1 In 4 US Households Are Living Paycheck To Paycheck

In 2025, approximately 1 in 4 (24%) US households are living paycheck to paycheck according to recent analyses from the Bank of America Institute.​

Key Insights

• The proportion of households living paycheck to paycheck has increased slightly compared to previous years, rising from about 23% two years ago.​

• This trend has disproportionately affected lower-income households, with nearly 29% of households in this group currently living paycheck to paycheck, up from 28.6% in 2024 and 27.1% in 2023.​

• For higher-income households, less than 20% report living paycheck to paycheck, while the share for six-figure earners is even lower but not insignificant.​

• The main drivers for this situation are slow wage growth among lower-income households and accelerating living costs, especially in essentials like housing, food, and childcare.​

• The Federal Reserve and other surveys report that increasing credit card debt and delinquencies are additional signs of rising financial strain for many Americans.​

Causes and Context

• Inflation has reaccelerated in recent months, exacerbating the gap between income growth and expenses for many working families.​

• While wage growth was strongest for lower-income households in 2021-22, that momentum has now declined, making it harder for them to cover basic needs.​

• The “K-shaped economy” phenomenon means affluent Americans are faring better, while those at the bottom are falling behind.​

Defining “Paycheck to Paycheck”

• “Living paycheck to paycheck” is commonly understood as allocating most income to essential expenses, leaving little savings or money for emergencies.​

This situation reflects ongoing challenges in economic mobility and household financial resilience across the US in 2025.​