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  • James Veal

2 Reasons Why 70% of Millennials Live Paycheck to Paycheck

A new survey according to LendingClub and PYMNTS found that approximately 54% of Americans live paycheck to paycheck. 40% of baby boomers and seniors said they live paycheck to paycheck. But the report revealed that millennials results were much higher - 70% of them live paycheck to paycheck.

Living paycheck to paycheck reflects economic needs and wants - if not more than - income or wealth. This explains why the high percentage of millennials who turn ages 20 to 40 this year are struggling.

Millennials - especially older ones - are collectively at important stages of their lives where they may be starting families or taking on major purchases, such as homes, cars, furniture, etc. However, they may also be less advanced in their careers than their parents were.

Millennials Face More Economic Challenges

When you look at the circumstances much closer, millennials have faced one economic challenge after another. The oldest of them graduated into a dismal job market during the Great Recession between 2007-2009. Soaring costs for things like housing, healthcare, and shouldering the lion’s share of student loans caused many to struggle in trying to build wealth.

A dozen years later (last year), we all experienced the COVID-19 pandemic which literally shut downed the world. That unexpected curve-ball threw yet another wrench into their plans. The report acknowledges that the pandemic played a major setback in their progression and to most Americans.

Why Millennials Live Paycheck-to-Paycheck

So, the 2008 financial crisis and the coronavirus pandemic were the first reasons why millennials are living paycheck to paycheck. Here is the other reason:

Living paycheck to paycheck sometimes gives off the vibe of scraping by and of poverty. It’s even left six-figure earning millennials struggling to get by. The survey found that 60% of millennials raking in over $100,000 a year are also living paycheck to paycheck.

Now, the economy isn’t fully to blame though. Many millennials fall victim into lifestyle tendencies, where some will generally spend because their standard of living has to match a rise in discretionary income. This way of thinking makes it more difficult to balance spending and saving habits. Do you really need that Benz to show your neighbors that you’re living large? Did you have to buy her that Hermes handbag(maybe)?

The reality of a paycheck-to-paycheck lifestyle in the U.S. today is much more complex. A combination of external economic circumstances and spending habits to prove that you’re accomplished are leaving millennials feeling strapped for cash. If they refuse to change their patterns, most likely they'll continue to live paycheck-to-paycheck. Go here to stop Living Paycheck to Paycheck

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