New Report: 54 Pct Of US Adult Consumers Feel Mired In Paycheck-To-Paycheck Living

consumer finance

When mental imagery and preconceived notions come into contact with reality, it can cause disorienting effects. For example, we tend to picture millennials and slightly older bridge millennials as having great-paying jobs and lifestyles to match. The truth is more complex.

It’s a bit of a shock to discover that those millennial cohorts, among others, are in many cases actually struggling to make ends meet. To gain a clearer understanding of the situation, PYMNTS surveyed over 7,100 U.S. consumers for the August 2021 edition of Reality Check: The Paycheck-To-Paycheck Report, done in collaboration with LendingClub.

The good news is that consumers are generally feeling sunnier about the economy as the pandemic recedes in fits and starts.

“Approximately 15 percent fewer U.S. residents now say they live paycheck to paycheck than said so in Q4 2020, and a total of 54 percent of adult U.S. consumers (124 million individuals) report feeling stuck in the paycheck-to-paycheck cycle,” per the report. “This is more than a small improvement: It means that fewer consumers are living paycheck to paycheck now than at any time since the end of Q1 2020, just after the pandemic began.”

Now for the not-so-good news: many people we picture as well-off are not necessarily so, depending largely on the regions where they live. “The cost of living tends to be far higher in cities than in rural areas, and these high prices can make it difficult for consumers to pay their bills. The result is often that consumers who live in regions with more metropolitan areas are more likely to live paycheck to paycheck,” the August report states.

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Location, Location, Vocation

Cost of living in various parts of the country — as well as job opportunities, pay scale and other factors that touch on paychecks ­— have a massive influence on who’s living between checks, and where they’re doing it.

For example, the August edition of Reality Check notes that millennials are at the point where they’re making the biggest-ticket purchases in life (homes, cars, college) and in more expensive parts of the country that can be a drain on even a healthy two-income household.

“Millennials in South Central and Northeast states are more cash-strapped than most,” per the report, which found that 71 percent and 69 percent of millennials “living in the South Central and the Northeast regions, respectively, live paycheck to paycheck.”

By comparison, seniors and baby boomers baby boomers are in many ways more settled financially, with just 40 percent of these cohorts in the U.S. living paycheck to paycheck according to the latest data.

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Low-Earners, High-Earners And Regional Effects

The struggles of higher-earning and more financially mature cohorts notwithstanding, low earners are found to be struggling between paychecks regardless of region.

“Average low-income consumers are 80 percent more likely to be living paycheck to paycheck than the average high-income consumer throughout the U.S., for example, though this gap varies by region,” researchers found.

It’s most pronounced in the Mountain region, “where low earners are 150 percent more likely than high earners to be caught in the paycheck-to-paycheck cycle. Our data shows that 73 percent of low-income Mountain State residents live paycheck to paycheck” compared to 29 percent of high-income residents in the same region.

That’s less the case elsewhere, with the August edition of Reality Check noting that “low-income consumers in the Northeast are just 58 percent more likely to be living paycheck to paycheck than high-income consumers in the same region.”

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