Inflation, job concerns, and already high interest rates are putting the squeeze on many American consumers.

Now, even high earners, defined as people with incomes of $150,000 or more, are showing signs of stress. These borrowers are increasingly having trouble meeting payments on credit cards, auto loans and mortgages.

The delinquency rate among high earners is near a five-year high, rising 130% over the last two years from January 2023 to December 2024, according to a new report by VantageScore, a national credit company, released early to CNBC.  

“We’ve seen significant increases in services cost, like home insurance and auto insurance, and that is hitting the high-income consumer harder than most. That’s what’s driving that delinquency rate,” said VantageScore CEO Silvio Tavares in an interview with CNBC. 

With the cost of insured losses after California wildfires reaching an estimated $40 billion, Tavares says the increase in insurance rates could stress borrowers further.

“The cost of the damage is going to spread across all consumers of those insurance companies across the country,” said Tavares. “It’s going to raise insurance rates, and it’s going to further the delinquencies that we’ve been seeing already in the high income category over the past year.”

Bain’s Consumer Health Index, a data series focusing on high earners, showed a 10.8% drop in their intent to spend, driven by uncertainty around the future performance of the stock market after strong gains over the last two years. 

“We see a worrying signal recently coming from upper-income earners; their intent to spend is down, and that worries us, given their disproportionate share of discretionary spending in the United States,” said Brian Stobie, a senior director at Bain and Company, a global management consulting firm. 

The Bain Index also dipped this time last year and recovered, although not back to the previous levels. Since higher-income earners represent the majority of discretionary spending any weakness could have an outsize impact on the economy.

Millennials have come a long way since their days of being called lazy or entitled. Despite reaching key milestones later than their parents once did, they are now wealthier than previous generations were at their age.

“Younger families in the U.S. made remarkable gains,” according to an analysis of 2022 data by the St. Louis Federal Reserve.

Collectively, millennials are now worth about $15.95 trillion, up from $3.94 trillion five years earlier, according to Federal Reserve data. 

Still, very few millennials would consider themselves wealthy. The disconnect between being rich on paper and feeling well off has been referred to as “phantom wealth.”  

For example, gains in the value of a home or a retirement plan can feel like phantom wealth because they are illiquid and have no bearing on day-to-day cash flow. 

Boosted by a strong jobs market and rising wages, many in this age group have purchased homes and benefited from soaring home values. To that point, the St. Louis Fed report found between 2019 and 2022, home prices jumped 44%.

Largely driven by real estate gains, the “median wealth of these younger people more than quadrupled” during this three-year period, the report said.

However, homeownership does not offer the same sort of safety cushion other investments do, noted Michael Liersch, head of advice and planning at Wells Fargo.

“Unless you are willing to downsize, you are really not going to monetize the increase in that asset,” said Liersch, especially in the case of a primary residence. “Millennials, in particular, haven’t been able to use that wealth.”

Compared to other generations, millennials are also more likely to say their income went up over the last few months and that they expect their earnings potential to increase again in the year ahead, according to another report by TransUnion.

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But even as households became wealthier, inflation and instability have left more people in the bucket of so-called HENRYs — “high earners, not rich yet,” House said.

And “the ‘HENRY’ phenomenon isn’t limited to millennials or Gen Z,” he added.

“It’s harder for every generation to feel financially comfortable when the management of so much risk related to employment, healthcare, retirement pensions, insurance, and other components of economic well-being has been shifted to individuals during a period of rapidly rising prices,” House said.

They have higher student loan balances, bigger mortgages and car payments and more expensive childcare costs, explained Sophia Bera Daigle, CEO and founder of Gen Y Planning, a financial planning firm for millennials.

“Cash flow has been tight,” she said.

That makes it more difficult to set extra money aside or make long-term plans, said Bera Daigle, a certified financial planner and a member of CNBC’s Advisor Council,  “While they are making significant progress on reaching some financial goals, it still feels like there is so much more to achieve.”

However, feeling financially secure is often less about how much money you have and more about the ability to spend less than you make, experts say.

In part, higher prices have fostered the feeling of being overextended, according to CFP Kamila Elliott, co-founder and CEO of Collective Wealth Partners.

Elliott, who is also on CNBC’s FA Council, said clients often ask “Where is my money going?”

“If you feel like a lot of fixed expenses are going up, it may mean you need to cut back on the fun things,” she advised, such as eating out or taking a vacation.

“It’s going to take a little bit of an offset to have more money at the end of the month,” Elliott said.

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It’s official: Tax season is open for individual filers and the IRS has started to process 2024 tax returns.

If you’re expecting a refund, there are key things to know, according to tax experts.

“There are some very simple tips to get the fastest refund possible,” said Mark Steber, chief tax information officer of Jackson Hewitt Tax Services.

For most filers, the federal tax deadline this year is April 15 for returns and balances. The agency expects more than 140 million individual returns before the due date. 

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Typically, you’ll receive a tax refund if you overpaid taxes the previous year. But you could owe money if you didn’t withhold enough from your paycheck or didn’t make payments throughout the year. 

As of Dec. 27, the average refund was $3,138 for the 2024 filing season, which was slightly lower than 2023, according to the IRS.

You can check the refund status of your current-year, electronic filing with the IRS 24 hours after submitting your return.

Paper refund checks are 16 times more likely to have an issue, such as theft or misdirection, according to the U.S. Department of the Treasury’s Bureau of the Fiscal Service.

However, it’s also important to enter banking details correctly when selecting direct deposit for payment, experts say. You should always double-check routing and account numbers.

During fiscal year 2023, more than 90% of individual taxpayers filed electronically, the IRS reported.  

While many taxpayers are itching to file early, it’s important to wait until you have all the necessary tax forms, according to Elizabeth Young, director of tax practice and ethics for the American Institute of Certified Public Accountants.

You want a “complete and accurate tax return,” she said. Otherwise, the IRS could flag your filing for mistakes, which causes delays.

While many tax forms arrive in January, others won’t be ready until mid-February to March or later.

Some common tax return errors include missing or inaccurate Social Security numbers, misspelled names, entering information wrong and math mistakes, according to the IRS.