More Americans say they are living paycheck to paycheck this year than in 2023—here's why (2024)

FAQs

Why do most Americans live paycheck to paycheck? ›

Respondents to our 2023 survey cited high monthly expenses—including rent or mortgage, insurance, utilities and more—as the primary cause of living paycheck to paycheck. Yet examining the data by generation highlights some age-related patterns.

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.

Most Americans Are Still Struggling Post COVID-19

Contrarily, the wealthiest 20% of households still maintain cash savings at approximately 8% above pre-pandemic levels. Ultimately, with inflation taken into account, the majority of Americans are worse off financially compared with before the start of the pandemic.

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.

Professor Alex Bryson of UCL — a leading expert in employment studies — suggests that the top quarter of US workers are able to take more advantage of market-set wages. “Workers have high bargaining power because of their skill set — and incentive-based pay is much more common,” he says.

Key Findings. 48.6% of Americans consider themselves to be “broke,” and 66.2% feel they are “living paycheck to paycheck.”

By definition, a millionaire is someone who has at least $1 million in assets. Someone who lives paycheck to paycheck has no savings or assets because they spend their entire paycheck by the time the next one arrives. So the answer to your specific question is no. A millionaire does not live paycheck to paycheck.

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.

If you had an income of $200,000, that would put you in the top 12% of household incomes or the top 5% of individual incomes in 2022. Though I prefer household income over individual income, no matter how you cut it, $200k a year puts you on the higher end of the income spectrum.

After inflation, high interest rates, unattainable housing prices and other economic factors, 50 percent of U.S. adults say their overall personal financial situation is worse than it was in November 2020, according to October 2023 Bankrate polling.

Are Americans struggling financially in 2024? ›

Feelings of financial insecurity among Americans have reached their highest point in at least a decade. 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.

The average debt an American owes is $104,215 across mortgage loans, home equity lines of credit, auto loans, credit card debt, student loan debt, and other debts like personal loans. Data from Experian breaks down the average debt a consumer holds based on type, age, credit score, and state.

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.

Do not subtract other amounts that may be withheld or automatically deducted, like health insurance or retirement contributions. Those will become part of your budget. The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings.

Feasibility aside, living off the interest of your savings is a bad plan for two big reasons. First, inflation will likely depress the purchasing power of your income. So the $60,000 you think you'll need in 30 years will actually be worth $28,600 in today's dollars, assuming a 2.5% rate of inflation.

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.

Living paycheck-to-paycheck can be very draining and inadvertently affect everyone in your household. While you may be paying your bills on time and covering all your monthly costs, one unexpected expense can cause the house of cards to come crashing down.