The Data Point: Life-Cycle Events Impact Paycheck-to-Paycheck Status for 51% of Millennials

Until quite recently, the term “paycheck-to-paycheck” conjured images of subprime consumers with especially bad money management skills. We now know that this portrait is far from accurate, with our data finding 58% of all U.S. consumers just making ends meet.

That number includes almost one-third of Americans making over $250,000 a year, so it’s a problem that besets every demographic, and everyone from hourly workers to top executives.

In “New Reality Check: The Paycheck-To-Paycheck Report - Financial Distress Factors Edition,” a PYMNTS and LendingClub collaboration, a survey of more than 3,700 U.S. consumers and part of a study series tracing paycheck-to-paycheck trends since 2021, we find that major life events — joyous or catastrophic — often create an outsized drain on paychecks at most levels.

What shouldn’t be lost in the cold fact of paycheck-to-paycheck living is that there is an occasional bright spot where we see rays of positivity, though the core issue is obstinate.

Get your copy: New Reality Check: The Paycheck-To-Paycheck Report - Financial Distress Factors Edition

• The share of consumers living paycheck to paycheck and struggling to pay bills dropped slightly, from 21% in May 2021 to 19% in May 2022.

Based on our census-balanced survey, 58% of all U.S. consumers reported living paycheck-to-paycheck in May 2022, but that’s a slight improvement on the 61% who said so in May 2021.

PYMNTS places paycheck-to-paycheck consumers into two categories: those who struggle to pay bills and those who do not. Per the study, “In May 2022, 39% of consumers were living paycheck to paycheck without difficulties paying monthly bills — an increase from 33% in May 2021. Meanwhile, the share of those living paycheck to paycheck with issues paying their bills dropped slightly, shifting from 21% in May 2021 to 19% in May 2022.”

• 51% of millennials experienced “life-cycle events” such as marriage or having a child in the last three years, impacting their paycheck-to-paycheck status

 

Life-altering events like job loss and health problems come with a special set of challenges. Life-cycle events are those that we willingly pursue — marriage, buying a home, having a child — and these happy events nevertheless impact one’s ability to cover monthly expenses.

PYMNTS research found that “Life-cycle events, such as marriage or having a child, are the most common events, with 38% of consumers having experienced these situations in the last three years. The share jumps to 51% among millennials but drops to 30% among baby boomers and seniors. Among paycheck-to-paycheck consumers with issues paying their bills, 48% experienced a life-cycle event, while 42% of paycheck-to-paycheck consumers without difficulties paying their bills did as well.”

Get yours: New Reality Check: The Paycheck-To-Paycheck Report - Financial Distress Factors Edition