More Americans are living paycheck to paycheck, but that doesn’t necessarily mean they’re waiting on food pantry lines. And it also doesn’t have to mean they’re stuck forever with tight finances.
The share of consumers living a financial lifestyle in which income flies out the door the month it comes in rose three percentage points between June and July 2025. This increase isn’t coming from a rise in the number of people barely scraping by, though. It’s coming from individuals who aren’t struggling to make ends meet but may not have a financial safety net or much left over for discretionary purchases. The portion of consumers living paycheck to paycheck without difficulty paying their bills climbed 3.5 percentage points over the period.
Drilling down into the demographics, the groups that have seen increases in paycheck-to-paycheck living in the last couple of months include middle-income consumers (those annually earning between $50,000 and $100,000), people in Generation X or older (now aged 45 and up), rural and suburban individuals and unemployed people looking for work.
Most paycheck-to-paycheck consumers remember a time in their adult lives when they didn’t see their paychecks evaporate in bill payments as soon as they rolled in. Moreover, nearly three in four of these individuals say they maybe or definitely could escape this financial lifestyle by altering their spending habits—though the surest route to escaping the financial squeeze is a pay raise.
These are just some of the findings detailed in “Financial Fragility in the Middle: How Income and History Shape Consumer Risk,” the newest installment of New Reality Check: The Paycheck-to-Paycheck Report, a PYMNTS Intelligence exclusive series. This edition examines paycheck-to-paycheck consumers’ financial histories and their prospects for the future. It draws on insights from a survey of 2,191 United States consumers conducted from July 7, 2025, to July 15, 2025.
Many consumers move in and out of paycheck-to-paycheck living, but some stay stuck for years.
Paycheck-to-paycheck living is not a fixed state; many consumers move between different financial lifestyles over time, depending on their life stages and the economy. In fact, 53% of paycheck-to-paycheck individuals have had savings to lean on at some point in their adult life.
The share is even higher among the 24% of these consumers who say they could stop living paycheck to paycheck if they tried. For these individuals, nearly three in four have previously experienced more financial stability. By contrast, among the nearly three in 10 who don’t think they could escape this financial status, one in two has always lived this way. Only 44% previously had more financial freedom.
These findings suggest that prior financial stability could boost one’s confidence in the ability to exit the paycheck-to-paycheck state. Alternatively, the causality could be reversed: Some previously financially stable consumers could be choosing to live this financial lifestyle for a period of time when their monthly expenses rise, such as with homebuying or student loan repayments, or when income falls due to job changes or loss.
Many consumers become stuck in the paycheck-to-paycheck lifestyle.
Nonetheless, many individuals with tight pocketbooks get stuck. Among paycheck-to-paycheck consumers who once had financial breathing room, 29% lost that safety net before July 2020. That is, they’ve been stuck in a tight pocketbook state since the early years of the COVID-19 pandemic. A similar share has only been living this way for less than a year. That may be indicative of the rising cost of living, even as wage growth outpaces inflation.
Perhaps unsurprisingly, lower-income consumers who have shifted into this financial lifestyle have typically stayed in this state for longer periods of time. Strikingly, higher-income consumers who knew financial stability earlier are the most likely to have recently started living paycheck to paycheck.
Most millennial and Gen Z consumers who once lived financially stable lives only began living paycheck to paycheck in the last two years. Conversely, nearly half of boomers and older seniors in this group have been in this lifestyle for more than five years.
A consumer’s financial history, and not just their current income, shapes how they see their economic prospects.
Paycheck-to-paycheck consumers can experience their financial circumstances differently depending on their pasts and perceived futures. PYMNTS Intelligence identifies four different personas:
Lifestyle Sliders:
These 17% of paycheck-to-paycheck consumers have experienced more financial freedom in the past and could return to financial stability through spending adjustments.
Potential Escapers
These 5.4% of consumers have always lived in this financial lifestyle. However, the future looks brighter: They see a path toward moving out of this financial lifestyle by changing their spending.
Shifted Stuck:
These 12% may not have always lived paycheck to paycheck, but at this point, it’s out of their control. They see no way to get out by changing their spending.
Chronically Constrained:
These 14% have never experienced financial stability, and they probably won’t any time soon. They don’t see a way out of this financial lifestyle through spending changes.
Notably, the consumers who feel most demoralized by their financial conditions are not those who have always lived paycheck to paycheck but now see no way out. They remember an easier time but cannot escape their current conditions. Nearly half (46%) of Shifted Stuck individuals are struggling with and overwhelmed by their financial situation. In contrast, just 38% of the chronically constrained say the same.
Perhaps unsurprisingly, consumers who have not always lived paycheck to paycheck and who see a way out are the most likely to feel positively about where they are, financially speaking. Nearly one in three (31%) feel confident and secure, and another 45% are managing okay but would like to improve.
More income is the most common path out of paycheck-to-paycheck living.
Certainly, some high-earning consumers intentionally opt for this financial lifestyle. But they need to make more than might be expected to get to the point where this lifestyle is more likely to be a conscious decision than an uncontrollable circumstance.
Consumers need at least $90-$95k in annual household income—or $70-$75k in annual personal income—to be more likely to be living paycheck to paycheck by choice than by necessity.
It’s clear that though many high-income consumers live paycheck to paycheck, their financial lifestyle typically doesn’t stem from the same reasons affecting lower-earning individuals. Instead, it’s usually a result of their expenditure decisions. They could build a financial safety net if they wanted to.
While higher income doesn’t guarantee someone will not live paycheck to paycheck, it certainly helps. In fact, income increases are the most common way consumers escape this financial lifestyle. Two in three consumers who once lived paycheck to paycheck but no longer do cite increased income as a key reason. Additionally, 38% cite it as the primary reason.
Of course, more money is not the only way these consumers have built up financial stability. Many also cite better or more employment, paying off major debts and more careful money management as key contributors.
The factors consumers cite as the main reason they escaped paycheck-to-paycheck living depend on how long ago they got out of that financial lifestyle. More than one in five individuals who stopped living this way less than six months ago cite their more careful use of credit products, including credit cards and buy now, pay later, as the main reason. Those who escaped in the last year are disproportionately likely to acknowledge more careful budgeting.
Those who escaped between one and two years ago are the most likely to cite having moved into more affordable housing. They’re also the most likely to credit receiving financial support from family and friends or governmental sources as the top reason.
For those who have been free from this financial lifestyle for more than five years, increased income and better employment are far and away the top reasons.
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Methodology
“Financial Fragility in the Middle: How Income and History Shape Consumer Risk,” the newest installment of New Reality Check: The Paycheck-to-Paycheck Report, a PYMNTS Intelligence exclusive series, is based on a survey of 2,191 U.S. consumers conducted from July 7, 2025, to July 15, 2025. The report examines paycheck-to-paycheck consumers’ financial histories and their prospects for the future. Our sample was balanced to match the U.S. adult population by age, gender and region.
