LendingClub Corporation and PYMNTS.com. presented the results the 11th edition of the “Reality Check: The Paycheck-To-Paycheck Report”, in which they examine the financial lifestyle of American consumers living paycheck to paycheck, the factors that cause financial hardship, and the impact of these financial stressors on their lives.
The report found that the 65% of paycheck-to-check consumers have experienced a financially stressful event in the last three years, with sudden interruptions in income, such as job loss, being the most common. In addition, half of paycheck-to-paycheck consumers say their salary only covers basic expenses and is one of the reasons behind their financial difficulties.
“Consumers have experienced the last couple of difficult years as different factors have affected their financial lifestyle and there seems to be little relief in sight,” said Anuj Nayar, Financial Health Officer at LendingClub. “While the specific nature of the event causing financial distress may vary, it is clear that we all need to plan for the unexpected. It is simply a matter of time before something comes along that throws even the best of financial plans off track.”
Living paycheck to paycheck means spending one’s entire salary with little or nothing at the end of the month, yet many of these consumers remain creditworthy, actively managing their cash flows. real-time cash.
Check-to-check consumers fall into two categories: those who can easily pay their monthly bills and those who struggle to do so.
According to data from the analysis, more than half of US consumers have faced a life-cycle or life-altering event in the last three years. Lifecycle events, such as getting married or having a child, are the most common events, with 38% of overall consumers experiencing these situations in the last three years. The proportion jumps to 51% among millennials, but falls to 30% among baby boomers and seniors. Life-altering events, such as losing a job or facing a serious illness at home, occurred to 33% of all consumers in the last three years.
While low income is cited as a cause of financial hardship, paycheck-to-paycheck consumers Paying for high-income brackets and large households cite paying expenses for a family member as a factor in financial hardship. In fact, nearly 40% of check-to-check consumers earning more than $250,000 say that this is a factor that drives their financial problems.
To see the full report, go here .
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