Although inflation has slowed, Americans are still feeling its effects. According to a recent study by PYMTS and LendingClub, 61% of consumers were living within their paychecks in April 2023.
Even those earning well above the US average annual income of $58,563 struggled to stay on top financially. In fact, the report found that 49% of individuals earning more than $100,000 a year were living on their April paycheck. This is a 7% increase compared to April last year.
In comparison, the study found that low-income consumers, or those earning less than $50,000 a year, “adjust their spending to reduce inflationary pressures and enable them to live better within their means.” It turned out that. As of April 2023, 73% of low-income consumers were living paycheck to paycheck, down from 80% last year. Among individuals earning between $50,000 and $100,000 a year, 63% were found to be living paycheck to paycheck, a decrease of just 1% from the previous year.
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Where you live also affects how far your money reaches you. The report found that although 36% of consumers earning six-figure salaries live in urban centers, those living in urban areas are the most likely to live paycheck to paycheck ( 69%).
Meanwhile, consumers who live in suburban areas are the least likely to live paycheck to paycheck (55%). It was found that just under two-thirds of rural consumers live paycheck to paycheck.
Trends in the report also show that rising costs of living are impacting Western consumers the most. From April 2022 to April 2023, the proportion of Western consumers living paycheck to paycheck rose from 59% to 64%. Fewer city dwellers in the South are living within their paychecks than in other parts of the country.
Below, we show you what percentage of urban consumers live paycheck to paycheck, depending on which region of the United States they live in.
| All urban consumers | 69.2% |
| northeast | 72.2% |
| Midwest | 73.1% |
| West | 72.0% |
| south | 61.9% |
Another report from SmartAsset reveals the cities where money is traveling the furthest. Workers earning $100,000 a year will earn the most cash in Memphis, Tennessee, where they'll earn $86,444 in take-home pay after taxes and cost of living. Meanwhile, in New York City, $100,000 equates to just $35,791. Additionally, some cities are experiencing higher inflation rates than others.
Overall, the report found that “consumers face different economic challenges depending on where they live, resulting in them struggling to paycheck to paycheck, with urban dwellers especially at the forefront. It shows that there is a strong tendency. Below, our data shows the percentage of consumers who cite the most important reason for living paycheck to paycheck.
| Header Cell – Column 0 | urban area | suburban area | rural area |
|---|---|---|---|
| Salary only covers basic bills | 25.3% | 25.2% | 33.3% |
| have to repay a large amount of debt | 14.6% | 19.5% | 18.1% |
| I have to pay other family members' expenses as well. | 16.4% | 16.2% | 11.2% |
| buy items you don't need | 15.5% | 15.2% | 12.7% |
| used up a large portion of my savings | 10.6% | 7.9% | 8.3% |
| I don't have enough income to cover the basic fees. | 4.7% | 5.6% | 5.7% |
| have to pay large medical expenses | 5.8% | 3.5% | 4.8% |
| unstable employment situation | 5.2% | 2.3% | 2.4% |
| other | 1.9% | 4.6% | 3.5% |
