(The Hill) – Almost three-quarters of millennials are living paycheck to paycheck, a percentage notably higher than other generations, according to a new report.
PYMNTS, which reports on financial news and data, and the financial services company LendingClub collaborated to release a report titled “New Reality Check: The Paycheck-to-Paycheck Report,” to learn consumers’ financial situations, broken down into the different generations.
The survey found that 60.1% of consumers were living paycheck to paycheck last month, including 73.2% of millennials. Meanwhile, 65.5% of Generation Z consumers and 64.2% of Generation X were living paycheck to paycheck, but only 49.5% of baby boomers and senior citizens were.
The most cited reason for all respondents who said they were living paycheck to paycheck was that their pay only covers basic bills, with 38.4% providing that reason.
More than a quarter of respondents also said they are in the situation because they need to pay for expenses for other family members and have “significant” debts to pay. About 30% of millennials cited each of these reasons, as well.
The survey found more than 70% of millennials live with a partner or spouse, and more than 60% live with children or grandchildren. Almost 80% earn more than half of their household’s income, while 20% earn all of it.
But the researchers did find that millennials appear to be learning to manage finances more effectively, as they had an average savings of $11,000 last month compared to $7,300 one year prior. The report states that millennials and other paycheck-to-paycheck consumers learn to handle finances through recessions and financial crises.
The report also found Gen Z consumers trending up when it comes to living paycheck to paycheck. The almost-66% recorded last month is an 8-point increase from the year before. It states that many of these consumers are still establishing their careers and might be more likely to spend on discretionary purchases like eating out and entertainment.
Gen Z consumers are the most likely to cite discretionary spending as the reason they are living paycheck to paycheck, with 31% saying so. But almost 40% said their main reason for living paycheck to paycheck is that their salary only covers their basic expenses.
“With inflationary pressures expected to continue well into 2024, consumers of all generations remain tasked with adjusting their financial behaviors to be able to put aside savings and remain credit worthy,” the report concludes.
The results of the study were gathered March 8-17 based on a census-balanced survey of 3,363 U.S. consumers.