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
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%.
What percentage of high earners live 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.
What percentage of people live paycheck to paycheck Dave Ramsey? ›
78% of Americans are living paycheck to paycheck. Basically, that means almost 8 out of 10 people probably can't afford the home they're living in and the car they're driving. They might not even have the cash to cover the next emergency that pops up. Your income is your most important wealth-building tool.
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.
What salary is considered very 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.
Does the middle class 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 making 100k 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. In other words, higher incomes do not necessarily protect people from the financial stress that comes from living from one paycheck to the next.
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.
What percentage of middle class Americans 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. In other words, more than three-quarters of Americans struggle to save or invest after paying for their monthly expenses.
What is the 75 15 10 rule? ›
In his free webinar last week, Market Briefs CEO Jaspreet Singh alerted me to a variation: the popular 75-15-10 rule. Singh called it leading your money. This iteration calls for you to put 75% of after-tax income to daily expenses, 15% to investing and 10% to savings.
The rule is to split your after-tax income into three categories of spending: 50% on needs, 30% on wants, and 20% on savings. 1. This intuitive and straightforward rule can help you draw up a reasonable budget that you can stick to over time in order to meet your financial goals.
Is living paycheck to paycheck 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.
Can you live off $1000 a month after bills? ›
But it is possible to live well even on a small amount of money. Surviving on $1,000 a month requires careful budgeting, prioritizing essential expenses, and finding ways to save money. Cutting down on housing costs by sharing living spaces or finding affordable options is crucial.
How many Americans have no savings? ›
As of May 2023, more than 1 in 5 Americans have no emergency savings.
Why are so many Americans struggling financially? ›
Inflation, lack of savings and credit card debt
In 2023, the average credit card interest rate hit a historic high of 22.8%, according to the Consumer Financial Protection Bureau, and individual credit card holders had an average debt of $6,501 each, according to Experian.
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 people over 100000 are living 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.
Is 200k a good salary for a single person? ›
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.
