Penny-pinching nation: More than a third of workers say they’re living paycheck to paycheck
They’re known as the “working poor.” They have little to no money leftover to save for future goals after covering their monthly expenses, and if they were to lose their primary share of income, they likely would struggle to make ends meet.
They’re the Americans living paycheck to paycheck, and according to new data from Bankrate, more than 1 in 3 workers (34 percent) currently feel like they are living this way. Those numbers might be even higher when factoring in all U.S. adults, considering that 6 in 10 Americans (60.1 percent) are in the labor force, Labor Department figures show.
Americans have long found it hard to save for the future. Back in 2018, less than 2 in 5 (39 percent) indicated they would pay for an unexpected $1,000 expense with their savings. Those figures have barely budged over the years, most recently hitting 44 percent in data from 2024, Bankrate’s 2024 Emergency Savings Report showed.
Helping put Americans on slightly better footing is a stable labor market. Enticed by new opportunities and better bargaining power, millions more Americans are working today than before the pandemic, according to the Bureau of Labor Statistics. Workers’ pay has risen at the fastest pace in records dating back two decades, the agency’s data also shows. Even Bankrate’s own Pay Raise Survey showed that 64 percent of workers received a pay increase by getting either a raise or finding a better-paying job between October 2022 and 2023, up from 61 percent in 2022.
But it’s not enough to help them feel like they’re getting ahead. While wage growth was robust, inflation was even more red-hot, continuing to outpace workers’ pay since prices first burst after the pandemic, according to Bankrate’s Wage-to-Inflation Index. Back in 2023, 3 in 5 workers (60 percent) said their income has not kept up with increases in household expenses because of inflation in the past 12 months, an increase from 55 percent in the year before.
In the absence of automated savings, the presence of high inflation and a rising cost of living make it that much harder to get started. If you wait until the end of the month and try to save what is left over, too often there is nothing left over.— Greg McBride, CFA , chief financial analyst for Bankrate
Key takeaways on Bankrate’s Paycheck to Paycheck Survey
- Financial fragility: More than 1 in 3 workers (34%) say they are living paycheck to paycheck, defined as having little to no money left for savings after covering monthly expenses.
- Lack of pay satisfaction: Just 19% of workers say they feel satisfied with how much they are paid, while roughly 1 in 4 workers (24%) say they feel they are not fairly compensated for their work. Meanwhile, nearly 1 in 5 workers (19%) say they are underpaid compared to their peers with the same work experience and qualifications, while an even smaller share of workers (16%) feel satisfied with their opportunities for promotion at work.
- Psychological impact: Workers who selected that they’re living paycheck to paycheck are disproportionately more likely to say they are not compensated fairly for their work, at 36%, versus 18% of those who didn’t select that they’re living that way. Workers who say they’re living paycheck to paycheck are also more likely to feel that they are underpaid compared to their peers with the same work experiences and qualifications (29%), versus 14% of those who didn’t say they are living paycheck to paycheck.
These are the workers most likely to be living paycheck to paycheck
Some workers are finding it even harder to set aside funds for the future after covering their daily costs.
Perhaps skewing older and their budgets not readjusted to life on their own, divorced workers (at 49 percent) were the most likely of any demographic to feel like they’re living paycheck to paycheck, compared with 35 percent of single workers and 27 percent of married workers.
Meanwhile, the country’s youngest and oldest workers were the least likely to feel this way about their budgets, at 28 percent for Generation Z (ages 18-27) and 28 percent for baby boomers (ages 60-78). That compares with 40 percent of Generation Xers (ages 44-59), the most likely of any generation, followed by 34 percent of millennials (ages 28-43).
Almost 2 in 5 (39 percent) of Hispanic workers feel they’re living paycheck to paycheck, versus 35 percent of Black workers and 33 percent of White workers.
Some workers are better off just because of the economic opportunities in their regions, with workers in the Northeast the least likely to feel that they’re living paycheck to paycheck, at:
- 25 percent of Northeasterners;
- 32 percent of Westerners;
- 37 percent of Midwesterners; and
- 38 percent of Southerners.
Americans in the South have the lowest inflation-adjusted median income ($37,860) of any Census region, according to data from the Bureau. Inflation in the Midwest and South, meanwhile, peaked at higher levels (9.5 percent and 9.8 percent, respectively) than in any other Census region.
Part of it could also be because of underlying economic inequalities for Americans living in urban versus rural areas:
- 43 percent of workers in rural areas are living paycheck to paycheck; versus
- 35 percent of workers who live in a suburb; and
- 31 percent of workers who live in a city.
Few Americans in the West (only 10 percent of the total population) live in rural areas, while about two-thirds (64 percent) of rural Americans live east of the Mississippi River and nearly half (47 percent) live in the South, according to Census Bureau data.
Lower-income workers (those making less than $50,000 annually) are also more likely to indicate they are living paycheck to paycheck (43 percent), compared to workers earning between $50,000-$79,999 annually (33 percent), between $80,000-$99,999 (36 percent) and workers earning $100,000 or more a year (24 percent).
“Millions of Americans have been economizing and trying to cut expenses as inflation roared, so maybe there isn’t any slack to cut more at this point,” McBride says. “In that case, look to boost income however you can, even if it is just temporarily in order to build a savings cushion.”
‘When you grow up poor in this country, it’s a disadvantage’
Zacqueline Baldwin once went a week without leaving her room during her junior year of college, a defense mechanism against feeling down about being in a different economic class than her peers.
It wasn’t as if the 25-year-old Rochester, New York, resident hadn’t already realized her economic disadvantages. Growing up, her family moved 11 times, each time noticing that her homes would get smaller and smaller. They started off in homes, then downsized to Section 8 apartments — before eventually not having a home at all. By the time Baldwin decided to take the leap and attend a university in Rochester for a degree in media studies, her mother had moved into a home that her stepfather’s family owned to save money.
Once, a high school boyfriend of hers even went on a three-week family trip to Germany. She realized that the furthest away she’d ever traveled from her home in Syracuse, New York, was Pennsylvania.
But the “weight of poverty,” as Baldwin puts it, was heavier at that time. Her Perkins Loans had expired her sophomore year, forcing her to take on more work between classes.
She picked up shifts at a grocery store on campus, swiping meal cards that often had thousands of dollars on them when, some days, she was lucky enough to have $10 on her own. She visited the local food pantry every day.
“It was sad being so poor with rich people all around you,” she says. “It felt like every time I left my room, my status hit me, and it was just making me feel so sad. I would just think about how all these people and me – we were in the same place, but our experiences were so different.”
Today, a year after graduating, Baldwin is working 50 hours a week as a day care teacher and a food service worker, settling for minimum wage jobs as she hunts for work in her field. She takes in about $1,800 a month. After paying her bills, she has about $100-$200 leftover each month. She puts money toward her debts and treats herself to small luxuries — a passion fruit papaya green tea from Panera Bread, coffees here and there, and the occasional dinner out with her partner — before saving about $50 a month.
- Income: $1,800
- Bills (car payment/insurance/cellphone, etc.): $1,200
- Rent: $300
- Gas: $100
- Groceries: $50
- Discretionary spending: $150
- Savings: $50
She’s applied for about 80 jobs since graduating in 2023. Passionate about social justice, she hopes to do creative work for a nonprofit, but her dream is to be a documentary filmmaker.
“Growing up poor, the TV is your babysitter,” she says. “Film was my escape, the only entertainment that I had. You shouldn’t be forced to do something you don’t want to do for most of your life. You should be able to be in a field that you’re interested in, that makes you feel fulfilled.”
To Baldwin, Americans aren’t always living paycheck to paycheck because of conscious financial choices. It’s often a circumstance someone has no control over. She’s hopeful that she’ll be able to advance her situation soon, once she can start her career.
“Once I get a good job, I will have gone from poverty to middle class,” she says. “When you grow up poor in this country, it’s just a disadvantage. A lot of the prescriptives that come out about economics and finance assume someone grew up stable. But if you want a good future, you have to be able to afford to save money. We don’t have equal opportunity and economic social mobility, and people need to realize that. This idea that anybody from anywhere can become a millionaire, that facade needs to go away.”
From hot inflation to higher expenses, Americans have many reasons for living paycheck to paycheck
Americans are finding it hard to invest in their futures as they struggle to afford their day-to-day expenses in the present. More than a quarter (27 percent) of Americans have no emergency savings at all, the highest percentage since 2018, Bankrate’s emergency savings data shows. Nearly 3 in 10 (29 percent) have some level of emergency savings, but not enough to cover three months’ worth of expenses. Even fewer (16 percent) have enough to cover between three and five months of expenses, the lowest level since 2016.
Meanwhile, in 2023, over half of workers (56 percent) said they felt behind on their retirement savings, including 37 percent who said they felt they were “significantly behind,” a Bankrate poll published in September found. About 1 in 5 workers (or 22 percent) said they weren’t making retirement contributions in 2023 or 2022.
Americans are indicating that their incomes just aren’t high enough to live comfortably, with 6 percent of Americans who have an idea of their specific financial comfort number saying they’re currently making the money they feel they need, according to Bankrate’s Financial Freedom Survey. To the average American, the income they believe they need to be comfortable is $186,000 annually, the survey found. Among the average employed American, that rises to $194,000.
But Americans’ feelings of living paycheck to paycheck could have just as much to do with too-high expenses as insufficient income. Over a third of American households (36 percent) have more credit card debt than emergency savings, the highest percentage since polling began in 2011 and the second consecutive year that their debt outstrips their income, according to Bankrate’s Emergency Savings Report.
How to break the cycle of living paycheck to paycheck
Saving for the future feels tough when you’re barely covering expenses.
Learn morePricier essentials are no doubt contributing to that rising debt — at a time when credit card rates are among the highest levels ever recorded, Bankrate’s historic data shows. Yet, more than a third (38 percent) said they would be willing to go into debt for a discretionary purchase this year, according to Bankrate’s Discretionary Spending Survey from May.
“Americans for decades have been, broadly speaking, great spenders, but not good savers,” McBride says. “Breaking the paycheck-to-paycheck cycle means cutting expenses, increasing income, or a combination of the two.”
Few workers are feeling satisfied with their pay
One reason many workers might feel like they’re living paycheck to paycheck: About 1 in 4 (or 24 percent) feel that they are not compensated fairly for their work, while 19 percent feel underpaid compared to their peers with the same work experience and qualifications.
Those sentiments are even higher among those who feel that they’re living paycheck to paycheck.
- More than 1 in 3 workers who feel they’re living paycheck to paycheck (36 percent) say they are not compensated fairly for their work, versus 18 percent for those who didn’t indicate that they’re living paycheck to paycheck; and
- Less than a third of workers (29 percent) feel they are underpaid compared to their peers with the same work experiences and qualifications, versus 14 percent for those who didn’t say they’re living paycheck to paycheck.
Living paycheck to paycheck can make someone feel less satisfied at work. Of the workers who say they’re living this way, just 9 percent are satisfied with how much they’re paid — down drastically from the 19 percent of workers overall who feel this way about their paychecks. Just 11 percent are satisfied with their opportunities for promotion at work, versus 16 percent of workers overall.
But workers’ job satisfaction might also have more to do with how much they’ve progressed in their careers. Baby boomer and Gen X workers are more likely to say they feel satisfied with how much they are paid (at 26 percent and 20 percent, respectively). That compares with 16 percent of both millennial and Gen Z workers.
Meanwhile, millennial workers are the most likely to feel they are not fairly compensated for their, at:
- 28 percent of millennial workers; versus,
- 24 percent of Gen Z workers;
- 23 percent of Gen X workers; and
- 19 percent of baby boomer workers.
Yet, millennial workers were also the most likely to say they feel satisfied with their opportunities for promotion at work (at 18 percent), versus 16 percent of Gen Zers, 16 percent of Gen Xers and 9 percent of baby boomers (the least likely of any demographic).
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Unsurprisingly, higher-income workers are most likely to feel satisfied with how much they are paid, middle-income Americans are most likely to feel they are not compensated fairly for their work and lower-income Americans are most likely to feel that they’re underpaid compared to their peers with the same work experience and qualifications.
Career sentiment Making under $50,000 a year Earning between $50,000-$79,999 a year Making between $80,000-$99,999 a year Earning $100,000 or more a year I feel satisfied with how much I am paid 12% 17% 25% 31% I feel satisfied with my opportunities for promotion at work 12% 11% 19% 26% I feel I am underpaid compared to my peers with the same work experience/qualifications 22% 17% 19% 17% I feel I am not compensated fairly for my work 28% 22% 33% 19%
‘A lot of people work hard but are barely making it’
When single mom Michelle Rodriguez started her career in 1998, she assumed picking up extra shifts, moving up the ladder and making as much money as she could would be the secret to affording basic necessities for her and her daughter.
Instead, each raise ended up making her situation feel worse. Eventually, she started earning too much money to qualify for any government assistance, even as she still didn’t make enough to feel financially comfortable.
“You’re doing everything right, you have your salary, you’re trying to save, trying to do everything, but those of us in the middle often have to pick and choose,” she says. “I had to choose between putting myself in the same situation — in which I worked hard but lived paycheck to paycheck to be able to afford [my daughter] — or work as hard as I could to be responsible for my own accommodations. I chose to keep working as hard as I could to get myself out of that rut, but you were falling through the cracks.”
Rodriguez’s daughter needs special health care accommodations, including weekly therapy and frequent visits with specialists.
When Rodriguez started off as a store associate making $5.75 an hour, government assistance helped cover most of her daughter’s doctor’s visits, including to gastroenterologists, neurologists and more. Her housing and day care costs were also subsidized.
But her budget still felt tight. Eventually, Rodriguez worked her way up to store manager, her salary peaking at almost $200,000 in her later years. But as she grew her earnings, her aid began evaporating. She estimates she eventually ended up spending about $700-$900 a week on her daughter’s care.
To limit expenses, she rarely saw doctors for her own ailments. Rodriguez remembers a time when her daughter needed a colonoscopy, the copay alone costing $2,000.
“I found myself pondering, should I even go through with it?” she says. “But how could that be a choice, when you have to do it for your child.”
Now, Rodriguez is 50, while her daughter is grown and on California’s Medi-Cal insurance assistance plan. Yet, she finds herself in a similar situation. She quit her job in 2023 because she needed an operation on her leg that she’d been putting off, and the recovery time was going to take between six months to a year. She’s relying on her retirement investments to help get through the spell of unemployment while applying for jobs in retail again. Feeling burned out by her previous job, she’d rather find something new. But these days, the best positions she can find pay about $20-$30 an hour.
“How does one afford anything on that?” she says. “I don’t want to see my life savings dwindle, but I’m afraid that I’ll go back to work and ends aren’t going to meet. I’ll be in the same situation I was in when I first started. A lot of people work hard but are barely making it.”
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Bankrate commissioned YouGov Plc to conduct the survey. All figures, unless otherwise stated, are from YouGov Plc. The total sample size was 2,407 U.S. adults, among whom 1,249 are employed. Fieldwork was undertaken between May 16-20, 2024. The survey was carried out online and meets rigorous quality standards. It employed a non-probability-based sample using both quotas upfront during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results.
