Many Americans enjoy the advantages of secure jobs and ample savings, but millions of others lack the funds to cover everyday expenses or emergencies. Seventy-five percent of Americans say they are not completely financially secure, and 30 percent never expect to be, according to Bankrate’s Financial Freedom Survey.
More than 1 in 3 workers (34 percent) are living paycheck to paycheck, according to Bankrate’s new Living Paycheck to Paycheck Survey. That means that about a third of American workers say they don’t have enough money left over after covering their expenses to save for future expenses.
For Americans, it likely feels akin to walking a tightrope with no safety net, where the balance between expenses and earnings becomes a delicate dance.
— Sarah Foster, Bankrate Economic Analyst
Key insights on living paycheck to paycheck
- More than 1 in 3 workers (34 percent) say they are living paycheck to paycheck. That means they have little to no money left over for savings after covering their monthly expenses.
- Nearly 6 in 10 Americans (59 percent) are uncomfortable with their level of emergency savings. That’s up from 2023, according to Bankrate’s 2024 Annual Emergency Savings Report.
- The average American feels they need to earn over $186,000 to live comfortably. That’s down from 2023 but still more than double the average full-time, year-round worker’s salary, according to Bankrate’s 2024 Financial Freedom Survey.
- Many Americans carry credit card debt from month to month and still prioritize earning rewards. Sixty-seven percent of credit card debt holders try to maximize credit card rewards, according to Bankrate’s Chasing Rewards While in Debt Survey.
What does living paycheck to paycheck mean?
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.
The COVID-19 pandemic and inflation also contributed to the number of Americans living paycheck to paycheck.
“Simply put, living comfortably costs a lot more than it used to,” says Sarah Foster, Bankrate U.S. economy reporter. “Prices are up almost 21 percent since the pandemic first began in February 2020, requiring an extra $210 per every $1,000 someone used to spend on the items they both want and need. For the many Americans whose pay hasn’t kept up with inflation, higher prices essentially translate to an outright destruction of wages.”
“Inflation is the silent thief, and it comes with a price — often Americans’ chances of living a comfortable life.”
— Sarah FosterBankrate U.S. economy reporter
Living paycheck to paycheck demographics
This financial phenomenon isn’t limited to one group of Americans, but there are some trends to consider.
Living paycheck to paycheck by income
People with the lowest incomes tend to experience the highest rates of financial insecurity. According to Bankrate survey data, 43 percent of workers earning under $50,000 a year say they are living paycheck to paycheck.
But living paycheck to paycheck doesn’t necessarily mean you earn a low income — it can also result from things like underemployment or economic inflation. Others might earn a higher salary but live in cities with a high cost of living, have a large family or spend beyond their means. Thirty-three percent of workers earning between $50,000 and $79,999 annually say they’re living paycheck to paycheck, compared to 36 percent of workers earning between $80,000 and $99,999 and 24 percent of workers earning $100,000 or more.
Other Bankrate data supports these survey findings. Forty-three percent of Americans earning under $50,000 say they’ll likely never feel completely financially secure, compared to 13 percent of those earning $100,000 or more.
Meanwhile, 50 percent of American cardholders carry card balances from month to month, according to Bankrate’s Credit Card Debt Survey. Bankrate data shows that 58 percent of cardholders earning under $50,000 carry a balance from month to month, compared to 43 percent of those earning $100,000 or more.
As inflation continues and interest rates remain high, carrying a credit card balance can increase the chances of living paycheck to paycheck. This trend varies by generation, with Gen X being the most likely to live paycheck to paycheck, followed by millennials and Gen Z. Boomers are the least likely to be in this situation. Financial insecurity also rises with age, with boomers feeling the most financially secure compared to other generations. Gender disparities also exist, with women more likely to live paycheck to paycheck, have no emergency savings, feel financially insecure, and carry credit card debt compared to men. While living paycheck to paycheck may not directly impact credit scores, it can lead to consequences such as high credit card utilization ratios, late or missed payments, and not making minimum payments, all of which can affect credit scores negatively. To break the cycle of living paycheck to paycheck, individuals can consider increasing their income through side hustles or asking for a raise, as well as reducing expenses by creating a realistic budget and paying off credit card debt. Seeking advice from a financial advisor or credit counselor may also be beneficial in managing finances effectively. The SSRS Opinion Panel Omnibus is a national survey that is conducted twice a month and is based on probability sampling. The data for this survey was collected from May 17 to May 20, 2024, from a sample of 1,032 respondents. The survey was conducted through web (1,000 respondents) and telephone (32 respondents), with interviews being conducted in both English (1,006 respondents) and Spanish (26 respondents). The margin of error for the total number of respondents is +/- 3.5 percentage points at a 95% confidence level. All data from the SSRS Opinion Panel Omnibus is weighted to accurately represent the U.S. adult population aged 18 and above.
The Financial Freedom Survey had a total sample size of 2,407 U.S. adults and was conducted between May 16 and May 20, 2024.
For the Chasing Rewards While in Debt Survey, the total sample size was 2,239 adults, with fieldwork being carried out between January 24 and 26, 2024.
In the Side Hustle Survey, a total of 2,332 U.S. adults participated, and the fieldwork was conducted between June 10 and 12, 2024.
The Credit Card Debt survey involved a total sample size of 2,437 U.S. adults, out of which 1,877 were credit card holders and 930 carried a balance on their credit cards. The fieldwork for this survey took place between June 24 and 26, 2024.
Lastly, the March 2020 Long Term Debt Survey was conducted by YouGov Plc and involved a total sample size of 2,526 adults. The fieldwork for this survey was carried out between March 4 and 6, 2020, through online interviews. The figures from this survey have been weighted to accurately represent all U.S. adults aged 18 and above.