Paycheck-to-paycheck crisis reaches six-figure earners, new report reveals

A growing number of Americans earning six-figure salaries are living paycheck to paycheck.

Nearly two thirds of respondents to a new survey said their financial position was worse than they had anticipated, while more than 70% described the past year as financially stressful. The proportion of cash-poor Americans unable to absorb an unexpected expense has grown by almost 17% since the first edition of the Cash Poor Report in 2023.

The report, released by fintech SoLo Funds, found that 44% of Americans describe themselves as cash-poor, defined as holding less than $200 in savings. One in five of those individuals earns more than $75,000 a year, highlighting how rising costs are stretching budgets well beyond traditional low-income brackets.

The annual study, conducted in partnership with Opinium Research, Morgan State University, the Global Black Economic Forum, the Aspen Institute Financial Security Program, and the Independent Women's Forum, surveyed 2,000 US adults.

Millennials and Gen X together account for close to 60% of the cash-poor population, with Millennials making up the largest share at 35%.

For the first time, Gen Z represents a bigger segment of cash-poor Americans than Baby Boomers. Around 38% of Gen Z respondents and 39% of Millennials said they had been refused a checking account, pointing to widening gaps in financial access for younger adults.

Despite their struggles, 41% of cash-poor Americans work full-time, with nearly half supplementing their income through a side hustle.

True cost of borrowing

The report also mapped the true cost of short-term borrowing, noting that fees beyond headline interest rates, including origination charges, subscription costs, and late payment penalties, add substantially to what consumers actually pay.

Subprime credit cards generated an estimated $17.4 billion in annual borrowing costs, making them the most widely used and most expensive option. Buy now, pay later products cost consumers $3.1 billion a year, while earned wage access and cash advance services came in at around $1.6 billion. Peer-to-peer fintech lending, at approximately $925 million in annual costs, was identified as the least expensive category in the study.

Friends and family remain the second most common source of emergency funds, drawn on by 37% of cash-poor Americans, a figure that points to persistent gaps in affordable formal borrowing options for those most under financial pressure.