As inflation and one possible recession household budgets continue to shrink, the share of Americans who report living paycheck to paycheck – meaning they use all or most of their income to pay for expenses each month, without saving – increases, especially among high earners.
Having an emergency fund is now more important than ever
By putting money aside in a savings account, you will be prepared for any emergency that may arise. Click on your state and get started.
Numbers
About 64% of American consumers lived to salary in December, according to the results of a new investigation nearly 4,000 people from financial publication PYMNTS.com and online lender Lending Club.
That suggests an increase of 9.3 million Americans from a year ago, when 61% of people said they live paycheck to paycheck.
Go further
Of those additional 9.3 million people, PYMNTS found that 8 million are people earning more than $100,000 a year. This means that much of the increase in the share of consumers living paycheck to paycheck is due to those at the higher end of the income spectrum:
- In December, 51% of people earning more than $100,000 a year said they lived paycheck to paycheck, up from 42% a year earlier.
The survey results also show that it is increasingly difficult for this group to cover their expenses:
- 16% said it was difficult to pay their bills each month in December 2022, compared to 11% in December 2021.
An emergency fund is an essential part of everyone’s financial plan
Opening a savings account to start an emergency fund makes a lot of sense for times like these. Click below to open an account and start saving!
money tips
As prices continue to rise, those who have problems with essential bills every month should not hesitate to ask for help — whether it’s a trusted financial expert, government program, or local food bank.
And even with a very tight budget, the financial experts recommend set aside whatever you can each month – even if it’s just $5 – to build a emergency fund and help reinforce the habit of saving automatically.
More money :
The secret to saving the perfect amount of money every time you get paid
How to save for retirement even when you’re in your 20s and broke
Your emergency fund is probably too small now (thanks, inflation)