LendingClub Corporation (NYSE: LC), the parent company of LendingClub Bank, America’s leading digital marketplace bank, today released findings from the 25th edition of theNew Reality Check: Paycheck-To-Paycheck research series, conducted in partnership with PYMNTS. The Nonessential Spending Deep Dive Edition examines the impact of nonessential spending on consumers’ ability to manage expenses and put aside savings. The series draws on insights from a survey of 3,443 U.S. consumers conducted from July 5 to July 20, as well as an analysis of other economic data.
The Paycheck-to-Paycheck Landscape
In July 2023, 61% of U.S. consumers lived paycheck to paycheck, unchanged from June 2023, but 2 percentage points higher than July 2022. Among these individuals, the number struggling to meet bill payments remains at 21% since June 2023, which represents an increase of 2 percentage points from a year ago but is consistent with the 2021 and 2020 data. Generally, more consumers of all income brackets reported living paycheck to paycheck in July 2023 than last year. The data indicates the persistent financial challenges and inflationary pressures a significant portion of the U.S. population faces.
Nonessential Spending Emerges as a Top Reason for Living Paycheck to Paycheck
A staggering 16 million U.S. consumers — slightly over 10% of the paycheck-to-paycheck U.S. population — claim that nonessential spending is the primary reason they are trapped in the paycheck-to-paycheck cycle. Twenty-one percent of paycheck-to-paycheck consumers cite nonessential spending as one reason — but not the top reason — for their financial lifestyle. This means that about 6% of the U.S. adult population can be considered “discretional” paycheck-to-paycheck consumers, as their financial lifestyle is due to nonessential spending, while 13% of U.S. consumers live paycheck to paycheck at least partly because of nonessential spending.
Nonessential spending is not limited to those…
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