LendingClub Financial Health Officer Anuk Nayar Reports that No US Region Is Immune to Falling into Paycheck-to-Paycheck Cycle

LendingClub Corporation (NYSE: LC), the parent firm of LendingClub Bank, the leading digital marketplace bank in the US, has shared key findings from its second Reality Check: Paycheck-To-Paycheck research series.

The first report revealed that most US residents (54%) are living paycheck-to-paycheck; this second August edition, prepared with assistance from PYMNTS, looks at various “regional differences.”

The main takeaway, according to LendingClub, is that in every region within the US, Americans are living paycheck to paycheck, “with certain regions faring better than others.”

According to the research findings, almost 59% of all consumers in the South Central region (Texas, Oklahoma, Arkansas, Louisiana, Mississippi, Alabama, Tennessee, and Kentucky) of America live paycheck to paycheck (compared to 54% nationally), with 25% survey of respondents living there “struggling to pay their monthly bills.”

South Central residents are also 20% “more likely to live paycheck to paycheck and 22% more likely to have trouble paying their monthly expenses than Mountain residents,” the report revealed while noting that Americans living in the Northeast states (Pennsylvania, New Jersey, New York, Connecticut, Rhode Island, Vermont, New Hampshire, Massachusetts, Maine) are also “living paycheck to paycheck at a higher-than-average rate (nearly 56%), with 23% of respondents living there struggling to pay their monthly bills.”

Those living in the Northeast and South Central are “more cash strapped than most”:

  • 45% of consumers earning more than $100,000 in the Northeast live paycheck to paycheck, compared to 40% nationally, with 19% of them “struggling to pay their monthly bills.”
  • 71% and 69% of millennials living in the South Central and the Northeast regions, respectively, live paycheck to paycheck.
  • Older “Bridge” millennials — consumers “born between 1978 and 1988 that, therefore ‘bridge’ the gap between older millennials and younger Generation X consumers — living in the Northeast region of the United States are 20% likelier to be living paycheck to paycheck than those in the Mountain states.”
  • On the other end of the spectrum are the Mountain states (New Mexico, Arizona, Nevada, Utah, Colorado, Wyoming, Idaho, Montana) where consumers “residing in this region are the least likely to live paycheck to paycheck.”

The announcement also mentioned that mountain State residents are also “tied with residents in South Atlantic states (Florida, Georgia, North Carolina, South Carolina, Virginia, West Virginia, Washington, D.C., Maryland, Delaware) as being the second-least likely consumers to have trouble paying their monthly bills.”

Though, it’s worth noting that the financial lifestyle gap is “largest in the Mountain region, where low earners are 150% more likely than high earners to be caught in the paycheck cycle,” according to a release by LendingClub.

As stated in the release:

“The cost of living in metropolitan areas tends to be higher than in rural areas, making it difficult for many consumers to pay their bills. According to the research, 63% of all consumers residing in metropolitan areas live paycheck to paycheck which is 24% higher than in rural areas.”

The release also noted:

“The South Central and the South Atlantic regions are exceptions to this rule, where consumers living in rural areas within these regions are more likely to live paycheck to paycheck than such consumers living in towns and cities, as 58% and 59% of each region’s rural residents do so, respectively. In  comparison, 52 percent of metropolitan residents in the South Central and 51% of town residents in the South Atlantic live paycheck to paycheck.”

Anuj Nayar, Financial Health Officer at LendingClub, added:

“No region of the United States is immune to falling into the paycheck to paycheck cycle, and no single defining factor determines who will and will not ultimately become immersed in it. There is a clear need for the financial industry to step up and provide products and services that help all Americans effectively manage their cashflow so they can plan and save for their futures, no matter where they live.”

(For more details on this report, check here.)

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