A new analysis by Bank of America has revealed that nearly a quarter of all households across the U.S. are living paycheck to paycheck in 2025.
The report found that about 24% of households are spending more than 95% of their income on essentials such as housing, groceries, utilities and transport.
That is a rise of 0.3 percentage points from last year, but the increase is much smaller than the jump seen in 2024.
Highlights
- Nearly 24% of U.S. households live paycheck to paycheck, spending over 95% of income on essentials in 2025.
- Lower-income households face rising strain, with 29% living paycheck to paycheck, up from 27.1% in 2023.
- Millennials and Gen X feel the most pressure due to slower wage growth compared to older and higher-income groups.
Nearly a quarter of all American households are living paycheck to paycheck
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This means that while more households are struggling, the number is climbing more slowly than it did a year ago.
The Bank of America this week said the slowdown partly reflects differences across income levels.
The share of lower-income households living paycheck to paycheck has continued to rise, while there has been little change among middle and higher income groups.
Around 29% of lower-income households now fall into this category, up from 28.6% a year earlier and 27.1% in 2023.
The analysis shows that the strain is felt most by Millennials and Generation X, who have seen slower wage growth than older or higher-income households.
Meanwhile, the share of Gen Z and Traditionalists living paycheck to paycheck has barely increased.
The bank’s data suggests that wages for lower-income workers grew by about 1% over the past year, compared with 2% for middle-income earners.
Inflation, meanwhile, rose 3% in September, meaning prices once again increased faster than pay for most households.
Regional differences were also noted. The share of households living paycheck to paycheck fell across much of the South and West, but increased in the Northeast and Midwest.
Bank of America linked this to varying inflation trends, with price growth easing in some southern and western states before picking up again later in the year.
The report warned that renewed increases in living costs could put households under fresh strain after only a brief period of relief.
Despite the slower rate of growth, it said, nearly a quarter of U.S. households have “relatively little or nothing left over” once essential expenses are paid.
“Higher income and lower income households are living in two different worlds,” Joe Wadford, economist at the Bank of America Institute, told CNN.
The outlet also spoke to those impacted by the high costs, including 34-year-old Austin H, who said the construction firm he works at is shutting down and he is barely getting by.
Donald Trump has dismissed growing concerns about affordability as a "con job"
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“I am going to be unemployed in the next month or two – with no safety net,” he told CNN, adding that he is also supporting his partner through her studies.
“To be 34 and living paycheck to paycheck with no savings, things are pretty crappy right now.
“We want to own a house and start a family, but I don’t know how we will ever get our feet under ourselves.”
Younger Americans are not the only ones struggling to afford living costs—65-year-old Vanessa Jones told CNN she had to pick up a second nursing job in 2023.
Jones, who cares for her two grandchildren, even had to file for bankruptcy after she was diagnosed with cancer and hit with $85,000 in medical debt.
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“The cost of living is way too high. My savings have been depleted. I haven’t tapped into my retirement, but that looks like the next step,” she said.
Jones added: “The people claiming prices are lower are not actually buying their own groceries or trying to find the cheapest place to get their car fixed.
“They need to walk in our shoes.”
Donald Trump has dismissed growing concerns about affordability, saying the issue of cost‑of‑living pressures is a “con job” by Democrats and insisting that prices are actually “way down.”