Many Americans enjoy the advantages of secure jobs and ample savings, but millions of others lack the funds to cover everyday expenses or emergencies. Seventy-five percent of Americans say they are not completely financially secure, and 30 percent never expect to be, according to Bankrate’s Financial Freedom Survey.
More than 1 in 3 workers (34 percent) are living paycheck to paycheck, according to Bankrate’s new Living Paycheck to Paycheck Survey. That means that about a third of American workers say they don’t have enough money left over after covering their expenses to save for future expenses.
For Americans, it likely feels akin to walking a tightrope with no safety net, where the balance between expenses and earnings becomes a delicate dance.
— Sarah Foster, Bankrate Economic Analyst
Key insights on living paycheck to paycheck
- More than 1 in 3 workers (34 percent) say they are living paycheck to paycheck. That means they have little to no money left over for savings after covering their monthly expenses.
- Nearly 6 in 10 Americans (59 percent) are uncomfortable with their level of emergency savings. That’s up from 2023, according to Bankrate’s 2024 Annual Emergency Savings Report.
- The average American feels they need to earn over $186,000 to live comfortably. That’s down from 2023 but still more than double the average full-time, year-round worker’s salary, according to Bankrate’s 2024 Financial Freedom Survey.
- Many Americans carry credit card debt from month to month and still prioritize earning rewards. Sixty-seven percent of credit card debt holders try to maximize credit card rewards, according to Bankrate’s Chasing Rewards While in Debt Survey.
What does living paycheck to paycheck mean?
The expression, “living paycheck to paycheck,” generally refers to having little or no money for savings left over from your paycheck after covering your regular expenses. You might be unable to pay your bills if you suddenly become unemployed or don’t receive the next paycheck.
The COVID-19 pandemic and inflation also contributed to the number of Americans living paycheck to paycheck.
“Simply put, living comfortably costs a lot more than it used to,” says Sarah Foster, Bankrate U.S. economy reporter. “Prices are up almost 21 percent since the pandemic first began in February 2020, requiring an extra $210 per every $1,000 someone used to spend on the items they both want and need. For the many Americans whose pay hasn’t kept up with inflation, higher prices essentially translate to an outright destruction of wages.”
“Inflation is the silent thief, and it comes with a price — often Americans’ chances of living a comfortable life.”
— Sarah FosterBankrate U.S. economy reporter
Living paycheck to paycheck demographics
This financial phenomenon isn’t limited to one group of Americans, but there are some trends to consider.
Living paycheck to paycheck by income
People with the lowest incomes tend to experience the highest rates of financial insecurity. According to Bankrate survey data, 43 percent of workers earning under $50,000 a year say they are living paycheck to paycheck.
But living paycheck to paycheck doesn’t necessarily mean you earn a low income — it can also result from things like underemployment or economic inflation. Others might earn a higher salary but live in cities with a high cost of living, have a large family or spend beyond their means. Thirty-three percent of workers earning between $50,000 and $79,999 annually say they’re living paycheck to paycheck, compared to 36 percent of workers earning between $80,000 and $99,999 and 24 percent of workers earning $100,000 or more.
Other Bankrate data supports these survey findings. Forty-three percent of Americans earning under $50,000 say they’ll likely never feel completely financially secure, compared to 13 percent of those earning $100,000 or more.
Meanwhile, 50 percent of American cardholders carry card balances from month to month, according to Bankrate’s Credit Card Debt Survey. Bankrate data shows that 58 percent of cardholders earning under $50,000 carry a balance from month to month, compared to 43 percent of those earning $100,000 or more. As inflation persists and interest rates remain high, carrying a credit card balance may only further the likelihood of living paycheck to paycheck.
Living paycheck to paycheck by generation
While every generation has some people who live paycheck to paycheck, it becomes more likely with age before dropping in likelihood with boomers.
This mirrors the likelihood of generations having more credit card debt than emergency savings — 32 percent of Gen Z have more credit card debt than emergency savings, compared to 46 percent of millennials, 47 percent of Gen X and 24 percent of boomers.
| Generation | Percentage of workers living paycheck to paycheck |
|---|---|
| Gen Z | 28 percent |
| Millennials | 34 percent |
| Gen X | 40 percent |
| Boomers | 28 percent |
Financial insecurity also increases with age. Bankrate survey data also shows that 13 percent of Gen Z feel they’re not completely financially secure and likely never will be, compared to 21 percent of millennials, 37 percent of Gen X and 42 percent of boomers.
Living paycheck to paycheck by gender
There are gender disparities, too. Female workers are more likely than their male counterparts — 36 percent compared to 32 percent, respectively — to say they live paycheck to paycheck.
Based on additional Bankrate data from June, women are more likely to have no emergency savings (30 percent) than men (24 percent). Women are less likely to feel completely financially secure (23 percent) than men (27 percent), based on Bankrate data from July. And women are more likely to carry credit card debt (52 percent) than men (48 percent), based on Bankrate data from August.
On the other hand, women say they would feel financially comfortable with a lower average salary ($176,000) than men ($197,000), according to Bankrate data from July.
Can living paycheck to paycheck impact your credit?
Living paycheck to paycheck doesn’t have a direct impact on your credit but can have indirect consequences.
“Those living paycheck to paycheck often turn to credit cards to make up for a cash shortfall or to pay for emergencies or purchases that don’t fit within their budgets,” says Amy Maliga, former financial educator with Take Charge America, a nonprofit financial counseling agency. “This can lead them to being overextended, carrying balances month to month and paying high interest rates without a clear path to pay off the debt.”
Possible consequences to your credit of living paycheck to paycheck include:
- High credit utilization ratio: A lack of savings may result in putting big expenses on a credit card. This can raise your credit utilization ratio, a factor that impacts your credit score.
- Late or missed payments: Depending on each paycheck to pay your bills may lead to late or missed payments. Since payment history is among the most important factors impacting your credit score, missing payments could ding your score.
- Not making minimum payments: As your card balance grows, the minimum payment may become unaffordable, causing you to miss or make late payments.
Having poor credit increases the cost of borrowing money, potentially spiraling into more debt. Even if money is tight, responsible credit use can help prevent expensive debt later down the road.
How to budget when living paycheck to paycheck
Even if you’re living paycheck to paycheck, you may want to set a goal of growing an emergency fund. While this can be challenging if you don’t have much money left over, two possibilities to consider are thinking creatively about increasing your income and reducing your expenses.
Increase your income
There are a couple ways to increase your household income. First, you can take on additional work, either by increasing your hours at your current job or taking on a second job. Side hustles have become increasingly popular, allowing people to use skills like childcare, baking or driving to earn extra money.
In fact, more than 1 in 3 Americans (36 percent) have a side hustle, according to Bankrate’s 2024 Side Hustles Survey.
Another path to increasing your income is through your current job. You could ask for a raise or earn a promotion to a higher-paid position. Admittedly, this can feel intimidating in today’s labor market.
“It is true that the job market is a bit lopsided, with government and leisure hospitality jobs driving the bulk of the hiring,” Foster says. “But it’s also true that layoffs and the unemployment rate remain historically low, hopefully helping continue to give Americans the bargaining power they need to ask for a raise and advocate for fair pay.”
Also keep in mind that a rewards credit card can help you bring in extra cash back or travel points or miles. You’ll just want to use the card responsibly to avoid hurting your credit score or accumulating debt.
Reduce your expenses
To reduce expenses, start with a realistic budget. A budgeting app can track your expenses and help you see where your money goes. It’s possible that you’re overspending in ways you didn’t realize — like on subscriptions you aren’t using or online impulse purchases.
Paying off any credit card debt should be another step, as interest charges are a large expense with no benefit. A balance transfer card with a 0 percent intro APR could help you begin repaying debt without accruing more interest.
Talk to an expert
If you’re struggling to change your income or expenses, consider meeting with a nonprofit credit counselor or financial advisor. “If you can’t work out a balanced budget, talk with a nonprofit credit counselor who can work with you to review your income, expenses and debts, put together a workable budget and suggest strategies for eliminating debt,” Maliga suggests.
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Bankrate commissioned YouGov Plc and SSRS to conduct the surveys. All figures, unless otherwise stated, are from YouGov Plc. All YouGov surveys were conducted online, with results weighted and representative of all U.S. adults.Living Paycheck to Paycheck Survey: Total sample size was 2,407 adults. Fieldwork was undertaken between May 16-20, 2024.
Emergency Savings Report: The study (that was conducted May 2024 was conducted by SSRS on its Opinion Panel Omnibus platform. The SSRS Opinion Panel Omnibus is a national, twice-per-month, probability-based survey. Data collection was conducted from May 17 – May 20, 2024 among a sample of 1,032 respondents. The survey was conducted via web (n=1,000) and telephone (n=32) and administered in English (n=1006) and Spanish (n=26). The margin of error for total respondents is +/- 3.5 percentage points at the 95% confidence level. All SSRS Opinion Panel Omnibus data are weighted to represent the target population of U.S. adults ages 18 or older.
Financial Freedom Survey: Total sample size was 2,407 U.S. adults. Fieldwork was undertaken between May 16-20, 2024.
Chasing Rewards While in Debt Survey: Total sample size was 2,239 adults. Fieldwork was undertaken between January 24-26, 2024.
Side Hustle Survey: Total sample size was 2,332 U.S. adults, Fieldwork was undertaken between June 10-12, 2024.
Credit Card Debt survey: Total sample size was 2,437 U.S. adults, of whom 1,877 were credit card holders and 930 carry a balance on their credit card(s). Fieldwork was undertaken between June 24-26, 2024.
March 2020 Long Term Debt Survey: All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,526 adults. Fieldwork was undertaken between March 4-6, 2020. The survey was carried out online. The figures have been weighted and are representative of all US adults (aged 18+).
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