More than 1 in 3 American workers are living paycheck to paycheck, with little-to-no money left for savings after covering monthly expenses, according to a new survey from Bankrate.
Key Findings:
- Paycheck to Paycheck Living: 34% of workers are living paycheck to paycheck, with only 19% feeling satisfied with their pay. Around 24% feel they are not fairly compensated for their work, and 19% believe they are underpaid compared to their peers with similar qualifications.
- Generational Differences: Generation X workers (ages 44-59) are the most likely to live paycheck to paycheck (40%), compared to millennials (ages 28-43) at 34%, and both Gen Z (ages 18-27) and baby boomers (ages 60-78) at 28%.
- Regional Disparities: Workers in the South (38%) and Midwest (37%) are more likely to report living paycheck to paycheck, compared to 32% in the West and 25% in the Northeast.
- Marital Status Impact: Nearly half of divorced workers (49%) live paycheck to paycheck, versus 35% of single workers and 27% of married workers.
- Income Levels: Lower earners (under $50,000 annually) are significantly more likely to live paycheck to paycheck (43%) compared to those earning $50,000-$79,999 (33%), $80,000-$99,999 (36%), and $100,000 or more (24%).
The Big Picture: Inflation continues to erode purchasing power, with prices up almost 21% since February 2020, requiring an additional $210 for every $1,000 spent pre-pandemic. This financial strain means many Americans’ wages have not kept up with the rising cost of living, leading to increased debt and reduced savings.
The Last Word: “In the absence of automated savings, the presence of high inflation and a rising cost of living make it that much harder to get started,” said Greg McBride, the chief financial analyst at Bankrate. “If you wait until the end of the month and try to save what is left over, too often there is nothing left over.”
