Nearly Three-Quarters of Millennials are Living Paycheck to Paycheck: Report
Almost three-quarters of millennials are living paycheck to paycheck, notably higher than other generations, according to a new report.
PYMNTS, which reports on financial news and data, and the financial services company LendingClub collaborated to release a report, entitled “New Reality Check: The Paycheck-to-Paycheck Report,” to learn consumers’ financial situations, broken down into the different generations.
The survey found 60.1 percent of consumers were living paycheck to paycheck last month, including 73.2 percent of millennials. Meanwhile, 65.5 percent of Generation Z consumers and 64.2 percent of Generation X were living paycheck to paycheck, but only 49.5 percent of baby boomers and senior citizens were.
The most cited reason for all respondents who said they were living paycheck to paycheck was that their paycheck only covers basic bills, with 38.4 percent saying so.
More than a quarter of respondents also said they are in the situation because they need to pay for expenses for other family members and have “significant” debts to pay. About 30 percent of millennials cited each of these reasons, as well.
The survey found more than 70 percent of millennials live with a partner or spouse, and more than 60 percent live with children or grandchildren. Almost 80 percent earn more than half of their household’s income, while 20 percent earn all of it.
But the researchers did find that millennials appear to be learning to manage finances more effectively, as they had an average savings of $11,000 last month compared to $7,300 one year prior. The report states that millennials and other paycheck-to-paycheck consumers learn to handle finances through recessions and financial crises.
The report also found Generation Z consumers trending up in the percentage living paycheck to paycheck. The almost 66 percent recorded last month is an 8-point increase from the year before. It states that many of these consumers are still establishing their careers and might be more likely to spend on discretionary purchases like eating out and entertainment.
Generation Z consumers are the most likely to cite discretionary spending as the reason they are living paycheck to paycheck, with 31 percent saying so. But almost 40 percent said a main cause of living paycheck to paycheck is that their salary only covers their basic expenses.
“With inflationary pressures expected to continue well into 2024, consumers of all generations remain tasked with adjusting their financial behaviors to be able to put aside savings and remain credit worthy,” the report concludes.
The resulted were gathered from March 8 to 17 based on a census-balanced survey of 3,363 U.S. consumers.