The good news is the U.S. economy added more than 300,000 jobs last month and many U.S. workers are now earninghigher wages.
The not-so-great news is many Americans continue to struggle to pay their bills — including even those earning six figures each year.
According to PYMNTS Intelligence’s latest edition of its “Paycheck-to-Paycheck Report: Why One-Third of High Earners Live Paycheck to Paycheck,” six in 10 consumers struggle to get by. And high wages alone don’t necessarily offer relief. Nearly half of consumers earning north of $100,000 annually say they are living paycheck to paycheck.
The report drew on insights that 4,285 U.S. consumers shared with us, as well as supplementary economic data. It found that 62% of all consumers now live paycheck to paycheck, including 36% of those whose annual incomes exceed $200,000.
PYMNTS Intelligence has tracked paycheck-to-paycheck data for nearly four years. The latest findings show that, overall, the percentage of consumers identifying as living paycheck to paycheck has increased 2 percentage points over last year’s findings.
According to the most recent data, roughly three-quarters of low-income consumers (those earning less than $50,000 per year) — and about two-thirds of middle-income consumers (earning between $50,000 and $100,000 annually) now live paycheck to paycheck. The share of high-income respondents (earning more than $100,000 each year) also increased to 48%. As mentioned, more than one-third of those who earn $200,000 or more annually said they, too, are just getting by.
Consumers across income brackets say housing costs (29%), grocery and household expenses (20%) and regular and personal outlays (21%) absorb the lion’s share of their monthly earnings.
And even though the costs of items such as housing and food continue to climb, those outlays alone do now account for the financial difficulties many American consumers now feel.
As the chart above shows, both low-income earners and those making more than $200,000 annually said insufficient earnings are the main reason they survive from one paycheck to the next. Forty percent of those earning less than $50,000 annually say low wages are to blame. And while one-quarter of middle income earners and 16% of high-income earners say the same, around one in five consumers earning more than $200,000 blame insufficient incomes for their just-getting-by economic status.
Large amounts of debt are another leading culprit, especially for high-income earners (28%) and middle income earners (26%). Nearly 23% of those earning more than $200,000 each year said covering the expenses family members run is another leading contributor to their plights, which is something they have in common with 18% of those one bracket down.
And while medical bills are cited as a leading reason for crushing U.S. debt, our survey found among paycheck-to-paycheck consumers — across all incomes — it accounted for only a small percentage of their financial woes.
As welcome as the news is that more workers are employed and many of them are now earning higher wages, no more than 5% of consumers of any wage bracket indicated unstable employment was a top reason for them living paycheck to paycheck. And, as the report found, many consumers — especially high earners — are making poor choices that contribute to shaky financial standings.
Yet, there is no denying that if the cost of essentials such as housing and groceries continue to rise every month, the financial plight many Americans face will likely continue for the foreseeable future.
FAQs
One possible explanation is that they may have less incentive to save than the average consumer as they are more confident about their job prospects and are less likely to switch jobs. As inflationary pressures have subsided from their July 2022 peak, high-income consumers have rapidly increased discretionary spending.
Are 65% of Americans living paycheck to paycheck? ›
A majority, 65%, say they live paycheck to paycheck, according to CNBC and SurveyMonkey's recent Your Money International Financial Security Survey, which polled 498 U.S. adults. That's a slight increase from last year's results, which found that 58% of Americans considered themselves to be living paycheck to paycheck.
What are impacts of living paycheck to paycheck? ›
One missed paycheck would put someone living paycheck to paycheck in a difficult spot. When you're living paycheck to paycheck, it's difficult or impossible to save, let alone invest. This makes you even more vulnerable in times of emergency or lost income.
What qualifies as living paycheck to paycheck? ›
Those living paycheck to paycheck devote their salaries predominantly to expenses. The phrase may also mean living with limited or no savings and refer to people who are at greater financial risk if they were suddenly unemployed or faced another financial emergency.
What percent of people who make $100,000 live paycheck to paycheck? ›
According to PYMNTS Intelligence, 62% of U.S. consumers now live paycheck to paycheck, and that includes 48% of consumers earning more than $100,000 annually.
How many Americans can afford a $1000 emergency? ›
According to the newest survey, only 44% of U.S. adults say they would pay an emergency expense of $1,000 or more from their savings.
Are 64% of Americans living paycheck to paycheck? ›
64.4% of Americans live paycheck to paycheck, and 23.8% have issues paying their bills. If you're living paycheck to paycheck, keep track of every dollar you spend and look for ways to reduce your monthly spending. Saving money regularly will help you build new financial habits.
Do Millennials live paycheck to paycheck? ›
Millennials are the generation most likely to live paycheck to paycheck, with 73% doing so this year and last, but a growing share of Generation Z are struggling financially.
What is the 20/30 rule? ›
Key Takeaways. The 50/30/20 budget rule states that you should spend up to 50% of your after-tax income on needs and obligations that you must have or must do. The remaining half should be split between savings and debt repayment (20%) and everything else that you might want (30%).
How many Americans have no savings? ›
As of May 2023, more than 1 in 5 Americans have no emergency savings. Nearly one in three (30 percent) people in 2023 had some emergency savings, but not enough to cover three months of expenses. This is up from 27 percent of people in 2022. Note: Not all percentages total 100 due to rounding.
Only 18% of individual Americans make more than $100,000 a year, according to 2023 data from careers website Zippia. About 34% of U.S. households earn more than $100,000 a year, according to Zippia.
How many Americans are struggling financially? ›
A third of American adults in Northwestern Mutual's 2024 Planning & Progress survey said they don't feel financially secure. That's up from 27% in 2023 and the highest measure going back to 2012.
How can I save $5000 fast? ›
Here are eight ways to save $5,000 in a year with small, manageable steps.
- “Chunk” Your Savings. ...
- Automate Your Savings. ...
- Save in a High-Yield Saving Account. ...
- Track Your Cash Flow. ...
- Boost Your Earnings. ...
- Declutter for Cash. ...
- Evaluate Your Subscriptions. ...
- Challenge Yourself.
Even though household net worth is on the rise in America (at $156 trillion at the end of 2023)—so is debt. The total personal debt in the U.S. is at an all-time high of $17.5 trillion. The average American debt (per U.S. adult) is $66,772, and 77% of American households have at least some type of debt.
Why do most Americans live paycheck to paycheck? ›
More than half of Americans earning over $100,000 a year live paycheck to paycheck. So what's going on? Many experts point to a phenomenon called lifestyle inflation as one of the culprits. Lifestyle inflation, or lifestyle creep, is the pattern of spending a little more as a person's income increases.
What percent of people who make $200,000 live paycheck to paycheck? ›
It found that 62% of all consumers now live paycheck to paycheck, including 36% of those whose annual incomes exceed $200,000. PYMNTS Intelligence has tracked paycheck-to-paycheck data for nearly four years.
Are more people living paycheck to paycheck now? ›
The rate of Americans who are living paycheck to paycheck is on the rise, up 2 percentage points from a year earlier, the analysis found. Inflation is partly to blame, with consumers still grappling with higher prices — although prices have cooled since hitting a 40-year high of 9.1% in June 2022.
What percentage of Americans make over $150,000 per year? ›
Income Brackets in the United States
| Income Bracket* | Percentage of Americans |
|---|
| $75,000-$99,999 | 12.3% |
| $100,000-$149,999 | 16.4% |
| $150,000-$199,999 | 9.2% |
| Over $200,000 | 11.9% |
5 more rowsApr 12, 2024
You'll need to earn more than half a million annually to be considered among the highest earning residents in 11 states and Washington, D.C.
