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5 Risks that a HENRY Should Be Aware Off

Posted by Devayani Bapat

March 7, 2024

Falling for the HENRY life? We’re here to protect you from that toxic financial relationship.

Who is HENRY?

Remember ‘The Girl in the Green Scarf,’ the infamous article from Confessions of a Shopaholic, where the film’s protagonist, Rebecca Bloomwood, talks about her dysfunctional relationship with money and living beyond her means. It showcases how she’s ready to go to any lengths to get her hands on the green scarf, even if that means accumulating debt on nine different credit cards. While HENRYs aren’t quite the same cos they’ve got their bank accounts ringing, we couldn’t help but see the resemblance.

High earners, not yet rich, those guys we lovingly called HENRY, make up for a significant chunk of today’s youth. These working professionals earn about $ 300K-500K annually and still live paycheck-to-paycheck due to their indulgent choices. Let us sketch a rough outline of their life when they’re younger vs. when they’re older to give you a better idea of what being a HENRY means.

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Young, wild, and free: A Day in the Life of HENRY, 20s edition

It’s 5 am. Your alarm goes off. You’re snug in your 1000-thread Egyptian cotton sheets, but you’ve got to head to the gym. You quickly look in the mirror as you head for a hot shower in your 30th-floor, high-rise, porcelain bathroom. You did it, HENRY. You’ve nabbed that high-profile finance job, got the swankiest car on the market, your apartment looks straight out of a YouTube episode of AD Visits, and your bank account is lush. Your life’s mantra: Live in the moment.

Struggling to save, spend and survive: A Day in the life of HENRY, 40s edition

It’s 5 am. Your phone’s been buzzing all night with messages from the bank. You need to send them the owed money. You’re now in your one-bed, 2nd-floor rented apartment. You roll out of your bed, covered in Target sheets. You head into your bathroom for a shower and glimpse yourself in the mirror. Your face is now covered with stress lines, eyes puffy from sleepless nights filled with worry. The only thought in your head: I fell into the HENRY trap, and here I am 3 decades later with no savings, a whole lot of debt, and no assets to my name.

The examples above help us to highlight the three most prominent traits of a HENRY:

  • They’re spendthrifts
  • They have substantially higher incomes than the average population
  • They have limited to non-existent savings

In the 20s, the HENRY life is excellent when one lives carefree, with no responsibilities. However, as you grow older and your family grows, needs change, and priorities shift, the HENRY lifestyle creep becomes risky.

Here are some risks associated with being a HENRY and how we think you can combat them:

Risk: You’re going to end up with no savings

How to avoid it: Pay yourself first.

Have you heard of this concept of paying yourself first? It’s a great way to combat the HENRY life. When you get your paycheck, rather than saving at the end of every month, it means setting aside a small or significant amount of money, depending on what you can shell out, as savings. This attitude helps you learn to prioritize saving over spending on unnecessary luxury items. While it’s okay to indulge yourself for all the hard work you do, a save-first mentality is essential to make sure you aren’t left resenting your younger decisions when you’re older.

Risk: You’re going to end up with no investments

How to avoid it: Start young

The most common risk of being a HENRY is lifestyle creep syndrome, which transcends into the fact that these individuals earn their money only to blow it up on lavish commodities. The best way to combat this is to start saving while young. Make sure that even if it’s just a tiny amount of money from your monthly salary, you keep it aside for a rainy day. As you grow and your paychecks increase, you can improve your savings. Change your attitude to one where your money starts making money for you. Invest in mutual funds, stocks, or assets to ensure you aren’t left destitute as the years pass.

Risk: Clueless about financial wealth and how to balance your expenditure versus savings

How to avoid it: Get help from a financial advisor

Unlock financial success by teaming up with a seasoned financial advisor! A financial advisor can provide personalized investment strategies, retirement plans, and clever tactics to slash your tax bill. It’s like having a financial manager by your side to make your money work harder for you. If you’re struggling with wealth management, reach out for help and outsource your financial stress to an expert advisor to make your tomorrow prosperous.

Talk to us about how Escalon’s FinOps can help you gain financial insights to make informed decisions.

Risk: You don’t know how to strike a balance

How to avoid it: Draw up a budget.

Track your monthly expenses and segregate them into categories to remove any sneaky spending that creeps into your wallet. A common practice is to follow the 50/30/20 rule, where you use 50% of your earnings for your monthly needs, 30% for recreation, and 20% for saving up for your big dreams.

Risk: You can accumulate a lot of debt

How to avoid it: Plan ahead

Make sure you’re keeping an eye out on your credit reports and line up all your debt payments first. Check balances, minimum payments, and those pesky interest rates. After you’ve evaluated your situation, take a call on the best strategy for you to repay all your loans. This will help you achieve financial stability and freedom.

While being a HENRY does not mean living a hand-to-mouth existence, it does not mean your financial wealth is flourishing. The first step is realization. Realizing you’re turning into HENRY, accepting that this is the reality, and finally taking charge of your money will help you avoid the downfall in your later years. The best part is that there is always time to start.

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Want to know more? In addition to HR, benefits, recruiting, and payroll through its PeopleOps, Escalon’s Essential Business Services include FinOps (CFO services, taxes, bookkeeping, and accounting) and Risk (business insurance). Talk to an expert today.


Devayani Bapat
Devayani Bapat

With 6 years of experience in copywriting and social media management across genres, Devayani's heart lies with weaving words into stories and visuals into carefully crafted narratives that’ll keep you wanting more. She carries with her, her pocket notebook, a trusted confidante that goes with her wherever she goes, and scribbles down into it anecdotes on the go. Her secret weapon for keeping all things copy interesting! Apart from writing, Devayani is huge on travelling. You'll find her booking her next adventure while she's on her current one. And while on those adventures, you'll find her devouring true crime books one after the other. Whether it's a low down on a recent case or one that occurred 70 years ago, she can cook up a story narration you'll never forget.

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