Consumers Change Spending Habits to Ease Monthly Money Squeeze

In the face of escalating living costs, it’s immediate survival or bust for many Americans.

The latest PYMNTS Intelligence reveals that 65% of consumers are living paycheck to paycheck, with 24% struggling to pay their bills. That’s nearly a quarter of Americans playing an exhausting game of financial whack-a-mole, deciding which bills to pay in full, which to pay partially and which to outright ignore until the next paycheck arrives.

This financial strain has led many to prioritize immediate survival over long-term financial planning, with a significant portion of American consumers adopting short-term, reactive strategies to manage their financial obligations.

It’s not just groceries and gas — essential bills are creeping up, too. The study shows that 78% of consumers have seen at least one essential bill increase in the past year. Electricity (56%), insurance (52%) and gas (51%) have all gotten pricier, leaving consumers with even less breathing room. Renters are especially feeling the squeeze, with nearly half (49%) reporting rent hikes.

Survival Mode Means Reacting Instead of Planning

With expenses climbing, many struggling consumers are turning to short-term fixes. According to the report, those living paycheck to paycheck take an average of 5.9 actions to manage their rising bills, compared to just 3.2 actions by more financially secure individuals. And these actions? They’re not exactly financial masterstrokes.

Instead of negotiating better rates or cutting non-essentials, many are skipping or partially paying bills (33%) or outright canceling services (22%). Only 12% are engaging in proactive financial maneuvers, like shopping for cheaper insurance or renegotiating utility contracts. The problem with this strategy?

It’s like putting a Band-Aid on a broken leg — it doesn’t solve the core issue, and in many cases, it can make things worse.

One of the most revealing aspects of the study is how consumers handle their bills. About 41% of Americans use autopay for their recurring bills — but struggling consumers? Not so much. Only 26% of those in financial distress rely on autopay, compared to a much higher rate among financially stable individuals.

The reason? When you’re living paycheck to paycheck, you can’t afford to have money pulled from your account on a fixed schedule — you need flexibility. Many consumers fear overdraft fees or insufficient funds, making the idea of autopay downright risky.

Read more: Struggling Consumers Go to Short-Term Strategies to Manage Higher Expenses

The financial stress isn’t evenly distributed. Higher-income consumers (earning more than $100K per year) are nearly twice as likely to use autopay (48.2%) than those earning under $50K (31%).

Generationally, Baby Boomers lead the pack in autopay adoption at 43%, while Gen Z lags behind at just 34.6%. It’s a generational split that may reflect not only financial security but also familiarity (or skepticism) toward automated banking tools.

Interestingly, the manual payers — those who have to click “Pay Now” every month — are also the ones most likely to notice price increases. While autopay users might not catch a $10 monthly increase, those paying manually are more likely to see the uptick and take action (if they can).

The data is clear: financial stress isn’t going away anytime soon. Even as inflation eases, the damage it inflicted is still being felt. Consumers may not have the luxury of long-term planning, but if they continue to rely on short-term stopgaps, their financial struggles will only deepen.

Some experts argue that financially struggling consumers should focus on renegotiating bills, seeking hardship programs, and sticking to detailed budgets. But for many living paycheck to paycheck, these suggestions can feel out of touch with their reality. When you’re deciding between rent and food, calling your utility company to haggle over rates doesn’t always feel like a priority.

What’s needed? More consumer-friendly financial tools, greater education on debt management, and — perhaps most critically — real wage growth that actually keeps up with the cost of living.