Most millennials live paycheck to paycheck as even those with six-figure salaries claim they scrape by, new survey says

53 per cent of Americans and 70 per cent of millennials now live paycheck to paycheck report says

70 per cent of US millennials, even those with higher salaries, say they live paycheck to paycheck (Getty Images)

A new survey has found that the majority of Americans live paycheck to paycheck, and the problem is worst for millennials – and it’s not just about lifestyle choices.

The report, published by Pymnts and LendingClub in June, found that 54 per cent of Americans have little money left over each month after bills and other regular expenses.

While living paycheck to paycheck may be a problem usually associated with low-income earners, the survey of 29,000 people found that 53 per cent of those who earn between $50,000 and $100,000 per year live on a constrained budget.

Even 40 per cent of those who earn more than $100,000 said that have little extra money each month. For those who earn less than $50,000, that figure is as high as 72 per cent of respondents.

Generationally, as many as 70 per cent of millennials report living on a month-to-month cycle, with a third struggling to pay their bills.

The report proposes that older millennials are at a stage in their lives where they may be starting families or making major purchases such as a home or new vehicle, which will constrain their budgets.

This generation also contends with income levels that haven’t kept pace with huge increases in the cost of living, combined with a doubling of the cost of education since their parents were in college.

For example, a 35-year-old college graduate could be earning in excess of $100,000, however, expenses such as student loan debt, a mortgage, or a child, will leave little money for emergencies or major purchases.

When compared to other generations, 40 per cent of Baby Boomers and seniors, 56 per cent of Generation X, and 56 per cent of Generation Z responded that they were living paycheck to paycheck.

Some millennials also fall victim to “lifestyle creep”, when an increase in income is met with greater outgoings on expensive purchases or aspirational changes in behaviour. This group was termed the “Henrys” by Shawn Tully in a 2003 Fortune article — an acronym for “high earner, not rich yet”.

The economic upset of the coronavirus pandemic has only exacerbated the situation for those who struggle from paycheck to paycheck, but government-funded stimulus payments proved a crucial source of support for many.

Data from the survey shows that the percentage living paycheck to paycheck was at its greatest in late March 2020 at 66 per cent, but declined sharply after each stimulus payment.

Surprisingly much of this extra money was used to bolster savings, with the average for those who live paycheck to paycheck increasing by 2.5 times.

This goes some way to dispelling the myth of frivolous spending of stimulus checks by those who received them.

Savings levels fell again after April 2021 as the US economy began to reopen and people felt more comfortable spending money.