LendingClub study finds 60% of Americans living paycheck to paycheck
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SAN FRANCISCO – As the holiday season approaches, a new report from LendingClub (NYSE:LC) reveals that 60% of Americans continue to live paycheck to paycheck, with those earning under $50K being the most affected at a rate of 76%. Despite financial challenges, 77% of consumers are expected to engage in holiday shopping, a slight decrease from last year.
The study, part of LendingClub’s Reality Check series, highlights the economic pressures facing consumers. A notable 38% feel worse off financially than they did last year, with inflation outpacing wage growth for 58% of Americans. Millennials are feeling the pinch particularly hard, with many expecting to overspend due to inflationary pressures.
In light of these concerns, spending plans indicate a degree of caution. Credit card use for holiday purchases is anticipated at 27%, while Buy Now, Pay Later (BNPL) services are projected at 20%. Interestingly, credit-financed purchases have declined to just 13%.
Despite the overall reduction in credit usage for holiday expenses, credit cards remain the most popular financing option. However, there’s a growing trend towards combining credit with savings to fund festive spending. Generation Z consumers are especially likely to tap into their savings, with 53% planning to use more than half for holiday expenses.
Alia Dudum, Money Expert at LendingClub, urges consumers to avoid overspending and practice responsible budgeting to prevent financial strain after the holidays. With 37% of consumers planning to dip into their savings and heightened anxiety about the economic outlook, it’s clear that while the festive spirit remains strong, many will approach this season with fiscal restraint and uncertainty.
