97 Million American Workers Are Living Paycheck To Paycheck

As we’ve noted time and time again, the number of Americans scraping by with almost no money in their savings account (if they even have a savings account) is staggeringly high - and growing.

As the Motley Fool pointed out in a recent post, the St. Louis Federal Reserve, the personal saving rate in June 2017 was a measly 3.8%, or $3.80 for every $100 they earn. With the median household income in the US at just north of $50,000, that would amount to about $4,000 a year.  

And that’s when they’re saving money. Another study from GoBankingRates found that 69% of Americans surveyed had less than $1,000 in savings. And about one-third had no money in reserve.

Considering that the US economy is 70% based on consumption, Americans are probably over-consuming rather than saving. The Federal Reserve recently released data showing that aggregate credit card debt had hit an all-time high of $1.027 trillion, eclipsing the previous high that was set before the Great Recession. Add in another trillion of auto-loan debt and $1.4 trillion in student-loan debt, and the aggregate debt pile is not only larger than ever before – it’s growing at its fastest rate in decades.

And in what's perhaps the most troubling statistic highlighted by Motley Fool, a recent survey by CareerBuilder and The Harris Poll found that 78% of full-time US workers - nearly 100 million Americans - are now living paycheck to paycheck, up from 75% in 2016.

The survey suggested that only 19% of workers save more than $501 monthly, while at the other end of the spectrum, 56% were saving less than $100 a month, including 26% who saved nothing monthly. Fewer than one-third of respondents admitted to following a budget. Meanwhile, about half of respondents said they wouldn’t give up their internet, phone or car to save money.

Maybe once the Federal Reserve has succeeded in “normalizing” interest rates, spendthrift Americans will have more of an incentive to save, while also making it more expensive to pay down debt – a powerful disincentive.

Now, if only the central bank could find a way to revive stagnant wages…


Stuck on Zero Shocker Thu, 09/14/2017 - 17:50 Permalink

We own a number of rental properties with renters who live paycheck to paycheck. Half of the year they are paying us back for earlier missed rental payments and the other half of the year they're desperate for roomates to share expenses. Of course this never keeps them from buying $14K motorcycles, attending $200/seat concerts etc. They also never cook for themselves ... they just have to eat out every meal and stop three times a day at Starbucks.

In reply to by Shocker

AGuy Raffie Thu, 09/14/2017 - 17:24 Permalink

Question: How many Americans are using Credit cards to meet ends? I see that CC debt is soaring pretty fast these days.

I suspect that 97M are not living paycheck to Paycheck, but on Credit cards, using their Paychecks to to pay the interest on their debt. I know of a couple of people using CC to mean ends.

In reply to by Raffie

FreeShitter Thu, 09/14/2017 - 17:10 Permalink

And yet americans keep voting to keep this rigged system AGAINST you going...its all yall's damn fault. Stop voting, stop working, stop paying your taxes, and  starvethisfuckingbeast 

cherry picker FreeShitter Thu, 09/14/2017 - 17:31 Permalink

You got that right. My plan is different.  I am planning on starting a virtual nation with a crypto coin that will be backed by the full weight of this virtual nation.  the difference between the virtual nation's coin is that people can pay a fixed fee to join this nation which will have its own passports.  once this virtual nation becomes large enough it can replace the blood sucking current nations and we may be to enjoy peace and prosperity.

In reply to by FreeShitter

Curiously_Crazy cherry picker Thu, 09/14/2017 - 20:47 Permalink

To late sorry, that was done over a decade ago ;)I forget the name, but there was a game that was around similar to "The Sims" but it was an online virtual world where you were the Sim. Your character would go to work to earn virtual currency to buy a virtual house; you'd buy virtual coffees with your virtual friends.. on your days off you might want to go to the virtual beach or something. The mega wealthy owned virtual islands in the virtual world.

In reply to by cherry picker

FreedomWriter Thu, 09/14/2017 - 17:19 Permalink

Which raises some interesting questions, Motley Fool. Where did all those middle class investors go?Where did all the money fueling the 4 trillion stock market boom come from?How can people with no savings profit from this YUUUGE  stock market?Ummmmm....... the short answer? They can't and won't.It is very fifties, but hey what do you want? Some kind of boom economy that might float all boats? Apparently not.Let's hope the Trump administration does bring back jobs and an environment which rewards ingenuity and the sharing of wealth. The incumbent US congress and Senate seems to have other plans. Excuse me if my faith is wavering. Can we ask them to get out of the way? Will they listen?

yellensNIRPles Thu, 09/14/2017 - 17:14 Permalink

The smart, tough people in the next few years will learn to live without any debt, learn to live with less in general and stay out of 'the system' as much as is legally possible to reduce their tax burden and limit risk.The rest will be debt slaves praying the casino known as the FED will save them, and they will suffer greatly for that faith for years to come. We will hear stories of people who timed the top just right and got out rich before the next big crash, but those will be few and far between and mostly based on either luck or illegal insider information.The 'believers', most of them, will lose everything.

AGuy ET (not verified) Thu, 09/14/2017 - 17:27 Permalink

"Actually, the smart, tough people will get into huge amounts of debt, buy up hard assets, and then pay off their debts with devalued currency."

Not smart at all, since when the debt bubble pops a lot of assets will suffer deflation. Other like PM & Real estate will either get taxes (ie Property tax or Capital gains).

Ideally it would be better save, and then buy up devalued assets when people are desperate for capital.

In reply to by ET (not verified)

ET (not verified) AGuy Thu, 09/14/2017 - 17:49 Permalink

That's not what I recommend, though.Hugo Stinnes was a smart guy, though, for buying up dozens of newspapers to shape public opinion on debt and on his businesses and thereby control the policymakers to his advantage.People following a similar plan are Mark Zuckerberg (social media titan), Warren Buffett (couple dozen local newspapers) and Jeff Bezos (Washington Post).http://www.businessinsider.com/warren-buffett-buying-newspapers-2013-3/…

In reply to by AGuy

Is-Be ET (not verified) Thu, 09/14/2017 - 17:57 Permalink

The deflation/inflation argument must be settled first.I'm of the opinion that what comes out of thin air can go back into thin air. Its all a pea and thimble trick.For instance Japan is said to be printing with gay abandon. Japan has low unemployment, a decent per capita income, a three day holiday once a month etc and so forth.The gyrations and machinations of the Big Money is pure Kabuki.However, I have tried being in debt and didn't enjoy the experience.

In reply to by ET (not verified)

ET (not verified) Thu, 09/14/2017 - 17:14 Permalink

What will people want when they run out of money?More money.The money printers will happily oblige.