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Yet a new analysis of internal firm data found 26% of households are living paycheck to paycheck, based on how close their spending on necessities is to their total household income. Necessity spending includes gas, food and utilities, internet service, public transportation and health care.
Sixty Percent of US Consumers Live Paycheck to Paycheck – That Could Change in 2024. Persistent inflation and increasing prices for essential items, from groceries and utilities to fuel, have left most Americans treading water financially in recent years. And 2023 was no different.
Among those with salaries and other income totaling $75,000 to $100,000, 23% are just scraping by, up from 19% in 2019. For those earning $101,000 to $150,000, 22% are spending nearly all their money on basics, up from 18%.
Upper middle-class income range ($116,898 to $150,298)
The average annual average salary in the U.S. is $63,795. The median annual salary, which is often less skewed by outlying numbers, is $59,384. It's worth noting that average and median salaries vary quite a bit by state.
Based on that figure, an annual income of $500,000 or more would make you rich. The Economic Policy Institute uses a different baseline to determine who constitutes the top 1% and the top 5%. For 2021, you're in the top 1% if you earn $819,324 or more each year.
Thirty-three percent of workers earning between $50,000 and $79,999 annually say they're living paycheck to paycheck, compared to 36 percent of workers earning between $80,000 and $99,999 and 24 percent of workers earning $100,000 or more. Other Bankrate data supports these survey findings.
Even though household net worth is on the rise in America (at $156 trillion at the end of 2023)—so is debt. The total personal debt in the U.S. is at an all-time high of $17.5 trillion. The average American debt (per U.S. adult) is $66,772, and 77% of American households have at least some type of debt.
Trends show that in 2024, households with outstanding credit card debt were less frequently Financially Healthy and more frequently Financially Vulnerable than those without credit card debt.
Salary vs hourly: What's the Difference? According to the latest Labor Department Data, 82.3 million workers ages 16+ were paid at hourly rates. That's a whopping 58.1% of all workers in the US, while the other 41.9% makes up the rest of the full-time salaried workforce.
Only 18% of individual Americans make more than $100,000 a year, according to 2023 data from careers website Zippia. About 34% of U.S. households earn more than $100,000 a year, according to Zippia.
Living paycheck to paycheck isn't necessarily bad
For many consumers, NerdWallet found that the paycheck-to-paycheck feeling doesn't mean you are broke; you are just “tightly budgeted.” Let's say you manage to live on a 50-30-20 budget, allocating 50% of your income to needs, 30% to wants and 20% to savings.
According to the Federal Reserve's Survey of Consumer Finances (SCF) for 2022 (the most recent study released publicly), the average savings balance for people ages 64 and younger ranged from $20,540 to $72,520, with median balances ranging from $5,400 to $8,700.
Most Americans are not saving enough for retirement. According to the survey, only 14% of Americans have $100,000 or more saved in their retirement accounts. In fact, about 78% of Americans have $50,000 or less saved for retirement.
Those will become part of your budget. The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. The savings category also includes money you will need to realize your future goals.
That's a record-high percentage — the highest (tied with 2023) since Bankrate began asking the question in 2011. Additionally, 54 percent of U.S. adults have more in their emergency fund or savings, and 10 percent have no credit card debt and no savings.
In 2022, the national middle-income range was about $56,600 to $169,800 annually for a household of three. Lower-income households had incomes less than $56,600, and upper-income households had incomes greater than $169,800. (Incomes are calculated in 2022 dollars.)
Probably 1 in every 20 families have a net worth exceeding $3 Million, but most people's net worth is their homes, cars, boats, and only 10% is in savings, so you would typically have to have a net worth of $30 million, which is 1 in every 1000 families.
The state of salaries in the U.S.
Massachusetts tops the lists of states with the highest salaries, but its cost of living is 46% higher than the national average.