More Americans living paycheck to paycheck than 5 years ago, Bank of America data shows

The share of U.S. households living paycheck to paycheck has grown across all income brackets over the past five years, according to a new study from the Bank of America Institute.

A new analysis released by the think tank on Tuesday found that more than a quarter of Americans, 26%, have necessary expenses that chew up more than 95% of their takehome pay, and nearly a third, 30%, of households spend upwards of 90% of their income on critical bills like groceries, housing, utilities, gas, insurance and child care.

The data showed a 10% increase in those living paycheck to paycheck in 2024 compared to 2019. 

Regardless of the study’s definition, nearly half of Americans currently feel they are living paycheck to paycheck, the BofA Institute found. That number has been rising for at least the past two years.

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David Tinsley, senior economist at the Bank of America Institute and the lead author of the study, says it’s hard to be precise on how much elevated inflation has played a role in the increase, but the rise in the prices of necessities such as groceries is clearly a very important factor. 

Americans are increasingly living paycheck to paycheck according to a new study. (Amy Beth Bennett/South Florida Sun Sentinel/Tribune News Service via Getty Images / Getty Images)

“For some households, the rises in their incomes will have largely kept up with inflation, shielding them,” he told FOX Business. “But, for some people already living close to paycheck-to-paycheck, this may be less the case, meaning more get caught in the net.”

Lower-income households have predictably been impacted the most, with 35% of those making less than $50,000 annually falling into that category, but every income bracket showed at least 20% have little left over after necessary spending, including those making more than $150,000.

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The share of households living paycheck to paycheck also grew with every generation from Gen Z to Baby Boomers, but dropped some among those born pre-1946.

A new Bank of America Institute study found the share of people living paycheck to paycheck increases in every generation through Baby Boomers, then falls slightly. (Tom Williams/CQ-Roll Call, Inc via Getty Images / Getty Images)

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“Rising prices has impacted all incomes and generations, so it’s not surprising we see some rise in the share of people living paycheck to paycheck across these cohorts too,” Tinsley said. “Housing costs are an important component and older generations and those on higher incomes often have bigger mortgages, which means that some can live paycheck to paycheck even on higher wages.”