Local News

61% of Americans, more than half of those making $100K+, are living paycheck to paycheck, new report finds

The LendingClub report found 33.5 million Americans spent more than they earned in the past six months.
Posted 2022-08-04T20:33:32+00:00 - Updated 2022-08-04T22:26:55+00:00
Inflation forces more families to live paycheck to paycheck

A report released this week by the San Francisco-based financial services company LendingClub shows 61% of Americans are living paycheck-to-paycheck.

The total includes 203 million Americans, which is an increase from 55% a year ago. In April 2021, the report found 52% of Americans lived paycheck to paycheck.

“We’re not really seeing consumers slow down their spending habits despite the higher cost of living,” said LendingClub millennial money expert Alia Dudum.

The report found 33.5 million Americans spent more than they earned in the past six months.

It also found the biggest rise in paycheck-to-paycheck consumers was in consumers earning between $100,000 and $150,000, up 11 percentage points from May 2022 to 52% in June 2022.

Dudum explained how someone making a six-figure salary could be living paycheck to paycheck.

“As you grow into having more financial obligations, you have your children, education, bills just add up and it becomes increasingly harder to manage that spending,” Dudum said.

Townsend Asset Management financial advisor Gerald Townsend offered his two cents’ worth on how high-paying jobs aren’t always the answer. In certain circumstances, Townsend said he said he’s seen a mismanagement of money.

“We strive for higher income, and that’s all good, but higher expenses come along with it,” Townsend said. “Sometimes more family stress comes along with it, and sometimes it’s tough to navigate all that.”

Townsend is in his 40th year helping families in Raleigh manage their money and plan for their financial future.

“One of the hardest things to do financially is to live below your means,” Townsend said. “It’s tough.”

Townsend advises families to live below their means.

“Plan carefully, be patient, take those plodding steps forward and it will pass,” Townsend said. “As frightening as it seems sometimes, it will pass.”

Townsend acknowledged that the cost of gas and groceries is up compared to the previous year.

An inflation gauge closely tracked by the Federal Reserve jumped 6.8% in June from a year ago, the government said. It marks the biggest such jump in four decades.

“The first step toward longevity is survival, so if you’re paycheck-to-paycheck you’re in survival mode,” Townsend said.

Two of the easiest ways Townsend suggested to put aside more money month to month are:

  1. Find ways to increase your income: Maybe ask for a raise or get a side gig.
  2. Cut expenses where you can: Examples include eliminating a streaming service, don't take a dream vacation and optimize utility usage.

“We earn it, we’re going to spend it,” Townsend said. “We’re just geared that way.

“We have to fight that urge.”