Living Paycheck to Paycheck | Crown Financial Ministries (2024)

FAQs

How do you beat living paycheck to paycheck? ›

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.

The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. The savings category also includes money you will need to realize your future goals.

According to PYMNTS Intelligence, 62% of U.S. consumers now live paycheck to paycheck, and that includes 48% of consumers earning more than $100,000 annually.

Sizable portions of high earners live paycheck to paycheck.

The increase in consumers living this financial lifestyle is evident across income brackets. The share of consumers living this financial lifestyle and annually earning more than $100,000 has increased from last January, currently standing at 48%.

You're not alone. A majority of Americans (59 percent) report that they live paycheck to paycheck. Stressing about finances can go far beyond the wallet. It can seep into every aspect of your life and manifest itself as generalized anxiety, guilt, panic attacks, or trouble sleeping at night.

Living paycheck to paycheck demographics

According to a recent PYMNTS report, as of November 2022, 76 percent of U.S. adults who make less than $50,000 are living paycheck to paycheck, compared to 65.9 percent of those making $50,000 to $100,000 and 47.1 percent making more than $100,000.

The findings of a new survey from Bankrate.com include that 27% of respondents have no emergency savings and 59% of those who do are not comfortable with what they have accrued including almost one third who are very uncomfortable.

making $4,000 a month using the 75 10 15 method. 75% goes towards your needs, so use $3,000 towards housing bills, transport, and groceries. 10% goes towards want. So $400 to spend on dining out, entertainment, and hobbies.

How much savings should I have at 50? ›

By the time you reach your 40s, you'll want to have around three times your annual salary saved for retirement. By age 50, you'll want to have around six times your salary saved. If you're behind on saving in your 40s and 50s, aim to pay down your debt to free up funds each month.

At least 20% of your income should go towards savings. Meanwhile, another 50% (maximum) should go toward necessities, while 30% goes toward discretionary items.

Based on that figure, an annual income of $500,000 or more would make you rich. The Economic Policy Institute uses a different baseline to determine who constitutes the top 1% and the top 5%. For 2021, you're in the top 1% if you earn $819,324 or more each year.

14% of Americans Have $100,000 Saved for Retirement

Most Americans are not saving enough for retirement. According to the survey, only 14% of Americans have $100,000 or more saved in their retirement accounts. In fact, about 78% of Americans have $50,000 or less saved for retirement.

Inflation, lack of savings and credit card debt

Among those who consider themselves to be living paycheck to paycheck, financial stressors vary. Their worries are not surprising. Inflation has been rising in 2024, according to the Bureau of Labor Statistics, even if incrementally.

These include: No money is saved to handle emergencies. Interest costs from borrowing money to cover unexpected expenses adds to the financial burden and monthly budget.

50% of your net income should go towards living expenses and essentials (Needs), 20% of your net income should go towards debt reduction and savings (Debt Reduction and Savings), and 30% of your net income should go towards discretionary spending (Wants).