1 in 4 U.S. households are living paycheck to paycheck, Bank of America says

Almost a quarter of U.S. households are living paycheck to paycheck in 2025, according to new data from the Bank of America Institute. 

Nearly 30% of lower-income households are living off of their paychecks, about a two percentage point increase from 2023, while less than 25% of middle-income earners are living paycheck to paycheck and less than 20% of high-earners are doing so, the survey found.

Wage growth in lower- and middle-income households hasn’t kept up with the rate of inflation this year, meaning the rising cost of goods has grown faster than income for a large portion of the country. The bank estimates that middle-income households’ wages grew 2% year-over-year and lower-income wages increased just 1% year-over-year in October.

Lower-income Millennial and Gen X households have been hit the hardest, according to the survey released Monday. Households living paycheck to paycheck based in the Northeast and Midwest increased this year, while those in the South and in the West actually decreased. 

“The South and West had some of the lowest inflation rates in the country last year, likely easing some of the financial burden for consumers in these regions,” Joe Wadford, economist at the Bank of America Institute, said in the survey, noting that inflation is beginning to rise in these areas. “So, in our view, it is possible that these rising costs may renew or expand financial pressure on consumers in these areas after only a brief respite.” 

The paycheck to paycheck data is based on a sample of U.S.-based households that primarily bank with Bank of America. The survey defined living paycheck to paycheck as a household’s “necessity spending” — which it categorized as childcare, gas, groceries, housing, insurance, and more — exceeding 95% of their income.