No one likes surprises when it comes to financial planning, but many people can afford to ride out the unexpected payment more than others. However, for those who live paycheck to paycheck, an unexpected expense can upset their financial situation and significantly increase their stress levels.
Our research reveals that paying an emergency expense “can be a significant challenge for all consumers who live paycheck to paycheck, especially for those who struggle to pay their bills each month.”
About half of the consumers we spoke to for the February 2022 edition of “New Reality Check: The Paycheck-to-Paycheck Report,” a PYMNTS and LendingClub collaboration, say they would be unable to handle an expense of emergency of $400 depending on their current financial situation. situations.
This group is led by Gen Z consumers living paycheck to paycheck and having trouble paying their bills, with nearly three in five respondents (59%) not being able to pay a $400 emergency expense.
More than half of Gen X consumers who live paycheck to paycheck and struggle to pay their bills (51%) wouldn’t be able to afford a $400 emergency expense, while the same goes for 46% of millennial bridges, 44% of millennials, and 42% of baby boomers and seniors who live paycheck to paycheck and struggle to pay their bills.
Our data also indicates that consumers who live paycheck to paycheck and struggle with their bills are more likely to sell something, borrow from family or friends, or are using a credit card to pay for an emergency expense than they are using money from a check or savings. Account.
In the February 2022 edition of New Reality Check: The Paycheck-to-Paycheck Report, a PYMNTS and LendingClub collaboration dubbed The Generational Divide Edition, we examine why consumers of different generations are living paycheck to paycheck and what they see as the biggest stressors on their finances.
The report is based on information from a survey of 3,070 US consumers conducted from December 2 to 14, 2021, as well as an analysis of other economic data.
However, consumers who live paycheck to paycheck with no problem paying their bills and those who don’t live paycheck to paycheck are much more likely to use funds from their checking accounts or savings to pay for an emergency expense of $400.
According to our research, among consumers who live paycheck to paycheck without bill-paying problems, nearly half of almost all generations would cover emergency expenses with money from their checking accounts or savings.
A third (34%) of Gen Z consumers who live paycheck to paycheck and have no trouble paying their bills would use money from their checking or savings accounts to pay an emergency expense, making them the least likely to do so.
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NEW PYMNTS DATA: 70% OF BNPL USERS USE BANK PAYMENT OPTIONS, IF AVAILABLE
On: Seventy percent of BNPL users say they would prefer to use the installment plans offered by their banks – if only they were made available. PYMNTS’ Banking On Buy Now, Pay Later: Installment Payments and the Untapped Opportunity of FIssurveyed over 2,200 US consumers to better understand how consumers view banks as BNPL providers in a sea of BNPL pure-players.
