More Americans Are Losing the Luxury of Choice
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Living “paycheck to paycheck” can mean different things to different people.
Most think of it as scraping by — having just enough income to cover the bare necessities. But it can also mean choosing to live without any breathing room in your budget, regardless of how big that budget is.
Both scenarios involve needing your next paycheck to cover all of your obligations. But the first is about subsisting while the second reflects a lifestyle and mindset.
To understand why this distinction is so important, here’s some broader context: A consistent majority of U.S. adults consider themselves living paycheck to paycheck, according to monthly data that PYMNTS Intelligence, a payments industry researcher, has been tracking for years.
But over the course of 2025 there was a clear shift in the reasons why: The percentage who had no alternative rose from 29% to 40%, while the share doing it by choice shrank from 35% to 30%, PYMNTS data shows. Even the mix-of-both group dropped from 36% to 29%.
“For a growing share of households living paycheck to paycheck, the question isn’t whether to make smart choices, but whether there is enough left over at the end of the month to even have those conversations,” PYMNTS CEO Karen Webster wrote on Jan. 21.
The switch underscores how challenging it can be to afford today’s cost of living. Between the rising cost of housing and insurance, higher grocery bills, and a tougher (AI-charged) job market, even a growing share of households earning six-figure incomes are living paycheck to paycheck by necessity, PYMNTS data shows. Americans who rely on hourly, gig and contract work as well as younger people and parents with children are especially vulnerable.
Worth noting: PYMNTS asks people whether they consider themselves living paycheck to paycheck. But those that say yes are assigned a “necessity” or “choice” status based on their income sources, debt, and spending habits.
So what?
In a perfect world, every budget would have some wiggle room so you could keep up with inflation — and absorb unexpected financial shocks — without leaning on your credit cards. But for many Americans, today’s economic reality is making that margin harder to maintain.
The key is to seize any chance you get to build a cushion, whether it’s tucking away overtime pay from a good month or dialing back optional spending. Think of it as buying yourself some security and a say in what happens next.
Related Reading
A Middle-Class Life Feels Impossible for Many Americans, New Poll Finds (The Independent)
US Companies Are Still Slashing Jobs to Reverse Pandemic Hiring Boom (The Wall Street Journal)
The American Affordability Tracker (Urban Institute)
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