LendingClub Corporation (NYSE: LC), the parent company of LendingClub Bank, America’s digital marketplace bank, released key findings from the 26th edition of the Reality Check: Paycheck-To-Paycheck research series.
The Seasonal Financial Distress Deep Dive Edition “examines the impact of seasonal spending on consumers’ ability to manage expenses and put aside savings.”
This edition draws on insights “from a survey of 4,218 U.S. consumers conducted from Aug. 2 to Aug. 15, supplemented by analysis of other economic data.”
In August 2023, a substantial share (60%) of consumers “grappled with living paycheck to paycheck, which is unchanged since August 2022.” Strikingly, living paycheck to paycheck cuts across all income brackets, “with three-quarters of consumers earning less than $50,000 annually and 45% of those with higher incomes — those earning $100,000 annually or more — reporting this lifestyle. Among consumers annually earning between $50,000 to $100,000, 62% lived paycheck to paycheck as of August 2023.”
Additionally, the share of struggling paycheck-to-paycheck consumers “remains practically unchanged year over year as well.” As of August 2023, 19% of consumers “lived paycheck to paycheck with issues paying bills.” The share of consumers living paycheck to paycheck without issues “paying monthly bills is 41%, also unchanged compared to last year.”
Alia Dudum, LendingClub’s Money Expert, said:
“The data underscores the pervasive nature of financial challenges affecting a majority of consumers.”
Compounding the hardships of living paycheck to paycheck are “the seasonal impacts on consumers’ financial well-being.” Nearly half of all consumers “say their financial standing fluctuates seasonally.”
At 60%, millennials are the generation most likely to “say that their financial situation is particularly tight at specific times of the year.” Similarly, 57% of consumers “living in a household of four or more report the same.”
Surprisingly, seasonal financial swings “can lead 30 million consumers not living paycheck to paycheck to think and act as if they do live paycheck to paycheck.”
Methodology
New Reality Check: The Paycheck-to-Paycheck Report — The Seasonal Financial Distress Deep Dive Edition is based “on a census-balanced survey of 4,218 U.S. consumers conducted from Aug. 2 to Aug. 15, as well as an analysis of other economic data.”
The Paycheck-to-Paycheck series expands “on existing data published by government agencies, such as the Federal Reserve System and the Bureau of Labor Statistics, to provide a deep look into the core elements of American consumers’ financial wellness: income, savings, debt and spending choices.”
Their sample was balanced “to match the U.S. adult population in a set of key demographic variables: 51% of respondents identified as female, 33% were college educated and 38% declared incomes of more than $100,000 per year.”