20% of people earning $250,000 per year live paycheck-to ...

A larger share of higher-income Americans spend more money than they bring in compared to those who earn less, study finds. CBSNewsApp UkraineCrisis COVIDPandemic CBSNewsLive ManagingYourMoney EssentialsShopping Newsletters WatchCBSNews Low-wageworkersaren'ttheonlygroupofAmericansregularlyspendingmostoralloftheirpaychecks. AgreatershareofAmericanswhoearnmorethan$250,000annuallyarespendingallofwhattheybringin,comparedwithworkersearninglessthan$100,000,accordingtoanewanalysis fromtheBankofAmericaInstitute. Tobesure,peoplewhoaretrulyliving"paycheck-to-paycheck"tendtobelowerdowntheincomeladder,thecompanysaid.Butthefindingsalsoshowthatasignificantshareofworkersatallincomelevelsregularlyspendalloftheirincome—ormore. "Inanygivenincomegroupthereisaslugofpeoplethatlooklikethey'refinanciallyquitestretchedintermsoftheiroutgoingsrelativetotheirincomings,"DavidTinsley,senioreconomistfortheBankofAmericaInstitute,toldCBSMoneyWatch.Defining"paycheck-to-paycheck"BankofAmericaeconomiststappedanonymizedclientdatatolookatcustomers'depositaccountsinthefirstquarterof2022,zeroinginoninflowsofcash,likeincomeandotherdeposits,aswellasoutflows,suchascreditcardpayments. Aspeople'sincomerises,theirspendingoftenexceedsearningsandotherdeposits,theInstitutefound.Indeed,roughly20%ofBofAclientswithannualincomesofmorethan$250,000spent15%abovewhattheydepositintotheiraccounts,accordingtothereport.Bycomparison,17%ofcustomerswhoearnbetween$50,000and$100,000tendtospendmoreeverymonththantheyhavecomingin."Thoseonlowerincomesarelikelytobemostchallengedbyrisinginflationandeconomicuncertainty,"thereportstated."Butaswedigintothedatawefindtherearesmallbutsignificantgroupsliving'paychecktopaycheck'evenathigherincomelevels,andindeedacrosstheagedistribution." U.S.familiesstruggleasinflationandgaspricessoar 02:27 Thebanknotesthatlivingpaycheck-to-paycheckdoesn'tnecessarilymeanthatsomeoneisbarelyabletoaffordnecessitieslikefoodandgasoline.Definedmorenarrowly,itcanalsomeanthatapersonissimplyspendingthelion'sshareoftheirincomeonordinaryexpenses.Meanwhile,theanalysisonlylooksataccountactivityoverasinglequarter,anditalsodoesn'ttakeintoaccountworkerswhocountonlargebonusesthatarriveattheendoftheyear.Upper-incomeclientscouldalsobepayingforamortgageonahouseordepositingaportionoftheirincomesintobrokerageorinvestmentaccounts,Tinsleynoted. "Youhavepeoplesendingmoneytobrokerageaccountsorpeoplepayingtheirmortgages,soyoucouldbeon$250,000andhaveborrowedalotofmoneyinordertoaffordproperty,andthatwoulddefinitelypushyouroutgoingsveryclosetoyourincomings,"Tinsleysaid.  TrendingNews Abbottrecallsmorebabyformulaoverfaultybottle IRSsetsitsnewtaxbrackets.Here'showtofigureyours. MarijuanacomingtoCircleKgasstationsinFlorida GroupasksSupremeCourttoblockBiden'sstudentdebtreliefplan AmericanAirlineswillrefund$7.5Mtotravelersforbaggagefees ThanksforreadingCBSNEWS. Createyourfreeaccountorloginformorefeatures. Continue Pleaseenteremailaddresstocontinue Pleaseentervalidemailaddresstocontinue ViewCBSNewsIn CBSNewsApp Open Chrome Safari Continue Bethefirsttoknow Getbrowsernotificationsforbreakingnews,liveevents,andexclusivereporting. NotNow TurnOn