A recent study found that high-earners making more than $250,000 a year are now living paycheck-to-paycheck. This is a drastic change from just a few years ago when those in the top income bracket were more likely to have savings and live comfortably. So what’s led to this shift? And what can be done about it? Here we’ll take a closer look at the findings of the study, and explore some potential solutions.
Now in their mid-20s to early-40s, even top earners are living paycheck to paycheck by the end of the month. A third of Americans who make $250k a year are struggling to make ends meet and living paycheck to paycheck. According to a new survey by industry publications Pymnts.com and LendingClub, it is said that nearly all of their income is devoted to household expenses.
Housing expenses account for large chunks of any budget and can be a determining factor in what’s left at the end of the month after expenses. Additionally, those not in the top 5% of income earners, soaring prices for food, gas, and electricity, as well as common household goods – are feeling the pain of paychecks not going as far as they once did. Even the upper tier of households are leaning on credit cards more, but unlike the average worker, tend to have the ability to pay off the balance in full.
These statistics shine a light on the growing issue of paycheck-to-paycheck living, even among high earners. It is becoming increasingly difficult for Americans to save money, and when money gets tight, access to payday loans and other forms of credit is only making things worse. Due to these financially challenging times, employee financial wellness benefits have been increasingly recognized. As you explore options, it is important to provide what employees in all income categories are seeking the most: access.
Help ease financial stress for your team by providing them with access to their earned but unpaid wages. Book a discovery call to learn more about how easy it is to offer Immediate to your team.
Written by: Jason Gwizdala, CTO of Immediate