65 Percent of Paycheck-to-Paycheck Consumers Experienced ...

SAN FRANCISCO, June 27, 2022 /PRNewswire/ -- LendingClub Corporation (NYSE: LC), the parent company of LendingClub Bank, America's leading ... PressRelease 65PercentofPaycheck-to-PaycheckConsumersExperiencedaFinanciallyStressfulEventinthePastThreeYears 06/27/2022 DownloadthePDFversion PDFFormat(opensinnewwindow) 3in10EarningOver$250,000ContinuetoLivePaychecktoPaycheck  Nearly40%ofThoseEarningOver$250,000CitePayingforaFamilyMembers'ExpensesasaDriverofFinancialDistress SANFRANCISCO,June27,2022/PRNewswire/--LendingClubCorporation(NYSE:LC),theparentcompanyofLendingClubBank,America'sleadingdigitalmarketplacebank,todayreleasedfindingsfromthe11theditionoftheRealityCheck:Paycheck-To-Paycheckresearchseries,conductedinpartnershipwithPYMNTS.com.TheFinancialDistressFactorsEditionexaminesthefinanciallifestyleofU.S.consumerswholivepaychecktopaycheck,thefactorsthatcausefinancialdistress–life-cycleeventsorlife-alteringevents–andtheimpactofthesefinancialstressorsontheirlives. KeyTakeaways:65%ofpaycheck-to-paycheckconsumershaveexperiencedafinanciallystressfuleventinthepastthreeyears,withsuddenincomedisruptionssuchaslosingajobbeingthemostcommon.Moreover,halfofpaycheck-to-paycheckconsumerssaytheirsalaryonlycoversbasicexpensesandisonereasonbehindtheirfinancialdistress. "Consumershaveexperiencedatoughlastcoupleofyearsasdifferentfactorshaveaffectedtheirfinanciallifestyleandthereseemstobelittlereliefinsight,"saidAnujNayar,LendingClub'sFinancialHealthOfficer."Whilethespecificnatureoftheeventthatcausesfinancialdistressmayvary,it'sclearweallneedtoplanfortheunexpected.It'ssimplyamatteroftimebeforesomethingwillcomeuptoknockeventhebestlaidfinancialplansaskew." Livingpaychecktopaycheckmeansdevotingallofone'ssalarytoexpenseswithlittletonothingleftoverattheendofthemonth,yetmanyoftheseconsumersremaincredit-worthy,activelymanagingtheircashflowsinrealtime.Paycheck-to-paycheckconsumersfallintotwocategories:thosewhocanpaytheirmonthlybillseasilyandthosewhostruggletodoso.  TheImpactofMajorLifeEventsonLivingPaycheckToPaycheckTounderstandthedriversoffinancialdistress,thisreportsurveyedconsumersaboutlife-cycleeventssuchasgettingmarriedordivorced,birthofachild,movingresidencesandretirement,andfinanciallylife-alteringeventssuchasajobloss,seriousillness,disability,ormajorunexpectedexpensessuchasanaturaldisasterorlawsuit. Accordingtothedata,morethanhalfofU.S.consumershavefacedeitheralife-cycleeventoralife-alteringeventinthelastthreeyears.Life-cycleevents,suchasmarriageorhavingachild,arethemostcommonevents,with38%ofconsumersoverallhavingexperiencedthesesituationsinthelastthreeyears.Thesharejumpsto51%amongmillennialsbutdropsto30%amongbabyboomersandseniors.Life-alteringeventssuchaslosingajoborfacingseriousillnessinthehouseholdoccurredto33%ofallconsumersinthelastthreeyears. Whilelowincomeiscitedasacauseoffinancialdistress,paycheck-to-paycheckconsumersfromhigh-incomebracketsandlargehouseholdscitepayingforafamilymember'sexpensesasadriveroffinancialdistress.Infact,nearly40%ofpaycheck-to-paycheckconsumersearningmorethan$250,000saythisisafactordrivingtheirfinancialstruggles. HowPaycheck-To-PaycheckConsumersSaveOneinfiveconsumerslivingpaychecktopaycheckhavespentmorethanwhattheyhaveearnedinthelastsixmonths,withthosestrugglingtopaybillsseeingtheirsavingscutinhalfoverthepastyear. Closetohalfofallpaycheck-to-paycheckconsumerssaytheirsalaryonlycoversbasicexpensesandisareasonbehindtheirfinancialdistress.Whilemanyconsumersleveragecreditasafinancialtooltomanageexpensesandcashflowduringfinanciallydistressingevents,high-incomeconsumerstendtouseitmore. "Settinganautomatictransfertoasavingsaccount,evenifit'sasmallamount,canhelpyouweatherthenextstormbecauseit'snotifyou'llneedthecash,butwhen.Creditcanalsobeaneffectivetooltohelpwithexpensesduringfinanciallydistressingevents,butthosestrugglingfinanciallyshouldexercisecaution,"continuedNayar."Creditcardinterestratesarerising,and,ifyoudon'tintendtopayyourbillsinfullmonthly,youcouldpotentiallygetintoasteeprevolvingdebttrap.Forthoselookingforrelief,considerrefinancinghigh-interestdebtintoalowercostinstallmentloan." Toviewthefullreport,visit:https://www.pymnts.com/study/reality-check-paycheck-to-paycheck-financial-distress-consumer-savings-credit/ Methodology NewRealityCheck:ThePaycheck-To-PaycheckReportisbasedonacensus-balancedsurveyof3,708U.S.consumersconductedfromMay10toMay23.ThePaycheck-To-PaycheckseriesexpandsonexistingdatapublishedbygovernmentagenciessuchastheFederalReserveSystemandtheBureauofLaborStatisticstoprovideadeeplookintotheelementsthatlieatthebackboneoftheAmericanconsumer'sfinancialwellness:income,savings,debtandspendingchoices.OursamplewasbalancedtomatchtheU.S.adultpopulationinasetofkeydemographicvariables:52%ofrespondentsidentifiedasfemale,32%werecollege-educatedand36%declaredincomesofover$100,000peryear.  AboutLendingClub  LendingClubCorporation(NYSE:LC)istheparentcompanyofLendingClubBank,NationalAssociation,MemberFDIC.LendingClubBankistheleadingdigitalmarketplacebankintheU.S.,wherememberscanaccessabroadrangeoffinancialproductsandservicesdesignedtohelpthempaylesswhenborrowingandearnmorewhensaving.Basedonmorethan150billioncellsofdataandover$70billioninloans,ouradvancedcreditdecisioningandmachine-learningmodelsareusedacrossthecustomerlifecycletoexpandseamlessaccesstocreditforourmembers,whilegeneratingcompellingrisk-adjustedreturnsforourloaninvestors.Since2007,morethan4millionmembershavejoinedtheClubtohelpreachtheirfinancialgoals.FormoreinformationaboutLendingClub,visithttps://www.lendingclub.com. CONTACT:  ForInvestors:[email protected]  MediaContact:[email protected]  PYMNTSContact:[email protected]  Vieworiginalcontenttodownloadmultimedia:https://www.prnewswire.com/news-releases/65-percent-of-paycheck-to-paycheck-consumers-experienced-a-financially-stressful-event-in-the-past-three-years-301575309.html SOURCELendingClubCorporation