Paycheck-to-Paycheck Lifestyles Creeping Up Again: Report

Research from LendingClub Corporation also reveals shoppers’ likely post-pandemic habits

11/1/2021

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New research shows that the number of consumers living paycheck to paycheck is on the rise again, amid rising inflation and other market concerns.

First, the sobering news: well over half of consumers are living paycheck to paycheck.

The more optimistic news: those who have less of a financial cushion are the ones most looking forward to increasing their shopping activities as the pandemic winds down.

These and other consumer spending and behavior trends were recently highlighted by LendingClub Corporation, via research conducted with PYMNTS.com. According to the latest “Reality Check: Paycheck-to-Paycheck” research series, 57% of Americans, or approximately 131 million people, are living a paycheck-to-paycheck lifestyle as of September. That’s down from a high of 65% in December 2020 but up from a low of 52% last April.

Several factors are contributing to the upward trajectory of consumers who are more strapped for available funds. The latest findings from LendingClub Corporation and PYMNTs.com point to higher inflation, rising housing costs, changes in government pandemic support and overall declines in consumer sentiment.

Underscoring the ongoing impact of the global health crisis, the study found a direct correlation between consumers’ financial status and their apprehension about COVID-19. Nearly two thirds of consumers who live paycheck to paycheck are “highly concerned” about the pandemic, compared to about half of those who are more financially secure.

That said, once the world moves into a post-pandemic phase, those concerned consumers say they will shift back into spending mode, both at brick and mortar stores and online. A third of all consumers reported that they will visit physical stores more often, and a quarter of paycheck-to-paycheck shoppers said they will increase their digital shopping even after the pandemic, compared to 17% of financially secure consumers.

"Despite the financial toll of this global health crisis, these findings indicate that the end of the pandemic will boost consumer confidence greatly for U.S. shoppers and will drive long-term change in behavior," said Anuj Nayar, financial health officer for LendingClub.

Nayar also emphasized the importance of building back more financial security among all shoppers, adding: "As consumers have dealt with the punches the pandemic has thrown their way this past year, it is now more important than ever that they are able to start taking control of their financial lives and creating some savings to cushion them from the ongoing effects of the pandemic or other unexpected crises.”