October 2025
PYMNTS Data Books

Paycheck to Paycheck 2025: How Rising Prices and ‘Wishful Thinking’ Are Redefining Consumer Financial Stability

Americans say they’ll save more next year—but the numbers tell a different story. Even households with healthy balances are feeling the squeeze. Most consumers believe they could handle a $2,000 emergency, but behind every “doing fine” is a fragile cushion that could vanish in one bad month.

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    PYMNTS Intelligence’s August survey of 2,215 U.S. adult consumers for the latest Paycheck-to-Paycheck Report finds a widening gap in savings behavior. Strong savers are pulling further ahead, while households without buffers are falling behind. Rising living costs, fragile financial cushions and overly optimistic expectations about future improvement define today’s uneven financial reality.

    The paycheck-to-paycheck lifestyle is easing.

    The share of consumers living paycheck to paycheck declined slightly after last month’s spike, indicating a temporary reprieve in household liquidity but not a structural change.

    A gap exists in consumers’ ability to save.

    Half of consumers who saved more than 30% of their income in the past six months say their ability to put aside dollars improved, while 38% of those who saved less than 10% say it worsened. The gap is self-reinforcing: Households with bigger cushions are building more, while low savers slip further behind.

    Those living paycheck to paycheck are spending more than they save.

    Rising costs are pushing struggling households to spend more while better-off ones cut back. More than one in three (34%) consumers who live paycheck to paycheck but struggle to pay their bills report spending more than usual in the past six months, compared with just 17% who saved more—a behavior driven largely by price and cost of living increases and fears of inflation.

    Rising costs are affecting everyone, not just those living paycheck to paycheck.

    Rising living costs constrain savings even among higher-income households. Thirty-one percent of non-paycheck-to-paycheck consumers say inflation has crimped their ability to put aside dollars. This share is nearly the same for those living paycheck to paycheck: 38% who live this financial lifestyle without issues paying bills and 34% of those who struggle to pay bills say the same.

    Confidence in covering emergency expenses varies.

    Only 48% of consumers feel confident they could come up with the cash needed to cover a $2,000 emergency in 30 days, despite half holding more than $2,500 in liquid savings. Confidence varies sharply, at 80% among households not living paycheck to paycheck versus just 15% among those struggling.

    Consumers are optimistic about saving, but many are not actually putting money away.

    Fifty-two percent of consumers expect to save more in the next year, but only 24% increased their savings in the past six months. Even among those not living paycheck to paycheck, 70% cite barriers to saving, suggesting that optimism outpaces reality.

    Baby boomers show a barbell effect in savings profiles.

    Baby boomers’ savings profile is polarized: 44% hold more than $15,000 in non-liquid savings, and many have much more. More than one-third report no non-liquid savings. The data reveal a “barbell” effect—strong wealth at the top, fragility at the bottom—that underscores uneven readiness for retirement.

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    PYMNTS INTELLIGENCE

    PYMNTS Intelligence is a leading global data and analytics platform that uses proprietary data and methods to provide actionable insights on what’s now and what’s next in payments, commerce and the digital economy. Its team of data scientists includes leading economists, econometricians, survey experts, financial analysts and marketing scientists with deep experience in the application of data to the issues that define the future of the digital transformation of the global economy. This multi-lingual team has conducted original data collection and analysis in more than three dozen global markets for some of the world’s leading publicly traded and privately held firms.

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