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More American households are living paycheck to paycheck, according to a new study.
The Bank of America Research Institute examined internal data and found that by 2025, nearly a quarter of all households are estimated to be living paycheck to paycheck. This is up from 23.5% in 2024.
According to the Bank of America Research Institute, a household is living paycheck to paycheck if its necessities expenses (child care, housing, gas, credit card payments, car payments, groceries, etc.) exceed 95% of its income in a quarter.
But Joe Wadford, an economist at the Bank of America Research Institute, said there was a slight silver lining. The overall number of households living paycheck to paycheck is increasing, but the pace of growth is nearly three times slower than in 2024. Wadford told USA TODAY that the growth rate was 0.3% in 2025 and 0.9% in 2024.
Millennials and Gen Xers live paycheck to paycheck.
Wadford said the slowing growth in households living paycheck-to-paycheck may be due to the number of low-income households, particularly millennials and Gen Xers, living paycheck-to-paycheck. The report also found that the number of high- and middle-income households living paycheck to paycheck has barely increased.
“It’s really about wages,” Wadford said. “Since the start of the year, wages for low-income households have continued to fall…while inflation remains high.”
In 2025, 29% of low-income households will be living paycheck to paycheck, up from 28.6% in 2023 and 27.1% in 2023.
Where you live may make a difference
There are also regional differences in how households live based on their salary.
In the Northeast, including New Jersey, New York, and Pennsylvania, the percentage of households living paycheck to paycheck increased. The Midwest, including Illinois, Indiana, Michigan, and Ohio, also saw increases compared to 2024.. Meanwhile, the share of people living in the South, which includes Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia and West Virginia, decreased. The number of households living paycheck to paycheck also declined in the West, including Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah and Wyoming.
Wadford said inflation data shows the South and West have some of the lowest inflation rates in the country. This may explain why it is likely to ease some of the financial burden on consumers in these regions, he said.
However, the report said inflation has started accelerating since last year, “and therefore, in our view, these cost increases could reinstate or increase economic pressure on consumers in these regions after only a brief respite.”
Salary runs out quickly
The speed at which consumers spend their paychecks is also rapid. The average American spends more than a third of their paycheck within the first 12 hours of receiving a paycheck, according to new data from EarnIn’s Talker Research.
In a study of 2,000 Americans divided evenly by generation, Millennials spent even faster, spending an average of 40% of their paycheck within the first few hours of receiving a paycheck.
The average American surveyed said that about 48% of their paycheck was spent within 48 hours.
Most of the initial spending went to essentials, with more than half (52%) of respondents saying they were covering groceries and necessities. 48% said they paid their bills within the week, and 42% said they took care of other major obligations like housing and credit cards.
And it’s not low-income or middle-income wage earners who are living beyond their paychecks. As USA TODAY previously reported, the Harris poll described three-quarters of people with six-figure incomes as living paycheck to paycheck and having to use credit cards because they ran out of cash.
Betty Lin-Fisher is a consumer reporter for USA TODAY. Contact her at blinfisher@USATODAY.com or follow her at @blinfisher on X, Facebook and Instagram and @blinfisher.bsky.social on Bluesky.. Sign up for our free The Daily Money newsletter, breaking down complex consumer and financial news. Subscribe here.
