Personal Finance

Survey: 44% of $100-149K Earners Live Paycheck to Paycheck

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Budgeting can be a difficult proposition. Things like taxes, house payments and student loans can have your paycheck being pulled in what feels like a thousand different directions. When this happens, it’s easy to find yourself living paycheck to paycheck.

Living this way means you often find yourself struggling at the end of every two weeks (or at the end of every month, depending on how often you get paid) to buy food or pay the bills. We were interested to know how common living paycheck to paycheck was, so we conducted a survey to find out.

The survey questioned 1421 adults between the ages of 25-34 who had taken some college courses or attained at least a bachelor’s degree, and asked them “Do you live paycheck to paycheck?”.

High Earning Does Not Equal Great Saving

One result from the survey that surprised us, simply because one wouldn’t normally think someone at this salary level would have to live paycheck to paycheck, were those earning more than $100,000 per year.

One reason for this could be that many of those making that amount of money have to provide for much more than themselves; car payments, house payments, tuition for children’s schooling, and other lifestyle expenses can be a substantial drag on one’s ability to save. Another reason could be that an increase in pay sometimes causes an even greater increase in spending, which ultimately leads to debt.

Comparatively, 41% of those earning $75k to $99k, 38.6% of those earning $25k-$49k, and 33.5% of those earning $50k-$75k live paycheck to paycheck. It seems as though the more you make, the worse you get at saving!

The $150k+ group was slightly better than the $100k-$149k group, with 42% of them living paycheck to paycheck. The only group worse than the $100-$150k earners was the $0 to $25k group at 44.9%, which is to be expected for such a low wage.

The Effect of Gender on Saving

When conducting surveys, it’s important to consider geographic and lifestyle distinctions among respondents. One factor we made sure to check was the difference between men and women.

The disparity between genders was quite surprising. One reason could be that more women than men work in jobs that pay minimum wage (according to Pew Research Center). That theory is supported in a community survey by the U.S. Census, which shows that the overall disparity in pay between males and females is quite high.

Men between the ages of 25-34 with at least some college or an A.A. degree make $41,520 on average. Women in the same age bracket and education level make $28,279 on average. The differential between these two stats could be among the reasons why women experience the difficulty of living paycheck to paycheck more than men.

Overall Population Takeaways

Overall, 38% of the 1421 respondents said that they live paycheck to paycheck.

It comes as no surprise that many would like to see the minimum wage raised from the $7.25 federal minimum where it currently sits to as much as $15. In fact, cities as large as Seattle and even Los Angeles have already enacted legislation that will implement $15 per hour minimum wages within the next few years.

While these minimum wage increases might help alleviate some of the money pressure many people seem to be feeling, income alone is not the only reason that so many live paycheck to paycheck — as proven by the 42% of people making $150k+ who are in the same boat.

Which Region Saves the Most?

It seems that the South encounters the problem of living paycheck to paycheck more than any other region, although only by a small margin.

This could be because, according to the Department of Labor, all of the Southern States except for two (Arkansas and Florida) have no minimum wage law, which means residents must rely on the federal minimum wage – the lowest wage residents of the United States can receive.

If you find yourself living this same lifestyle, you are certainly not alone. Living paycheck to paycheck can cause severe financial hardship, particularly if any emergency, medical or otherwise, were to arise. While that can be a scary thought, there fortunately are some creative ways to save money for the “just in case” moments in life.