The Percentage Of Low-Income Households Living Paycheck To Paycheck Might Surprise You

The experience of getting a paycheck, then immediately sinking it into rent, car payments, and groceries, leaving little to savings, is very common in the United States. This is particularly true in a year where steep tariffs have affected consumer prices, with many Americans having to pay for them at the point of sale. Additionally, while the Consumer Price Index Percentage (CPI) of inflation has eased, prices continue to rise nationally, according to the Bureau of Labor Statistics. All of these factors have created an environment where the Bank of America Institute says nearly a quarter of Americans are living paycheck to paycheck.

In the past four years, more Americans have been living under a strict budget, with even many high earners living paycheck to paycheck. While high-income households did see an increase in those living paycheck to paycheck, in 2025, the most telling percentage came amongst low-income households. In this regard, the report outlined that 29% of low-income Americans are living paycheck to paycheck. This number is up by 2% from the numbers reported by the institute in 2023.

There is no definition of what qualifies someone to be living paycheck to paycheck. However, the Bank of America Institute defined it roughly as a household spending over 95% of its income on necessities, including housing, groceries, and gas, among other burdens. It is under this definition that nearly 30% of low-income households are living paycheck to paycheck. 

While high-income wages have continued to rise, the average income of low-income households has stagnated. In fact, high-wage incomes have outpaced the growth of low-income households regardless of generation. While it can be hard to tell if you are officially low income, if you make less than the national poverty level, you are considered low income. For 2025, Healthcare.gov reports the federal poverty level as $15,650 for a single person or $32,150 for a family of four.

Though the average national rent according to Zillow has not risen considerably, sitting at $2000, the rest of individuals' necessity spending has risen.The report notes the largest factor in the growing number of low-income people struggling to save is that the CPI inflation rate has outpaced wage growth. Additionally, consumer prices on common groceries like beef, necessities like gasoline, and power have all risen in the past year.