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Yahoo Finance Plus Wealthier Americans Making $250,000 or More are Beginning to Live Paycheck to Paycheck
It’s no secret that four-decade-high inflation is affecting many Americans in every aspect of their lives, from soaring food prices to record gas prices. What may be surprising, however, is that because of inflation, consumers in all income brackets — including those who make more than $250,000 annually — increasingly live paycheck to paycheck, according to new research.
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A June study, by Pymnts.com and LendingClub, found that that 61% of U.S. consumers lived paycheck-to-paycheck in April 2022, up from 52% in April 2021.
In other words, this increase means that three in five U.S. consumers devote nearly all their salaries to expenses with little to nothing left over at the end of the month, per the provided data.
Perhaps shockingly, in April 2022, 36% of polled consumers earning $250,000 or more annually lived paycheck to paycheck, as did those earning between $200,000 and $250,000 per year.
The research notes that those who live paycheck to paycheck fall into two categories: those who can pay their bills easily and those who cannot.
In April 2022, 40% of respondents were living paycheck to paycheck without difficulties paying monthly bills, an increase from 31% in April 2021. Meanwhile, the share of those living paycheck to paycheck with issues paying their bills also rose to 22% in April 2022 from 21% in April 2021, the data shows.
Jeanniey Walden, CMO of DailyPay, told GOBankingRates that “the paycheck to paycheck epidemic should be the biggest cause of concern for employers nationwide.”
“Three quarters of Americans rank finances as their number one source of stress and that number is only rising as the stimulus checks of the last two years are replaced by inflation,” Walden said. “The savings rate just dropped to its lowest level since 2008 and we expect that trend to continue as prices rise faster than wages. This has spilled over into workplace productivity, with 86% of executives reporting elevated levels of stress, from frontline workers to the front office. That’s why we’re seeing more and more companies offer financial wellness programs like on-demand pay and savings tools so their workers aren’t caught in pernicious cycles of debt.”
Another key finding of the research is that Americans earning more than $250,000 are 40% more likely to engage with financial products — such as credit cards and personal loans — than consumers in the lowest income bracket.
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Finally, the research shows that credit card ownership remains high, with 81% of U.S. adults polled saying they have at least one credit card. This share grows as annual income increases, with 95% of consumers who earn more than $250,000 holding at least one credit card. While 26% of consumers earning more than $250,000 have two cards, the survey data indicates that they are also the most likely income bracket to have three credit cards, with 22% of respondents saying so.
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This article originally appeared on GOBankingRates.com: Wealthier Americans Making $250,000 or More are Beginning to Live Paycheck to Paycheck
