that budget.

Maybe you count yourself among the 85% of savvy spenders who told Debt.com they use a budget. But with rising costs, if you haven’t updated it lately, it’s likely your budget needs an overhaul.

Start off by tallying your essential monthly expenses like your mortgage or rent, insurance, food and utilities. Then, compare what you have left over in your budget with what you actually spend. If you need to trim some fat, break up your expenses into two categories: must have like coffee and nice to have like alcohol (or maybe that’s coffee for you personally.)

Part of your budget should also include putting cash aside to pay down debt. If you’re paying interest on credit cards or student loans, that’s cash being thrown away. So the sooner you pay it down, the better.

Read more: Here’s how much money the average middle-class American household makes — how do you stack up?

Learn to save on fun

A little bit of research also goes a long way when it comes to saving on purchases.

And it doesn’t have to be a pain — there are so many apps out there that can help you save money by browsing around for deals. Think renting a home instead of a hotel room. Or maybe a cheap airline ticket when you need to travel.

And these days, there are sites and apps that can help you find coupons for event tickets, salons looking for new clients or even a whole closet of high-end secondhand clothes.

Take the time to shop around before making a big purchase and you’ll often find you can find a way better deal.

Use your credit card (wisely)

If you’re looking for a quick way to get something back from the purchases you do need to make, you might want to consider getting a new credit card.

You can usually find a special offer on a rewards card — complete with no fees for the first year, and perhaps even offer a bonus of credit card rewards. And those rewards can then be used to either help pay off your credit card, buy products you need, or save towards flights.

Every time you swipe or tap your card — whether at the grocery store or gas station — you’ll accumulate points you can use to help fund all your discretionary purchases. Before too long, maybe you’ll have a little extra breathing room in your budget. That’s a win-win.

Just remember, paying off your credit card down to zero should always be your priority. And opening and closing credit accounts often can impact your credit score, so you’ll want to be intentional and strategic about this.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.