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Why New Graduates Often End Up in the HENRY Trap

And how to avoid it

Karen Banes
Financial Strategy
Published in
4 min readJan 11, 2025

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If you’re someone who’s on a high income but struggling to build any kind of real wealth (or even a positive net worth), you may well be a HENRY.

The acronym stands for High Earner, Not Rich Yet, and it applies to many young people who live in urban areas, work high-income jobs, and have student debt to deal with.

Research has found that many high earners have very little in terms of savings, and 18% of people earning six figures have no savings at all. While that may seem shocking to those on a lower income, it’s easy to see why many people — especially fairly recent graduates with lots of debt and high outgoings — struggle to save money, even on a generous salary.

Here are some really common reasons some people get stuck in HENRY syndrome for longer than they should.

They Don’t Understand Their Initial Job Offer

If you’ve been living on a next-to-nothing income through four+ years of college, that initial salary sounds like a lot, especially when it’s presented to you, usually in its pre-tax, pre-other-deductions form, along with all the other perks and benefits you now have access to.

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Financial Strategy
Financial Strategy

Published in Financial Strategy

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Karen Banes
Karen Banes

Written by Karen Banes

Freelance writer sharing thoughts on life, society, creativity, and productivity. https://changetheworldwithwords.substack.com

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