Half of high earners juggle their finances between paychecks. This data book explores the intricate reality of paycheck-to-paycheck living, revealing that it’s a far more pervasive phenomenon than simple income levels suggest. Moving beyond conventional wisdom, this report uncovers how this financial lifestyle spans all income brackets, with even those earning substantial salaries finding themselves in the lifestyle.
This data book offers a comprehensive look at the paycheck-to-paycheck consumer by dissecting the nuances between living this financial lifestyle by necessity, choice or a mix of both. The findings highlight the diverse drivers and consequences of this financial reality by examining spending patterns, credit card management and savings behaviors across different income levels and demographic groups. Ultimately, this report underscores that understanding the plight of the paycheck-to-paycheck consumer requires a multifaceted approach. This approach must consider not only income but also individual choices, financial obligations and broader economic pressures.
Finding 1: Paycheck-to-Paycheck Lifestyle and Income
Paycheck-to-paycheck living affects a significant portion of the population across all income levels, including high earners. As of January 2025, half of high earners lived paycheck to paycheck. All income groups are equally represented in the “paycheck to paycheck without issues paying bills” category. This highlights that the vulnerability of living paycheck to paycheck is not solely a low-income issue, but a broader reality in today’s economy.
Finding 2: Necessity or Choice
A considerable percentage of paycheck-to-paycheck individuals live this way due to necessity, primarily driven by insufficient wages for lower earners. Data shows that 21% live paycheck to paycheck, mostly by necessity. Lower earners often cite insufficient income as a key driver of their paycheck-to-paycheck status. This underscores the strain faced by a segment of the population whose earnings don’t cover basic needs.
Finding 3: Saving in the Paycheck-to-Paycheck Lifestyle
Those living paycheck to paycheck by necessity have significantly lower savings than those living paycheck to paycheck by choice. Consumers living paycheck to paycheck by necessity have approximately $1,400 less in savings on average. This lack of financial cushion makes those living paycheck to paycheck out of necessity far more vulnerable to unexpected expenses and financial shocks.
Finding 4: Credit Card Balances
Consumers living paycheck to paycheck with issues paying bills are far more likely to revolve their credit card balances. A significantly higher percentage of paycheck-to-paycheck consumers who struggle financially revolve their credit card balances compared to those living paycheck to paycheck without issues paying bills and those who don’t live paycheck to paycheck. In January 2025, 44% of those living paycheck to paycheck with issues paying bills revolved their credit card balances. Twenty-seven percent of those without issues paying bills and 8% of those not living paycheck to paycheck did the same. This indicates a reliance on credit to make ends meet, often leading to accumulating debt and further financial instability.
The share of struggling paycheck-to-paycheck consumers who always or usually revolve their credit card payments has increased since 2023. This share has risen by 7.4 percentage points since 2023. This upward trend suggests a worsening financial situation for those already struggling, making it harder to break the cycle of debt.
Finding 5: Increase in the Paycheck-to-Paycheck Lifestyle
A notable portion of lower-income individuals who were not living paycheck to paycheck in early 2023 transitioned to this status by January 2025. The share of lower-income consumers (those annually earning less than $50K) able to not live paycheck to paycheck decreased from 26% in January through April 2023 to 18% by January 2025. This decline suggests that rising costs and economic pressures are pushing more low-income individuals into a financially precarious paycheck-to-paycheck existence.
Finding 6: Essential Expenses
Among those living paycheck to paycheck, a considerable share allocates a significant portion of their income to essential expenses. These expenses include housing and groceries, leaving less for discretionary spending or savings. While all paycheck-to-paycheck consumers allocate funds to essentials, those likely living paycheck to paycheck by necessity are less likely to plan spending on discretionary items like recreation compared to those living paycheck to paycheck by choice. This limited capacity for discretionary spending underscores the tight financial constraints those living paycheck to paycheck out of necessity face.
