More Americans are living paycheck to paycheck than 5 years ago, Bank of America data shows
Storch Advisors CEO Gerald Storch examines the consumer landscape, offers his opinion on the holiday season, and reacts to the September retail sales report.
The share of US households living paycheck to paycheck has grown across all income brackets over the past five years, according to a new study by the Bank of America Institute.
A new analysis released by the think tank on Tuesday found that more than a quarter of Americans, 26%, have necessary expenses that chew up more than 95% of their take-home income, and nearly a third, 30%, of families spend more than 90% of their income on debt. essentials such as groceries, housing, utilities, gas, insurance and childcare.
A new study by the Bank of America Institute found that more Americans will live paycheck to paycheck in 2024 compared to 2019. (iStock / Stock)
The data showed a 10% increase in those living wages to pay in 2024 compared to 2019.
Regardless of the survey’s interpretation, nearly half of Americans currently feel they are living paycheck to paycheck, the BofA Institute found. That number has been rising for at least the past two years.
| A ticker | Security | Finally | Change | Change % |
|---|---|---|---|---|
| BAC | BANK OF AMERICA CORP. share price. | 41.89 | -0.76 |
-1.78% |
INFLATION SAYS $2.5T IN PENSION PLANS DESPITE GROWTH IN RETIREMENT ACCOUNTS, EXPERT SAYS.
David Tinsley, chief economist at the Bank of America Institute and lead author of the study, says it’s hard to say exactly how much inflation has contributed to the increase, but increases in the price of necessities like groceries are clearly the most important factor.
Americans are increasingly living paycheck to paycheck according to a new study. (Amy Beth Bennett/South Florida Sun Sentinel/Tribune News Service via Getty Images / Getty Images)
“In some households, the increase in income will be accompanied by inflation, protecting it,” he told FOX Business. “But, for some people who are already living paycheck-to-paycheck, this may be less, meaning many are caught in the net.”
Low-income families were predictably most affected, with 35% of those making less than $50,000 a year falling into that category, but all income brackets indicated that at least 20% had little money left over after spending the required amount, including those making more of $150,000.
AMERICANS OWE RECORD $1.14T IN CREDIT CARD DEBT AS INFLATION STRESSES
The share of families living paycheck to paycheck has grown with every generation from Gen Z to the Baby Boomers, but has declined further among those born before 1946.
A new study by the Bank of America Institute found that Baby Boomers make up half of the population living paycheck to paycheck for all generations, and then slowly decline. (Tom Williams/CQ-Roll Call, Inc via Getty Images/Getty Images)
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“Inflation has affected all incomes and generations, so it’s no surprise we’re seeing an increase in the share of people living paycheck to paycheck across all income groups,” Tinsley said. “Housing costs are a significant factor with older generations and those with higher incomes tend to have larger debts, which means some can live paycheck to paycheck even on higher incomes.”
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