60% of Americans Live Paycheck to Paycheck — Here’s 5 Tips To Save Money (2024)

FAQs

60% of Americans Live Paycheck to Paycheck — Here’s 5 Tips To Save Money? ›

More than 60% of Americans live paycheck to paycheck as of September 2023, according to a LendingClub report. Even people in higher income brackets are affected. More than half of Americans earning over $100,000 a year live paycheck to paycheck.

More than 60% of Americans live paycheck to paycheck as of September 2023, according to a LendingClub report. Even people in higher income brackets are affected. More than half of Americans earning over $100,000 a year live paycheck to paycheck.

It found that 62% of all consumers now live paycheck to paycheck, including 36% of those whose annual incomes exceed $200,000. PYMNTS Intelligence has tracked paycheck-to-paycheck data for nearly four years.

According to PYMNTS Intelligence, 62% of U.S. consumers now live paycheck to paycheck, and that includes 48% of consumers earning more than $100,000 annually. In other words, higher incomes do not necessarily protect people from the financial stress that comes from living from one paycheck to the next.

By definition, a millionaire is someone who has at least $1 million in assets. Someone who lives paycheck to paycheck has no savings or assets because they spend their entire paycheck by the time the next one arrives. So the answer to your specific question is no. A millionaire does not live paycheck to paycheck.

Persons living paycheck to paycheck are often referred to as the working poor, but that may not accurately describe the full scope of this phenomenon because it cuts across multiple income levels.

If you had an income of $200,000, that would put you in the top 12% of household incomes or the top 5% of individual incomes in 2022. Though I prefer household income over individual income, no matter how you cut it, $200k a year puts you on the higher end of the income spectrum.

As of May 2023, more than 1 in 5 Americans have no emergency savings.

Do You? 20% of adults ages 50+ have no retirement savings, 61% worry they won't have enough at retirement, as per new AARP survey. Plus six tips to start saving now.

The Takeaway

For most individuals and small families, the answer to “Is $100,000 a good salary?” is a resounding “yes.” Cost of living and family size can affect how far $100,000 will go, but generally speaking, you can live comfortably on $100,000 a year. Are you hoping to make the most of your salary?

What salary is considered rich for a single person? ›

Based on that figure, an annual income of $500,000 or more would make you rich. The Economic Policy Institute uses a different baseline to determine who constitutes the top 1% and the top 5%. For 2021, you're in the top 1% if you earn $819,324 or more each year. The top 5% of income earners make $335,891 per year.

“With a nest egg of $100,000, that would only cover two years of expenses without considering any additional income sources like Social Security,” Ross explained. “So, while it's not impossible, it would likely require a very frugal lifestyle and additional income streams to be comfortable.”

The short answer to what happens if you invest $500 a month is that you'll almost certainly build wealth over time. In fact, if you keep investing that $500 every month for 40 years, you could become a millionaire. More than a millionaire, in fact.

The rate of Americans who are living paycheck to paycheck is on the rise, up 2 percentage points from a year earlier, the analysis found. Inflation is partly to blame, with consumers still grappling with higher prices — although prices have cooled since hitting a 40-year high of 9.1% in June 2022.

But that feat isn't easy for many Americans — 64% of whom, according to the latest LendingTree survey of more than 2,000 U.S. consumers, are living paycheck to paycheck at least periodically. (Almost half, at 46%, live this way all the time.)

According to the newest survey, only 44% of U.S. adults say they would pay an emergency expense of $1,000 or more from their savings.

50% of your net income should go towards living expenses and essentials (Needs), 20% of your net income should go towards debt reduction and savings (Debt Reduction and Savings), and 30% of your net income should go towards discretionary spending (Wants).