Breeze Logo

How many Americans live paycheck to paycheck in 2024?

Reviewed by
Read time
7 mins

Though we’re not yet living in what could be called a “post-pandemic” world, we are living in a time where the stock market is at, or near, record-high levels, popular restaurants are again close to full capacity, and the number of Americans traveling by air is soaring.

Almost all indicators are pointing to a solid economic recovery. Yet, an astounding number of Americans are living paycheck to paycheck, which financial guru Dave Ramsey defines as “all your money comes in and goes right back out again by the end of the month.”

What percentage of Americans live paycheck to paycheck?

During the height of the pandemic in 2020, the Washington Post published an article revealing some startling numbers about the millions of Americans living paycheck to paycheck:

  • According to data compiled by Nielsen, the American Payroll Association, CareerBuilder, and the NEFE, between 50 percent and 78 percent of employees earn just enough to pay their bills each month. Missing a paycheck for them means living with overdue bills.
  • The January 2020 Financial Security Index survey showed that 40 percent of U.S. adults would cover the cost of a $1,000 emergency room visit using savings, and Gallup released in December 2020 that one-third of Americans say they or a family member didn’t pursue treatment for a medical condition in the past year because of cost.
  • The Federal Reserve Bank determined in 2019 that nearly 40 percent of adults in the U.S. wouldn’t be able to cover a $400 emergency with cash, savings, or a credit card that they could quickly pay off.

These statistics are primarily pre-pandemic numbers. Many economists believe that despite the stimulus checks Americans received in 2020-2021, their financial security has continued to decline since the onset of COVID.

Disability insurance protects your paycheck. Get an instant quote here!

Millennials living paycheck to paycheck

According to a recent survey by PYMNTS, 70 percent of millennials say they’re living paycheck to paycheck. This is despite the average salary of a millennial being over $47,000 per year in 2020, according to the U.S. Census Bureau. By contrast, 40 percent of baby boomers and seniors said they live paycheck to paycheck, the least of any generation.

Why the disparity? Many millennials are at the stage in their lives, particularly older millennials, where they’re starting families and buying homes and new vehicles, and many are less advanced in their careers than their more senior counterparts. Their expenses are at an all-time high, and, in many cases, their earnings haven’t kept up.

Why do people live paycheck to paycheck?

It’s been said that “the more things change, the more they stay the same.” This holds true for many areas of life, including personal finances. The same pitfalls of the 1970s are just about the same today. Here are five of them.

Keeping up with the Jones’

The neighbor next door doesn’t have one new BMW; they have two. Most of the people in your department are wearing designer clothes. Your old college roommate just made a down payment on a stately five-bedroom home.

Someone will always have a nicer car, a bigger home, fancier clothes, or “something better” than anything else you take pride in. Trying to keep up with them ultimately hurts your bank account and leaves you with payments you can’t always make.

No emergency fund

There will always be that unexpected expense: the hefty health insurance deductible that needs to be met right away, a new dishwasher, transmission replacement, and other events that always seem to happen at the wrong time for your bank account balances.

[ Related: How much emergency fund should I have? ]

Impulsive spending

It’s amazing when we move how much “stuff” we’ve accumulated that we never really needed, rarely used, and don’t want to bring with us. Buying large ticket items without shopping around and waiting at least a week before you make your purchase often leads to spending money on “wants,” not “needs.”

Ignoring account statements

Many people bury their heads in the sand when it comes to reading their bank and credit card statements. One wise financial counselor once said, “Ignorance is not bliss; it’s financial ruin.” Many people live paycheck to paycheck because they simply aren’t aware of their financial situation, then end up making the minimum payment on their credit cards.

Failing to think like an investor

Most people think purely as a consumer and don’t think of themselves as also being an investor. As a result, they don’t take advantage of retirement savings plans with tax advantages or put money aside to invest in their children’s future education. Their focus isn’t on the future, only today.

[ Related: What is a 529 college savings plan & how do you start one? ]

Fortunately, most personal financial problems can be remedied over time with dedication and self-discipline. Here are some strategies that have proven successful for many people.

How to stop living paycheck to paycheck

It takes time to right your financial ship and establish a surplus of money each month instead of a deficit. However, many good resources online and at bookstores provide a roadmap for debt reduction and elimination. These are just a few moves that can end the cycle of excess debt.

Reduce your expenses

Have gym memberships you don’t use? Have you developed an online shopping addiction? Dining out way too often? Track every penny you spend over the next thirty days. Then, when you look at what you spent your paycheck on, there should be some things on the list that you’ll know you didn’t need.

[ Related: How to live within your means in 2021 ]

Get a second job or a side hustle

If you can’t reduce your expenses, you have to increase your income. Many people have dug themselves out of a hole by taking a part-time job until their credit card balances were paid off or they had six months of income saved up in case of emergencies. Some forward thinkers have turned a hobby into a side hustle, like photography or making clothes or crafts. Websites like Etsy can provide a multitude of ideas on things you could make or do to bulk up your bank account.

[ Related: 10 practical side hustle ideas to make extra money in 2021 ]

Pay yourself first

Ten percent of every paycheck should be allocated towards your future, whether through your 401(k) plan at work or an individual Roth IRA. The earlier you start, the better, because of the eighth wonder of the world — compound interest. If you can’t start with ten percent, start with five percent. The most important thing is that you get started.

[ Related: How much money should I have saved by 30, 40, 50 & 60? ]

Final thoughts

No one ever plans on living paycheck to paycheck; it’s one of those things that “just happens.” But, continuing to live in that mode can beat you down mentally and emotionally.

If you’re struggling to make ends meet every month, use some of the strategies mentioned above and get with a financial planner who can help you develop a budget and a savings plan. It’s a good investment in your future.

The information and content provided herein is for educational purposes only, and should not be considered legal, tax, investment, or financial advice, recommendation, or endorsement. Breeze does not guarantee the accuracy, completeness, reliability or usefulness of any testimonials, opinions, advice, product or service offers, or other information provided here by third parties. Individuals are encouraged to seek advice from their own tax or legal counsel.

— Published September 8, 2021
Related Articles

Get started online — anytime, anywhere.

(Seriously, it's a breeze.)