The prices of goods and services will continue to weigh on U.S. consumers’ wallets in 2024. Most consumers still say they live paycheck to paycheck. Overall, 62% of consumers lived this way as of January 2024, down from 60% last year. This increase suggests the rising cost of living may be taking its toll on consumer finances — including high-income consumers.
More than one-third of those annually earning more than $200,000 saying they live paycheck to paycheck. While rising housing and food costs impact high-income consumers, other factors — such as nonessential spending, paying expenses for others and drawing on savings due to unexpected expenses — may particularly inform their financial lifestyles. Wages for high earners are more likely to have kept up with inflation, possibly explaining their increase in discretionary spending. Just 18% of overall wage earners say their incomes have kept up with inflation, yet 27% of high earners say so.
These are a few of the findings detailed in this edition of “New Reality Check: The Paycheck-to-Paycheck Report,” a PYMNTS Intelligence exclusive report. This edition, “Why One-Third of High Earners Live Paycheck to Paycheck,” examines the financial lifestyles of U.S. consumers and the factors contributing to their financial status. This edition draws on insights from a survey of 4,285 U.S. consumers conducted from Jan. 9 to Jan. 16 and an analysis of other economic data.
Other key findings from the report include the following:
Sizable portions of high earners live paycheck to paycheck.
The increase in consumers living this financial lifestyle is evident across income brackets. The share of consumers living this financial lifestyle and annually earning more than $100,000 has increased from last January, currently standing at 48%. This share includes 36% of those annually earning more than $200,000. Even though they tend to have higher incomes, millennials are more likely to live paycheck to paycheck, as do urban consumers.
High earners’ budgets are as inflexible as low earners.
Even as housing and food costs rise, more affluent consumers report that essential spending represents a smaller fraction of their budgets than lower-income consumers. Discretionary spending on leisure, personal care and everyday transactions represents close to one-third of higher-income consumers’ available income. Higher incomes may also encourage consumers to engage in newer types of fixed expenses. For instance, those at the upper end of the income distribution are 54% more likely to be paying for education.
High-income, paycheck-to-paycheck consumers are inconsistent savers.
As income grows, the likelihood of saving usually increases. However, many high-income earners do not set aside fixed portions of their incomes. In fact, close to 1 in 5 consumers annually earning more than $100,000 have not saved every month in the last quarter. Adding to that, just 1 in 10 say they are non-savers. High-income earners are the likeliest to say they lack good saving habits. 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. However, even they could benefit from finding ways to budget for essential and nonessential items to better live within their means. Download the report to learn about the financial stressors and spending habits causing high-income consumers to live paycheck to paycheck.
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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.
What percentage of Americans do you think live 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.
Is 62 of Americans living paycheck to paycheck? ›
According to a recent report from LendingClub, a staggering 62% of adults are living paycheck to paycheck. This trend underscores the harsh reality faced by the majority of Americans, where financial insecurity has become a widespread concern.
Why is living paycheck to paycheck such a stressful lifestyle? ›
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.
Does the middle class live paycheck to paycheck? ›
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.
Is the average American struggling financially? ›
According to a recent Ramsey Solutions study, 34% of survey respondents indicated that they were either facing financial struggles or were actively in crisis. That's a huge percentage of people -- more than one-third of all respondents -- who are not feeling good about their personal finances.
Do some millionaires live 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.
What percent of people who make $200,000 live paycheck to paycheck? ›
Making bank doesn't mean you have loot saved in the bank. Roughly 45% of those making more than $100,000 say they live paycheck to paycheck; 47% of those making between $150,000 and $200,000-a-year; and 28% of those making over $200,000, a new report from PYMNTS.com found.
How many Americans can afford a $1000 emergency? ›
Only 44% of Americans can afford a $1,000 emergency expense, says Bankrate.
How many Americans have no savings? ›
As of May 2023, more than 1 in 5 Americans have no emergency savings.
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 much does the average American have in savings? ›
Excluding retirement assets, the average American has $65,100 in savings, according to Northwestern Mutual's 2023 Planning & Progress Study.
Can you live on $1000 a month after bills? ›
Bottom Line. Living on $1,000 per month is a challenge. From the high costs of housing, transportation and food, plus trying to keep your bills to a minimum, it would be difficult for anyone living alone to make this work. But with some creativity, roommates and strategy, you might be able to pull it off.
Does living paycheck to paycheck mean you're poor? ›
Persons living paycheck to paycheck are often referred to as the working poor, but that may not accurately describe the full scope of this phenomenon because it cuts across multiple income levels. The "working poor" have been described as typically having limited skills and being paid low wages.
Do most Americans really live paycheck to paycheck? ›
Living paycheck to paycheck by income
According to a recent PYMNTS report, as of November 2022, 76 percent of U.S. adults who make less than $50,000 are living paycheck to paycheck, compared to 65.9 percent of those making $50,000 to $100,000 and 47.1 percent making more than $100,000.
How many people over 100000 are living 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.
What paycheck is considered rich? ›
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.
