How Many Americans Are Living Paycheck To Paycheck?

This phrase can be a common buzzword, but what exactly is the meaning of “paycheck to paycheck”? Basically, if you’re living paycheck to paycheck, you don’t have money left over after covering your regular expenses.

Your paycheck, which you might receive every two weeks, gets eaten up by essential expenses like housing, food, and transportation. You don’t have extra to build an emergency fund, invest for retirement, or meet another financial goal.

This situation puts you in a precarious position if you run into emergency expenses or lose your job. You’d likely be unable to pay your bills if you lost your income or your next paycheck was delayed. People in this situation often end up going into debt to cover costs.

So, how many Americans live paycheck to paycheck? According to the survey from MarketWatch Guides, nearly two in three Americans are living paycheck to paycheck.¹ Another survey by PayrollOrg found an even higher percentage of Americans living paycheck to paycheck — 78%.² Here’s how the results break down by demographic.

• By gender: Among women, 72.1% said they were living paycheck, while 30% said they weren’t. By contrast, only 59.9% of men are living paycheck to paycheck, and 40.1% claimed not to be, according to MarketWatch.³
• By generation: In MarketWatch’s survey, millennials reported living paycheck to paycheck more than any other group, with 73.6% responding yes to this question. They were followed by Gen X (71.7%), Gen Z (66.8%), and finally Baby Boomers (54.5%).³
• By income: Having a high income doesn’t necessarily protect you from living paycheck to paycheck. A PYMNTS survey found that 48% of Americans who earn $100,000 or more each year and 36% of those earning more than $200,000 say they live paycheck to paycheck. The numbers were higher among those with lower incomes, though — about three in four people earning less than $50,000 per year and two in three people earning between $50,000 and $100,000 reported living paycheck to paycheck.⁴

Many factors contribute to financial strain among Americans. According to the Federal Reserve, inflation is the most common challenge for consumers.⁵

There’s only been a 3.9% increase in median weekly earnings alongside a not-much-lower Consumer Price Index (one measure of inflation) increase of 3.2%.⁶

Some other reasons that Americans are living paycheck to paycheck include:

• Increase in the cost of living: Around 28% of people have cited a high cost of living as their biggest financial challenge, found MarketWatch.³
• Low income: More than one in four Americans (26.6%) pointed to not enough income as their primary issue in MarketWatch’s survey.³
• Unexpected emergencies: Unpredictable expenses can also drain your budget. Around 37% of Americans could not cover a $400 expense in cash, according to the Federal Reserve’s Economic Well-Being of U.S. Households report.⁵
• Social pressures: The pressure to fit in with your social circle or “keep up with the Joneses” could be causing you to overspend or go into credit card debt.
• Medical expenses: The cost of healthcare can be a financial burden for Americans. A poll on health care debt from KFF found that 41% of consumers carry healthcare debt.⁷
• Financially supporting family members: About 6% of people in MarketWatch’s survey said that financially supporting others was the main reason they were living paycheck to paycheck.³

While living paycheck to paycheck can be stressful, there are ways to take back control of your finances. Here’s how to not live paycheck to paycheck and put yourself back in the driver’s seat of your financial situation.

• Track your spending habits: It’s crucial to see where your money is going each month. You can create a budget and track your spending with a simple spreadsheet or a budget-tracking app. You might discover areas where you’re overspending and can cut back. Zero-based budgeting is one approach to budgeting that can help.
• Establish a savings goal: Even saving a small amount from each paycheck can add up over time. If you can afford it, try automating a certain amount from each paycheck to go into a savings account. Consider setting up a high-yield savings account at your financial institution so you’re earning interest on your savings.
• Boost your income: Saving will only take you so far. Another option is looking for ways to increase your income, like working a side hustle, pursuing a promotion at work, or applying for a new job entirely. If you’re able to make more money, be careful to avoid lifestyle inflation, or you could end up back at square one.
• Rein in your debt: Carrying a lot of debt can be overwhelming, especially if your debt is racking up hefty interest charges. Come up with a plan for conquering your debt, like the debt avalanche or debt snowball approach. If you can qualify, a low-interest debt consolidation loan can also be a helpful tool. Consumers who are prone to overspending on credit cards might consider avoiding credit cards and paying for expenses with cash instead.

With rising prices, a high cost of living, and limited access to on-demand pay, many Americans are struggling to make ends meet. But there are steps you can take to break out of the paycheck-to-paycheck cycle and come out ahead.

Tracking your budget, reducing your spending, and boosting your income are all strategies for adjusting your spending and savings habits. If you’re ready to take stock of your financial situation and plan out your next steps, our budget calculator can help.