As millennials enter new life phases like home ownership and parenthood, those added financial pressures make this high-earning demographic most likely to live paycheck to paycheck. However, they are learning how to better manage finances despite it.
In the latest New Reality Check: The Paycheck-to-Paycheck Report — The Generational Deep Dive Edition, a PYMNTS and LendingClub collaboration based on a survey of nearly 3,400 U.S. consumers, we found that 73% of millennials describe themselves as living between checks.
That figure has remained steady since the same period in 2022. However, the research notes that millennials are turning the corner in terms of savings cushions and spending priorities that are lessening the stressors that accompany paycheck-to-paycheck living.
For example, we found that “millennials have seen their savings increase again after being flat throughout 2022. In March 2023, millennials reported an average savings of $11,000, compared to $7,300 in March 2022. This suggests that, like other paycheck-to-paycheck consumers, they have learned to manage their finances through multiple recessions and financial crises.”
Those growing savings cushions can take some of the urgency out of sudden and unexpected expenses, of which 72% of millennials report experiencing at least one such event in the past three years.
Overall, our research found that in March 2023, 60% of adult U.S. consumers lived paycheck to paycheck, which is down from 62% in February 2023, and from 64% at this point in 2022, which is a sign that all income groups are finding ways to modify spending for inflationary conditions.
Meanwhile, more Gen Z consumers are experiencing the pinch of paycheck-to-paycheck living. As the study states, “As of March 2023, 66% of Gen Z lived paycheck to paycheck — an increase of 8 percentage points since March 2022. Many of these consumers are still establishing their careers, which can mean lower wages, and as they are young and more apt to be single, they may be more likely to spend more on discretionary categories like dining out and entertainment while living paycheck to paycheck.”
Original Article: https://www.pymnts.com/connectedeconomy/2023/73percent-of-millennials-still-live-paycheck-to-paycheck-but-savings-cushions-are-rising/
