Consumers who lived paycheck to paycheck and kept up with their bills bought from an average of 1.9 discretionary categories over the previous year. That put them closer to consumers who struggled to pay bills, who bought from 1.6 categories, than to those who didn’t live paycheck to paycheck, who bought from 2.5.
The two groups farthest apart in what they bought were closer in what they considered optional, as PYMNTS Intelligence found. Consumers who kept up with bills while living paycheck to paycheck classified an average of 10.5 of 22 categories as discretionary, compared with 10.1 among those who didn’t live paycheck to paycheck. In the September survey of 2,487 U.S. adults, counted a purchase as discretionary only when the respondent considered the category optional.
Among people who made discretionary purchases, 40% of those living paycheck to paycheck without difficulty paying bills rated at least one category a notable or major expense in a typical month. The share was also 40% among buyers who struggled to pay bills, compared with 34% among buyers who didn’t live paycheck to paycheck. The annual count measures how widely consumers bought across categories. The monthly rating captures how much those purchases mattered to buyers’ budgets.
Where Buyers Would Cut
Subscriptions show how differently buyers with similar views of what’s optional would respond if money got tighter. Among consumers who bought subscriptions and considered them discretionary, 57% of those living paycheck to paycheck and keeping up with bills would put them among their first cuts. That was three percentage points below the share among buyers struggling to pay bills and 18 points above the share among those who didn’t live paycheck to paycheck.
When consumers picked a discretionary expense to cut first, their reasons varied little across financial groups. In each group, 49% to 54% said the purchase was something they wanted more than something they needed. Another frequently cited reason was that the expense was easy to stop, at 43% to 44%.
At the other end of the budget, about 27% of consumers who kept up with bills while living paycheck to paycheck named mortgage or homeownership costs as the expense they would protect longest. The share was about the same among consumers who didn’t live paycheck to paycheck. For these two groups, the top priority was the same even though their willingness to cut subscriptions differed by 18 points.
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