Majority of Americans Live Paycheck To Paycheck – Forbes Advisor

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As living expenses in the U.S. continue to rise and wages struggle to keep up, it’s unsurprising that Americans of all generations are having a hard time financially. For many, this means living paycheck to paycheck.

But what does it really mean to live paycheck to paycheck, and what underlying factors are driving this trend?

Definition of “Living Paycheck to Paycheck”

The term “living paycheck to paycheck” gets thrown around a lot when talking about money. But what does it mean?

For the purposes of this survey, living paycheck to paycheck describes a financial scenario in which an individual or family’s income barely covers essential living expenses like housing, utilities, groceries and transportation. One missed paycheck would put someone living paycheck to paycheck in a difficult spot.

When you’re living paycheck to paycheck, it’s difficult or impossible to save, let alone invest. This makes you even more vulnerable in times of emergency or lost income.

How Many Americans Are Living Paycheck to Paycheck?

A 2023 survey conducted by highlighted that 78% of Americans live paycheck to paycheck, a 6% increase from the previous year. In other words, more than three-quarters of Americans struggle to save or invest after paying for their monthly expenses.

Similarly, a 2023 Forbes Advisor survey revealed that nearly 70% of respondents either identified as living paycheck to paycheck (40%) or—even more concerning—reported that their income doesn’t even cover their standard expenses (29%).

Which Generation is Most Likely to Live Paycheck to Paycheck?

Certain generations struggle more than others when it comes to living paycheck to paycheck. For example, nearly half (49%) of Baby Boomer respondents—who are nearing retirement or already retired—say they’re living paycheck to paycheck. That’s a higher percentage than any other generation.

Meanwhile, Millennials were the least likely to report living paycheck to paycheck, with less than 40% making this claim.

How Are Families Impacted by Living Paycheck to Paycheck?

Unsurprisingly, family size impacts whether or not you live paycheck to paycheck. However, the relationship between family size and the likelihood of living paycheck to paycheck isn’t exactly straightforward.

Our survey found that respondents with one child had the most significant challenges. More than half of these respondents reported living paycheck to paycheck. However, families with five or more children reported the lowest incidence of living paycheck to paycheck—less than 28%.

What’s Causing Americans To Live Paycheck to Paycheck?

More Americans experienced an increase in spending rather than an increase in income in 2022, according to the Federal Reserve’s report on the economic well-being of U.S. households. Two-fifths, or 40%, of adults reported an increase in their family’s monthly spending compared to the previous year.

Why the increase in spending? Respondents to our 2023 survey cited high monthly expenses—including rent or mortgage, insurance, utilities and more—as the primary cause of living paycheck to paycheck. Yet examining the data by generation highlights some age-related patterns.

64% of Gen Zers Cited High Monthly Living Expenses

The highest percentage of Gen Z respondents (65%), the oldest of which are still relatively new to the workforce, say high monthly living expenses are among the primary reasons they’re living paycheck to paycheck. Based on their age, many members of this generation are likely just starting to pay for their own living expenses, but their peak earning years may be a ways in the future.

57% of Millennials Cited Lack of Budgeting and Financial Planning

Meanwhile, 57% of Millennials say a lack of budgeting and financial planning is the primary reason they’re living paycheck to paycheck. The second most common reason among this generation is high monthly bills, with about 50% of respondents selecting this answer.

44%  of Gen Xers Reported Low Income

When asked to select the top three causes of living paycheck to paycheck, the highest percentage of Gen X respondents selected low income (44%) and high monthly bills (44%). A lack of budgeting and financial planning was the third most common reason Gen Xers say they’re living paycheck to paycheck.

64% of Baby Boomers Cited Rises in Cost of Living

Nearly 65% of Baby Boomer respondents, who’ve been around longer than the other generations surveyed, cite a rising cost of living—including transportation and groceries—as one of the top reasons they’re living paycheck to paycheck. The second most common reason among this generation for living paycheck to paycheck was high monthly bills (51%), followed by low income (50%).

How Much Do Those Living Paycheck to Paycheck Have in Savings?

Americans spend, on average, $3,372 per month on essential expenses like housing, healthcare, food, transportation and taxes. Unfortunately, the majority of survey respondents have less than this amount in savings—meaning if they had to rely on their savings in a time of emergency, they’d have a hard time making it through a single month.

71.93% of Americans Living Paycheck to Paycheck Have $2,000 or Less in Savings

Less than 15% of our survey respondents living paycheck to paycheck reported having more than $2,000 in savings. Roughly one-quarter of respondents living paycheck to paycheck have between $1 and $1,000 in rainy-day savings, while nearly half (47%) have between $1,001 and $2,000 squirreled away.

There are disparities across generations. Gen Zers as a whole (including those living paycheck to paycheck and those not) have the least amount in savings compared to other generations: Nearly 69% have less than $2,000. Given this generation has the fewest number of working years under their belt, this data isn’t too surprising.

Baby Boomers, on the other hand, were most likely to report having more than $2,000 saved for emergencies, with 35% of Boomer respondents indicating this. These numbers underscore the major challenge many Americans—especially those living paycheck to paycheck—face when it comes to saving.

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How Respondents Living Paycheck to Paycheck Plan To Save Money

When living paycheck to paycheck, there’s little wiggle room in your budget—if any. When asked how they save money, respondents cited three major strategies. Nearly 63% of respondents say making food at home and packing food when going out is their primary way of saving money. The second most common way to save was cutting back on nonessential expenses (57%), followed by shopping secondhand (50%).

Methods To Avoid Living Paycheck to Paycheck

No one wants to live paycheck to paycheck forever, but it’s a hard cycle to break. We asked survey respondents which strategies they plan to use to avoid living paycheck to paycheck in the future, and the most common response was reducing expenses—cited by more than half of participants (53%).

Again, responses differed by generation. More than three-quarters (78%) of Gen Zers said reducing expenses was their favored strategy. Millennials (52%), Gen Xers (53%) and Baby Boomers (55%) agreed. Interestingly, the majority of respondents from the Silent Generation (70%) preferred creating a budget to avoid living paycheck to paycheck in the future.

Extreme Measures Americans May Take To Escape Living Paycheck to Paycheck

In addition to creating a budget and reducing expenses, some of our survey respondents were willing to take extreme measures to escape living paycheck to paycheck.

Interestingly, the youngest and oldest generations we surveyed were the most likely to take dramatic measures. Nearly half (49%) of Gen Z and 43% of Silent Generation respondents were inclined to relocate to a more affordable state or country or take other similar measures to break the paycheck-to-paycheck cycle.

The measures respondents are willing to take also varied based on family size. Families with more children showed more of an inclination to relocate to avoid living paycheck to paycheck—in fact, those with four or more children reported the highest inclination to pack up and go (61%).

While it’s clear some respondents are willing to make major lifestyle changes to avoid living paycheck to paycheck, survey results show this willingness is higher among specific demographics.


Forbes Advisor 2023 Survey: How Many Americans Are Living Paycheck To Paycheck? Increase in Americans Living Paycheck to Paycheck in Just One Year
Federal Reserve Board: Economic Well-Being of U.S. Households in 2022

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