More Young Adults in U.S. are Living Paycheck to Paycheck

Almost two-thirds of adult Gen Zs — people who are 26 and younger — were living paycheck to paycheck in March, an 8-percentage-point increase from a year earlier.

This generation is at the beginning of their career, meaning they get lower wages, and tend to have a higher share of consumer debt. They’re also more likely to spend on dining and entertainment even while struggling to cover everyday expenses.

By contrast, the share baby boomers who have nothing left after paying their monthly bills dropped below 50%. This suggests that this age group, many of whom are retired and live on a fixed income, have curbed their spending to cope with higher prices, the study found.

Living paycheck to paycheck doesn’t automatically imply financial hardship. In fact, a large share of higher earners rely entirely on their monthly incomes to meet basic obligations in the country, according to LendingClub. But these people are at the mercy of any unexpected expense, and would be in immediate difficulty if they lost their source of income.

One budget hit awaiting millions of consumers is the resumption of student-debt payments, which were frozen during the pandemic. A plan from the Biden administration to forgive as much as $20,000 in student loans is on hold until a Supreme Court ruling and House Republicans are trying to halt the measure.

“It’s going to be difficult for many people to handle future emergency expenses, including foreseen payments like education, student-loan payments when they return, and housing expenses, which will all get harder to balance for the everyday American consumer,” said Anuj Nayar, LendingClub’s financial health Officer.

The report is based on a survey of almost 3,400 U.S. consumers conducted from March 8 to March 17.

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