Wallet Lockdown 2024: 2 in 5 Americans Living Paycheck to Paycheck

Inflation has taken its toll on the United States. Basic staples like gas and groceries have skyrocketed in price, yet wages haven’t risen to match. Many people are struggling just to make it to payday. How are Americans coping, and what do their budgets look like? 

We surveyed 899 Americans on the state of their finances, what they’re doing to limit spending, and how they’re feeling about holiday shopping this year. 

Key Takeaways:

• 40% of Americans are reportedly living paycheck to paycheck.
• 68% have delayed major purchases in 2024 due to the cost of living crisis.
• 77% are embracing “underconsumption.”
• Respondents who tried a “no-spend” challenge saved an average of $1,458.
• 49% are stressed about affording holiday shopping this year, and 2 in 3 plan to give fewer gifts with an anticipated holiday spend of $946.

The current cost of living is pushing many Americans to make hard decisions about their spending habits. Among survey respondents, 61% said they work too hard to feel as financially precarious or unstable as they do right now. 

When asked to rate their own financial status, 40% of survey respondents said they’re living paycheck to paycheck, and a further 11% said that they’re unable to make ends meet. The majority, 84%, said their finances have been negatively affected by the cost of living crisis. Some of the top purchases Americans noticed have gone up in price include groceries (75%), utilities (41%), and rent (32%). 

To meet these rising costs, 68% have delayed major purchases or expenses this year. Of those, 72% said it’s negatively affected their quality of life. Some of the top categories delayed or put off entirely include travel (61%), clothing (49%), dental work (47%), a new vehicle (42%), and major electronics (42%). 

With finances at the top of their minds, many Americans are rethinking their personal budgets. The top trends among survey respondents when it comes to budgeting include underconsumption and ‘no-spend challenges’. In fact, 60% of respondents said their 2024 budgets aren’t providing a sustainable quality of life.

The trend of “underconsumption” involves consciously moving away from buying everything as new. This can mean reusing items, thrifting, or taking advantage of hand-me-downs to help save money. Among those surveyed, 77% are embracing underconsumption in 2024.

Additionally, 44% have participated in a ‘no-spend’ challenge. This challenge consists of only spending money on essentials. While more than 1 in 4 found the challenge difficult, those who participated reported an average savings of $1,458. The majority (81%) would do it again, and 69% said it changed how they think about spending. Some participants may be saying thanks to TikTok, as more than 1 in 10 were inspired by the social media platform to try the trend. 

Americans are also combating high prices by finding new forms of income. Nearly 1 in 3 (29%) Americans surveyed currently have more than one job. 

Some (53%) survey respondents are taking no-spend even further, placing themselves on ‘wallet lockdown’ for the foreseeable future to make ends meet. There is light at the end of the tunnel, however: only 18% think their finances will get worse next year. Broken down by generation, the youngest are most optimistic, while 1 in 4 Baby Boomers think things won’t improve for them. Here’s hoping they have enough saved for retirement! 

The prospect of holiday shopping is looming on the horizon as children begin to return to school and summer gives way to fall. Given difficult finances for many, what’s the spending forecast for the holidays this year?

It turns out that over 1 in 10 are already shopping for holiday gifts. Unfortunately, roughly half (49%) of Americans are stressed about affording the holidays this year, and 76% said family gifts cause the most stress. 

Nearly 1 in 3 (30%) have already started saving for the holidays, and 1 in 4 are planning on giving handmade gifts to save money. Many survey respondents (2 in 3) said they’re planning on purchasing fewer gifts, and 54% are relying on big sales like Black Friday to afford presents. 

Despite trying to cut costs, the average American expects to spend $946 on the holidays this year. Some are preparing for this expense, with 1 in 4 starting to save in the fall, but 31% of respondents said they don’t save at all. 

“The results of this survey are both alarming and positive. With the vast majority of consumers saying inflation is negatively impacting their finances, a lot of people are going to be changing their habits,” said BadCredit Finance Expert Erica Sandberg. “The holidays are coming up, and that means more people will be seeking deals or scaling back. Retailers need to prepare for a tight season, with shoppers more reluctant to spend.”

Sandberg continued: “If you are living paycheck to paycheck, taking extreme action such as buying nothing and underconsuming can definitely help put you in the driver’s seat. However, it’s not sustainable in the long-term. For this reason, make sure your budget is flexible. Contract when times are tough and expand — including adding more to savings — when cash is flowing.”

In July 2024, we conducted a survey of 899 Americans to ask about their budgeting habits and how the current cost of living is impacting them. Among respondents, 50% were men, 48% were women, and 2% were non-binary or preferred not to answer. Respondents ranged in age from 18 to 75, with an average age of 39.

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