Consumers hailing from all income brackets are feeling mounting pressure from rising inflation and economic uncertainty. PYMNTS’ research finds that 58% of United States consumers lived paycheck to paycheck in May 2022, a four percentage-point increase from May 2021. 
Slightly less than one in three consumers who earned $250,000 or more annually reported living paycheck to paycheck, a slight decrease from April 2021. One in five U.S. consumers struggled to meet their monthly financial obligations.
Our data also reveals that 65% of paycheck-to-paycheck consumers have experienced a financially stressful event in the past three years, with sudden income disruptions such as losing a job being the most common. Half of paycheck-to-paycheck consumers say their salary only covers basic expenses and is one reason behind their financial distress. Paycheck-to-paycheck consumers in upper-income brackets are also likely to cite paying for a family member’s expenses as a driver of financial distress.
These are just some of the findings to emerge from this edition of “New Reality Check: The Paycheck-To-Paycheck Report,” a PYMNTS and LendingClub collaboration. The Financial Distress Factors Edition examines the financial lifestyle of U.S. consumers who live paycheck to paycheck, the factors that cause financial distress and the impact of financial stressors on their ability to access credit and other expense management. The series draws on insights from a survey of 3,708 U.S. consumers conducted from May 10 to May 23, as well as an analysis of other economic data. 
More key findings from the study include:
More than half of the U.S. population — nearly 150 million adults — currently live paycheck to paycheck, making it the most common financial lifestyle in the U.S. Fewer consumers in the highest income brackets reported living paycheck to paycheck in May 2022 compared to April 2022. The share of consumers annually earning $250,000 or more living paycheck to paycheck decreased from 36% to 30%.
While the share of consumers living paycheck to paycheck across incomes has decreased slightly, the share among low- and middle-income consumers has risen year over year. Seventy-seven percent of those annually earning less than $50,000 and 62% annually earning $50,000 to $100,000 were living paycheck to paycheck in May 2022, up from 72% and 53%, respectively, in May 2021.
A significant portion of U.S. consumers have experienced financial stressors in the past three years, with 38% facing a life-cycle event such as retirement or moving residences and 33% experiencing a life-altering event such as job loss or disability. Consumers living paycheck to paycheck are more likely to have faced a financially distressing event. In the past three years, 54% of consumers experienced events that caused financial distress, with paycheck-to-paycheck consumers more likely to do so (65%). 
Paycheck-to-paycheck consumers struggling to pay bills each month are particularly likely to have experienced such occurrences (77%), while fewer of those without difficulties paying bills have experienced such events (60%). The share drops to just 38% among those individuals not living paycheck to paycheck.
One in five consumers living paycheck to paycheck have spent more than what they have earned in the last six months, with those struggling to pay bills seeing their savings cut in half during the past year. PYMNTS’ research finds that 19% of consumers living paycheck to paycheck have spent more than what they have made in the last six months, compared to 2.2% among consumers not living paycheck to paycheck.
Among those earning more than $250,000 a year, 7% have spent more than what they have made in the last six months. While low income is cited as a cause of financial distress, paycheck-to-paycheck consumers from high-income brackets and large households cite paying for a family member’s expenses as a driver of financial distress.
To learn more about how paycheck-to-paycheck consumers in the top income brackets are faring in today’s changing economic times, download the report.