More than 60% of Americans are living paycheck-to-paycheck, with the increased cost of everyday items like groceries and utilities straining household budgets, according to an online originator of personal loans. Even individuals making more than $100,000 per year have less savings to rely on and are struggling to make ends meet.
Consumers are adjusting their spending behaviors, noted Amber Carroll of Lending Club, in a published report, but those adjustments are just helping consumers tread water and are not allowing them to get ahead.
Of those 60% who are living paycheck-to-paycheck, 21% of them are having issues paying their bills, according to the report. That figure, though, is largely unchanged from last year. This is an indication that consumers are adapting to inflationary pressures and are finding ways to manage their spending and live within their means, according to the report.
One driver of income stability right now is the size of a household, the report noted. For example, consumers living with children younger than 18 in the home have credit card balances that are 50% higher than those consumers who are living at home alone. More than half of the members of Generation Z are not able to afford living independently and are resorting to borrowing money to make ends meet.
For companies in the accounts receivable management industry, this presents a somewhat bleak outlook for consumers’ abilities to repay old debts. Where they may have had extra cash a year or two ago, inflation has eaten up whatever they had socked away.
