More than 33 percent of Americans who earn $250,000 a year report living paycheck to paycheck, “underscoring how inflation is taking a bigger bite out of Americans’ budgets at all ends of the pay spectrum,” Bloomberg reported on Wednesday.
Industry publication Pymnts.com and LendingClub Corp. conducted a survey from April 6-13 with about 4,000 US consumers, finding that roughly 36 percent of households bringing in $250,000-plus annually spend most of their income on household expenses.
“It’s particularly true among millennials, who are now in their mid-20s to early 40s: More than half of top earners in that generation report having little left at the end of the month,” according to the report.
The survey revealed that 55.4 percent of Millennials who earn $250,000-plus a year reported living paycheck to paycheck compared to 21.8 percent of Boomer generation respondents in the same earnings category.
The survey did distinguish high earners who can pay their bills with relative ease compared to those who struggled to cover household expenses in April, which is roughly one in ten. The report noted:
Housing expenses, which typically take up large chunks of the budgets of wealthier people, have skyrocketed during the pandemic. For example in Orange County, California, a top-tier home cost $1.7 million in April, up from $1.2 million in February 2020, based on Zillow Group Inc. data. A mortgage on that house, assuming a 20 percent down payment, would cost about $100,000 per year. That’s 40 percent of a $250,000 annual pre-tax income.
Approximately 61 percent of consumers overall reported living paycheck to paycheck in April, which is a nine percentage-point increase from last year. The results come as U.S. food inflation continues to soar past a 41-year high and gas prices surpass $5 in many parts of the country.
The survey found that many higher income households are using credit cards to “finance their lifestyles,” but they are also able to completely pay off the balance.
“US consumer borrowing soared in March by the most on record as credit-card balances ballooned and non-revolving credit jumped, highlighting the combined impact of solid spending and rising prices,” the report states.