Living isn’t easy, and it’s most certainly not cheap. For many Americans, living paycheck to paycheck is the norm — a strain on finances they are all too familiar with.
A record-high 67% of consumers are living paycheck to paycheck, according to a November 2024 survey conducted by Pymnts.
Even the largest living adult generation in the U.S., millennials, is not exempt from financial struggles. As this generation constitutes 72.7 million Americans as of 2023, millennials (those born between 1981 and 1996) are the largest generation in the workforce. While some are at the peak of their careers, they are still struggling to bridge the gap between paychecks.
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Here are seven things holding millennials back financially and keeping them stuck in a paycheck-to-paycheck cycle, according to the Pymnts survey.
An Unstable Employment Situation
The least common cause of living paycheck to paycheck in the survey was an unstable employment situation, with only 10.7% of millennials citing it as the reason for their financial struggles.
While it may be the lowest on this list, that percentage still represents nearly 8 million millennials facing employment instability. According to the latest Bureau of Labor Statistics data from December 2024, the unemployment rate for Americans aged 25 to 34 is 4.5% and it’s 3.4% for those between 35 and 44 — both higher than the 3.1% unemployment rate for individuals 55 and older.
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Medical Bills
Living paycheck to paycheck can be inevitable when surprise medical bills hit unexpectedly and eat away at savings. For 14.3% of millennials, medical expenses are the leading culprit of their financial strain.
With many millennials caring for elderly parents and raising children, all while addressing their own health challenges, medical bills can be a major burden for this generation.
A Significant Amount of Savings Recently Used
Life happens, and sometimes unexpected expenses strike when you least expect them, leaving savings suddenly depleted. Nearly one-fourth (23.2%) of millennials cite recently spending a significant portion of their savings as their reason for living paycheck to paycheck.
While the survey doesn’t dive into what their savings went toward, the sharp increase in the percentage of millennials facing this issue highlights the importance of financial recovery.
Whether it be unexpected housing costs, a car repair or a medical emergency that depleted savings, replenishing the funds is critical — even if you’re already stretched thin. Whether you live more frugally or take on additional work, rebuilding a financial safety net quickly is key to being prepared should another emergency arise.
Splurging
It’s easy to get swept up in buying things you don’t need, especially for a little serotonin boost. For 23.6% of millennials, splurging is the culprit behind their paycheck-to-paycheck lifestyle.
Some in this generation do splurge on certain items, with a McKinsey & Company report revealing that millennials splurge on apparel (38%), dining out (36%) and footwear (31%).
Costs of Other Family Members
Providing financial support to family members can stretch finances pretty thin, and 30.7% of millennials cite paying for expenses for family as the reason they’re living paycheck to paycheck. Millennials were more likely than other generations to cite this as their primary financial strain.
While it might feel rewarding to help your family, helping others at the expense of your own financial well-being is not ideal long term. To avoid long-term repercussions on your financial security, assess how much you can realistically contribute to your family and set clear boundaries to protect your finances if needed.
A Large Amount of Debt
Whether saddled with student loans, credit card debt or both, 37.7% of millennials point to a high level of debt as the reason they’re stuck living paycheck to paycheck.
Despite being in their “career prime,” many are saddled by significant debt, with the average millennial individual carrying $6,642 in credit card debt, per Experian, and $40,438 in student loans, according to Experian.
Insufficient Funds
The top culprit? Not having enough money. Nearly half — 43.5% — of millennials cite insufficient funds as the reason for living paycheck to paycheck.
This issue isn’t unique to millennials. Across every generation, insufficient funds rank as the leading cause of tight finances, with baby boomers and seniors reporting this reason even more frequently than younger generations.
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This article originally appeared on GOBankingRates.com: 7 Things Millennials Say Cause Them To Live Paycheck to Paycheck
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