Bank of America says even households with incomes over $150,000 a year are living paycheck to paycheck.
It’s no surprise that everything is more expensive these days. (Tickets to the World Series are Most expensive of all time.) But, according to a new one Analysis by Bank of Americait’s worse than you think—even for the supposedly wealthy.
Due to skyrocketing capital costs and, in many cases, the cost of maintaining an expensive home, one in five households earning at least $150,000 a year is now living paycheck to paycheck. row wrote in an October report, based on spending and account data. information between customers based in the United States. (Pay-per-paycheck, as defined by BofA, means spending more than 95% of income on essentials like food, electric bills, child care and rent.)
As expected, households earning less than $50,000 annually are by far the most represented group in the itemized pay group, comprising 35% (up from 32% in 2019). As households earn more, their rates drop.
Six-figure tension: ‘How could this happen?’
Correct, even those with six figures often have to look for more money to stay on the water. (ONE MarketWatch Survey strong earnings from earlier this year echo BofA’s findings.) The problem is largely due to the outsized impact of escalating lifestyle in all its dangerous forms, Bank of America said the report author.
“Households living paycheck to paycheck have higher levels of essential spending, lower income, or a combination of both,” they write. At the same time, their data shows that “paycheck-to-paycheck households have 90% more essential spending than non-paycheck households.” to receive salary.”
Another reason: Once families reach a certain income threshold, all those “necessary expenses” become relatively higher, often far exceeding their salaries. Specifically, “households with higher incomes may have purchased larger, more expensive homes and thus had larger mortgages,” BofA wrote.
Big houses, they add, go hand in hand everything is bigger: Insurance costs, property taxes, utilities, care and maintenance.
Time does not heal everything
More bad news: The share of households paying wages increases with age. More baby boomers, most of whom are retired, live paycheck to paycheck than any other age group. generation Xtherefore, there is the highest proportion of wage-paying households among those who still receive the majority of their income through participation in the labor market.
Gen X’s plight, as BofA points out, reflects previous research found that those individuals tend to have the highest necessary spending rates of anyone.
But overall, the share of households paying wages has increased since 2019, BofA found. One in four households fit the bill. That’s despite the fact that there has been inflation relatively cold; it remains stubborn enough to create lasting shock for working Americans.
And are the workers really in the situation precarious financial situationa majority feel as though they are. In BofA’s Market Landscape Insights Study, nearly half of respondents said they agreed with the statement “I’m living paycheck to paycheck,” a stock that has risen steadily over the past two years.
This, BofA wrote, “may reflect the impact of higher consumer prices on people’s perception and experience of their finances.”
