With inflation driving up costs everywhere, consumers in all income brackets — including those who make more than $250,000 annually — live paycheck to paycheck. PYMNTS’ research finds that 61% of U.S. consumers lived paycheck to paycheck in April 2022, a nine percentage-point increase from 52% in April 2021.This increase means approximately three in five U.S. consumers devote nearly all their salaries to expenses with little to nothing left over at the end of the month.
Our data also reveals that slightly more than one in three consumers annually earning $250,000 or more currently live paycheck to paycheck. These top-earning consumers handle their financial lifestyles in interesting ways, however, as they are associated with stronger credit scores and more intense credit usage and are likely to moderate their cash flows. Those earning more than $250,000 are 40% more likely to use financial products than consumers in the lowest bracket, and as many as 63% of them have an above-average credit score exceeding 750 points.
These are just some of the findings to emerge from this edition of New Reality Check: The Paycheck-To-Paycheck Report, a PYMNTS and LendingClub collaboration. The High Earners Edition examines the financial lifestyle of the growing share of high-income U.S consumers who live paycheck to paycheck and the impact on their ability to access credit and other expense management.The series draws on insights from a survey of 4,048 U.S. consumers conducted from April 6 to April 13, as well as an analysis of other economic data.
More key findings from the study include:
• Close to two-thirds of the U.S. population — approximately 157 million adults — currently live paycheck to paycheck, making it the main financial lifestyle in the U.S. Though lower incomes generally correlate with financial distress, 36% of consumers who annually earn $250,000 or more live paycheck to paycheck. Our data finds that, in April 2022, 36% of consumers earning $100,000 to $150,000, 31% earning $150,000 to $200,000, 26% earning $200,000 to $250,000 and 24% earning more than $250,000 were living paycheck to paycheck without issues paying their bills. Between 10% and 12% of consumers in these higher-income brackets lived paycheck to paycheck with issues paying their bills in April 2022.
• Credit scores strongly correlate with income, yet one-third of those earning more than $250,000 report average or below-average credit scores. PYMNTS’ research finds that consumers’ average credit scores tend to increase by income: 63% of those earning more than $250,000 a year report having an above-average credit score. The average credit score for these respondents is 758.Yet, our data also finds that 18% of consumers earning more than $250,000 a year report having an average credit score, while 13% report having a below-average credit score.
• Consumers earning more than $250,000 are 40% more likely to engage with financial products than consumers in the lowest income bracket. Credit products are a cash flow management tool for paycheck-to-paycheck consumers, especially those in higher income brackets. Approximately three-quarters of consumers earning more than $100,000 have made a credit card payment in the past three months, with those earning between $200,000 and $250,000 the most likely to do so. Higher-income consumers also have made a personal loan payment at an above-average rate of 14%.
To learn more about how paycheck-to-paycheck consumers in the top income brackets are faring in today’s changing economic times, download the report.
See More In: consumer finance, credit cards, credit scores, Finance, LendingClub, Main Feature, New Reality Check: The Paycheck-To-Paycheck Report, News, paycheck-to-paycheck, PYMNTS Study, revolving debt
FAQs
The expression, “living paycheck to paycheck,” generally refers to having little or no money for savings left over from your paycheck after covering your regular expenses. You might be unable to pay your bills if you suddenly become unemployed or don't receive the next paycheck.
What percent of consumers live paycheck to paycheck? ›
How Many Americans are Living Paycheck to Paycheck? Recent MarketWatch Guides survey results indicate that 66.2% of Americans feel like they're living paycheck to paycheck. Respondents struggling to make ends meet span demographics, including genders, generations and incomes.
How did I stop living paycheck to paycheck and saved my first $1000? ›
7 Steps to Stop Living Paycheck to Paycheck
- Start by Creating a Budget. If you don't already have a budget, now is the perfect time to create one! ...
- Cut Expenses and Increase Income. ...
- Build an Emergency Fund. ...
- Stop Accruing Debt. ...
- Open a High-Yield Savings Account. ...
- Join a Credit Union. ...
- Use Free Financial Wellness Resources.
In fact the typical family making >$250,000 has 3 months of income saved in cash, also near a record high. And yes, that threshold is inflation-adjusted. JUST IN: More than a third of Americans earning at least $250,000 annually say they are living paycheck to paycheck, per Bloomberg.
What is a live check paycheck? ›
A live check is a paper paycheck for an employee. In Toast Payroll, if you force a live check, this will override a direct deposit for the employee and issue them a paper check instead. Whether you force a live check for one or all employees, this only applies to the current payroll.
Why do you not want to live paycheck to paycheck? ›
Living paycheck to paycheck is not just frustrating today, it impacts your future. Trying to cover bills when the cash runs out at the end of the month is a hardship Americans across the country face.
Do some millionaires live paycheck to paycheck? ›
Even Americans earning six figures say they are living paycheck to paycheck—including people making over $200,000. Under inflation, even the wealthy report financial strain. Money, money, money, isn't even funny in a rich man's world.
Do most Americans really live paycheck to paycheck? ›
How Many Americans Are Living Paycheck to Paycheck? A 2023 survey conducted by Payroll.org highlighted that 78% of Americans live paycheck to paycheck, a 6% increase from the previous year.
What percent of people who make $200,000 live paycheck to paycheck? ›
While you might expect wealthy Americans to weather the cost of living crisis better than most, data shows a staggering 36% of American consumers earning $200,000 or more say they're living paycheck to paycheck.
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 To Live on $1,000 Per Month
- Review Your Current Spending. ...
- Minimize Housing Costs. ...
- Don't Drive a Car. ...
- Meal Plan on the Cheap. ...
- Avoid Subscriptions at All Costs. ...
- Negotiate Your Bills. ...
- Take Advantage of Government Programs. ...
- Side Hustle for More Income.
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 dedicate 20% to savings, leaving 30% to be spent on things you want but don't necessarily need.
What is the minimum salary to live comfortably in USA? ›
Key Findings. On average, an individual needs $96,500 for sustainable comfort in a major U.S. city. This includes being able to pay off debt and invest for the future.
What is a livable wage in us? ›
A living wage is a socially acceptable level of income that provides adequate coverage for basic necessities such as food, shelter, child services, and healthcare. The living wage standard allows for no more than 30% of income to be spent on rent or a mortgage and is sufficiently higher than the poverty level.
What percent of Americans make more than $250k? ›
For the fortunate 7% of American households earning $250,000 per year, here are the top 10 cities where that money goes the furthest.
How do you survive living paycheck to paycheck? ›
- Take care of your Four Walls first.
- Cut extra expenses.
- Start an emergency fund.
- Ditch debt.
- Increase your income.
- Live below your means.
- Save up for big purchases.
- Remember your why.
You're not alone. A majority of Americans (59 percent) report that they live paycheck to paycheck. Stressing about finances can go far beyond the wallet. It can seep into every aspect of your life and manifest itself as generalized anxiety, guilt, panic attacks, or trouble sleeping at night.
Why do so many adults live paycheck to paycheck? ›
Few workers are feeling satisfied with their pay
One reason many workers might feel like they're living paycheck to paycheck: About 1 in 4 (or 24 percent) feel that they are not compensated fairly for their work, while 19 percent feel underpaid compared to their peers with the same work experience and qualifications.
This increase means approximately three in five U.S. consumers devote nearly all their salaries to expenses with little to nothing left over at the end of the month.
The series draws on insights from a survey of 4,048 U.S. consumers conducted from April 6 to April 13, as well as an analysis of other economic data.
Yet, our data also finds that 18% of consumers earning more than $250,000 a year report having an average credit score, while 13% report having a below-average credit score.