A new survey found the majority of Americans live paycheck to paycheck, and the problem is worse for millennials, with nearly three-quarters, or 73 percent, living paycheck to paycheck.
The report is based on a census-balanced survey of 3,363 U.S. consumers conducted from March 8 to 17 and an analysis of other economic data.
The survey found 60 percent of consumers across all age groups were living paycheck to paycheck, down from 64 percent during the same period last year.
Millennials Face Struggle
When broken down by age group, millennials—those born between 1981 and 1996—are the most likely to live paycheck to paycheck, with over 7 out of 10 currently doing so, according to the report.Compared with other generations, 65.5 percent of Gen Z consumers, 64.2 percent of Gen X consumers, and 49.5 percent of baby boomers and seniors responded they were living paycheck to paycheck.
The main reasons for millennials’ financial hardship are heavy debt and the financial pressure of having to look after dependent family members, according to the report.
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.
This generation also contends with income levels that haven’t kept pace with huge increases in the cost of living.
Gen Z Show Signs of Strain
The report also found a growing trend of Gen Z consumers showing signs of financial struggle. The almost 66 percent recorded in March is an increase from 58 percent a year ago. Many in this group are still establishing their careers, which can mean less earning potential and a greater susceptibility to layoffs.“Generation Z are more apt to face financially life-altering events such as job loss, making them more financially vulnerable than any other generation,” Nayar said.
Generation Z consumers are the most likely to cite discretionary spending as the reason they live paycheck to paycheck, with 31 percent saying so.
“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 creditworthy,” the report stated.
Living paycheck to paycheck can lead to increased levels of debt and stress. Most experts recommend going back to a basic budget, even if that means using the envelope method, or “cash stuffing,” to stay disciplined.