- 70% of millennials say they’re living paycheck to paycheck, according to a new survey.
- Millennials are in a precarious life stage, hitting expensive life milestones but not yet peak earnings.
- The many economic challenges millennials have faced also make things financially difficult.
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Millennials’ wallets are rather skimpy.
Seventy percent of the generation said they’re living paycheck to paycheck, according to a new survey by PYMNTS and LendingClub, which analyzed economic data and census-balanced surveys of over 28,000 Americans. It found that about 54% of Americans live paycheck to paycheck, but millennials had the biggest broke energy.
By contrast, 40% of baby boomers and seniors said they live paycheck to paycheck, the least of any generation. Living paycheck to paycheck reflects economic needs and wants just as much, if not more than, incomes or wealth levels, according to the report. Age and family status also factor in greatly. This explains why millennials, who turn ages 25 to 40 this year, are struggling.
“Millennials – especially older ones – are collectively at important stages of their lives,” the report reads. “They may be starting families or taking on their first major purchases, such as homes and new vehicles, but they may also be less advanced in their careers than their older counterparts.”
It doesn’t help that millennials have faced one economic challenge after another since the oldest of them graduated into the dismal job market of the 2008 financial crisis. A dozen years later, many are still grappling with the lingering effects of The Great Recession, struggling to build wealth while trying to afford soaring costs for things like housing and healthcare and shouldering the lion’s share of America’s student-loan debt.
The pandemic threw yet another wrench into their plans by giving them their second recession and second housing crisis before the age of 40. The report acknowledges that the pandemic played a major role in that stretched thin feeling.
“Living paycheck to paycheck sometimes carries connotations of barely scraping by and of poverty,” it states. “The reality of a paycheck-to-paycheck lifestyle in the United States today is much more complex, and the current economic environment has made it even more complicated.”
It’s left even six-figure earning millennials struggling to get by. The survey found that 60% of millennials raking in over $100,000 a year said they’re living paycheck to paycheck.
Of course, the economy isn’t fully to blame. Some millennials, particularly the six-figure earners, are known to fall victim to lifestyle creep, when one increases one’s standard of living to match a rise in discretionary income. This makes it more difficult to balance spending and savings habits.
But the report found that those who felt they were living paycheck to paycheck were mostly financially responsible. If they received additional sources of income during the year, many tucked it away rather than spent it.
It seems, then, that it’s a combination of external economic circumstances, a precarious life stage, and some spending habits that are leaving millennials feeling strapped for cash.