Three in Five Americans Live Paycheck to Paycheck

27, 2022 /PRNewswire/ -- LendingClub Corporation (NYSE: LC), ... In August 2022, 41% of consumers were living paycheck to paycheck without ... PressRelease ThreeinFiveAmericansLivePaychecktoPaycheck:MorePeopleAreLivingPaychecktoPaycheckbutMakingEndsMeetThanNotLivingPaychecktoPaycheck 09/27/2022 DownloadthePDFversion PDFFormat(opensinnewwindow) 60%SayInflationhasAlteredHowTheyManageandSpendTheirMoney MoreThanHalfofAmericansEarningBetween$100,000to$150,000LivePaychecktoPaycheck SANFRANCISCO,Sept.27,2022/PRNewswire/--LendingClubCorporation (NYSE:LC),theparentcompanyofLendingClubBank,America'sleadingdigitalmarketplacebank,todayreleasedfindingsfromthe14theditionoftheRealityCheck:Paycheck-To-Paycheck researchseries,conductedinpartnershipwithPYMNTS.com.Withinflationreachinga40-yearhighinJune,nearlyallconsumersreportnoticeableincreasesinthecostofeverydaypurchases.TheInflationEditionexaminesthefinanciallifestyleofU.S.consumerswholivepaychecktopaycheck,exploreshowinflationimpactstheirspendinganddetailssavingdecisionsandhowrisingpricesimpacttheirfinanciallifestyle. Today'sPaycheck-To-PaycheckLandscape Theresearchplacespaycheck-to-paycheckconsumersintotwocategories:thosewhocanpaytheirmonthlybillswithoutdifficultyandthosewhostruggletodoso.InAugust2022,41%ofconsumerswerelivingpaychecktopaycheckwithoutdifficultypayingtheirmonthlybills,a10percentage-pointincreasefromSeptember2021andexceedsthe40%ofconsumerswhodonotlivepaychecktopaycheck. "Moreconsumerslivingpaychecktopaycheckindicatesthatmanyarecontinuingtolosetheirfinancialstability,"saysAnujNayar,LendingClub'sFinancialHealthOfficer."Yet,theshareofconsumerslivingpaychecktopaycheckwithissuespayingtheirbillshasdropped7percentagepointsinthepastyear.Manyhavemovedtowhatnowmayconstituteastablelifestyle:livingpaychecktopaycheckbutstillmanagingtopayyourmonthlybills.Thereisjustnothingleftoverattheend." InAugust2022,threeinfiveU.S.consumerswerelivingpaychecktopaycheck,andclosetoone-fifthstruggledtopaytheirbills.Theshareofconsumerslivingpaychecktopaycheckhastrendedupwardovertime,increasingfrom57%inSeptember2021,andtherisehasbeenstrongestacrosshigh-incomeconsumers.InAugust2022,45%ofthoseearningmorethan$100,000peryearwerelivingpaychecktopaycheck,a7percentage-pointincreasefrom38%inSeptember2021.Sixty-twopercentofconsumersannuallyearningbetween$50,000and$100,000werelivingpaychecktopaycheck,upfrom57%inSeptember2021. Consumersinthelowestrangeoftheupperincomebracketsareparticularlylikelytobeslidingtowardpaycheck-to-paychecklife:54%ofconsumerswhoannuallymakebetween$100,000and$150,000,morethandoublethemedianpersonalincomeintheU.S.,arelivingpaychecktopaycheck,anincreaseof7percentagepointsfromJuly2022. HowInflationImpactsConsumers Withinflationreachinga40-yearhighinJune,nearlyallconsumerscitednoticeableincreasesinthecostofeverydaypurchases.Fuelandgrocerieswerecitedmostforconsiderablepriceincreases. GaspricesexplainmostoftheConsumerPriceIndex(CPI)increases,andconsumersfelttheimpactacrossmultiplecategories,includingutilitiesandgroceries.Thereportfindsthat92%ofallconsumerswhopurchasedproductsinthelast30daysnoticedhigherpricesintheproductstheypurchased,while74%ofthosewhosehouseholdspaidarecurringbillinthelast30daysnotedbillincreasescomparedtoayearago.Eighty-threepercentofconsumerscitedveryorextremelyconsiderableincreasesinfuelprices,and69%saidthesameaboutgrocerypurchases.Additionally,morethan70%ofconsumersreportedincreasesinutilitybills,with47%consideringthesehikesveryorextremelysignificant.Thenexthighestincreasesinconsumers'reportsincludepublictransportation(45%),education(41%)andpersonalservices(40%). Similarsharesofpaycheck-to-paycheckconsumersreportedhigherpricesinbothproductsandservices,yetthosewithissuespayingtheirmonthlybillsweremorelikelytonotice.PYMNTS'datafindsthat59%ofpaycheck-to-paycheckconsumerswithissuespayingtheirmonthlybillsnotedthatutilitiesandpublictransportationsawveryorextremelyconsiderablepriceincreases,whileconsumerslivingpaychecktopaycheckwithoutdifficultypayingtheirmonthlybillswerelesslikelytonotethatutilities(47%)andpublictransportation(44%)hadveryorextremelyconsiderablepriceincreases. PYMNTS'dataalsofindsthatfinanciallifestylecandeterminewhatpaycheck-to-paycheckconsumersconsider"essential".Whileresponsesfromconsumersofallfinanciallifestylesindicatedthatgrocerieswere"essential",therewerenotabledifferencesforotherexpenses.Forexample,paycheck-to-paycheckconsumerswithissuespayingtheirmonthlybillswerelesslikelytopurchasefuelforacarorpaytheirutilitybillthanpaycheck-to-paycheckconsumerswithoutdifficultypayingtheirmonthlybillsandconsumersthatdonotlivepaychecktopaycheck. ManagingEverydayExpenses PYMNTS'researchfindsthat60%ofallconsumerswhonoticedpriceincreasesreporthavingtomakechangestohowtheymanageandspendmoney;withhalfoftheseconsumers,and51%ofthoseunderfinancialstress,sayingtheyhavemadeveryorextremelysignificantchanges. Consequently,mostconsumersreportchangesintheirshoppingpreferencesandlessspendingcapacity.Thereductioninpurchasingpowerischangingconsumers'purchasingbehaviorsineverythingfrommerchantchoicetotransportationhabits.One-quarterofconsumerswhochangedhowtheymanageandspendmoneyduetoinflationreportthatthishasforcedthemtobemoremoney-smart,while20%saytheyareshoppingatdifferentmerchantsduetomoneyconstraints.Thedataalsoshowsthatmostconsumerscitelimitingspendingcapacityandchangingshoppingpreferencesasthetopwaysinflationhascausedthemtochangehowtheymanageandspendtheirmoney. Whenconsumerschoosetospend,theyareutilizingcreditproductslikecreditcardstofundtheirlivesandmosthavenotnoticedchangestotheinterestratesofcreditproducts,eventhoughtheyareincreasinglyusingcreditwhiletighteningbudgets.Forexample,nearlyaquarterofpaycheck-to-paycheckconsumersareunawareoftheratestheypayforfinancing. "ItisnosecretthatpriceshavebeenincreasingforeverydayAmericans–notonlyinthegoodsandservicestheypurchasebutalsointheinterestratesthey'repayingtofundtheirlives,"continuedNayar."WhileAmericansaremodifyingtheirspendinginlightofinflation,thereisstilladisconnectwithmanynotyetseeingthetruecostofcreditproducts.Thiscanhavedetrimentalconsequencesforsomeonewhopaystheminimumamountontheircreditcardseverymonth.Advisingconsumerstosimplycutbackonspendingtostayonbudgetandonlyspendon'essentials'isnolongerhelpfulfinancialadvice.'Essential'meanssomethingdifferentforeveryone." Consumers'OutlookonInflationbyRegion Inflationhasanequalimpactonruralandurbanconsumers,withnearlyallconsumerscitingnoticeableincreasesintheireverydayexpenses.Fuelandgrocerieswerecitedmostforhavingsizableproductpriceincreases,withruralconsumersmorelikelytoreportincreasesthanurbandwellers. Althoughgenerallysimilarsharesofruralandurbanconsumersreporthigherpricesinbothproductsandservices,ruralconsumersareslightlymorelikelytodoso.While93%ofruraland92%ofurbanconsumersnoticedhigherpricesintheproductstheypurchased,76%ofruraland74%ofurbanconsumerssawincreasesintheirmonthlybills. Morethanone-thirdofruralconsumershavesignificantlychangedhowtheymanageandspendtheirmoney,whilejustone-quarterofurbanconsumershavedoneso.Urbanconsumersaremorelikelytolimittheirspendingandshifttheirshoppingpreferencesthanruralconsumers,however. Regardlessofwheretheylive,consumersarewellawarethatlivingcosts—especiallyfuel,groceries,andutilities—havebeenontherise,makingitincreasinglydifficulttomakeendsmeet.Consequently,consumersofallincomebracketsareadjustinghowtheymanagetheirspending,withmanyprioritizingtheir"essential"products. Toviewthefullreport,visit: https://www.pymnts.com/study/reality-check-paycheck-to-paycheck-inflation-consumer-spend-expenses/ Methodology NewRealityCheck:ThePaycheck-To-PaycheckReport:TheInflationEditionisbasedonacensus-balancedsurveyof3,495U.S.consumersconductedfromAugust10toAugust29,2022.ThePaycheck-To-PaycheckseriesexpandsonexistingdatapublishedbygovernmentagenciessuchastheFederalReserveSystemandtheBureauofLaborStatisticstoprovideadeeplookintotheelementsthatlieatthebackboneoftheAmericanconsumer'sfinancialwellness:income,savings,debtandspendingchoices.OursamplewasbalancedtomatchtheU.S.adultpopulationinasetofkeydemographicvariables:51%ofrespondentsidentifiedasfemale,31%werecollege-educatedand36%declaredincomesofmorethan$100,000peryear. AboutLendingClub  LendingClubCorporation(NYSE:LC)istheparentcompanyofLendingClubBank,NationalAssociation,MemberFDIC.LendingClubBankistheleadingdigitalmarketplacebankintheU.S.,wherememberscanaccessabroadrangeoffinancialproductsandservicesdesignedtohelpthempaylesswhenborrowingandearnmorewhensaving.Basedonmorethan150billioncellsofdataandover$75billioninloans,ouradvancedcreditdecisioningandmachine-learningmodelsareusedacrossthecustomerlifecycletoexpandseamlessaccesstocreditforourmembers,whilegeneratingcompellingrisk-adjustedreturnsforourloaninvestors.Since2007,morethan4millionmembershavejoinedtheClubtohelpreachtheirfinancialgoals.FormoreinformationaboutLendingClub,visithttps://www.lendingclub.com. 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