A new study shows that 1 in 4 Americans have under $100 saved, highlighting the widespread financial strain many people are experiencing.
Brigit has unveiled its inaugural Paycheck to Paycheck Economy Review, based on surveys conducted among non-Brigit users who identify as living paycheck to paycheck, alongside a similar survey of Brigit users.
The findings reveal that 25% of non-Brigit users have less than $100 in savings, underscoring the financial challenges faced by many Americans.
Despite these struggles, there are positive signs among younger generations.
The survey shows that 32% of Gen Z respondents who are non-Brigit users have begun saving for retirement, while 54% have some emergency savings.
In contrast, Brigit users are actively taking steps to enhance their financial well-being.
According to the survey, 60% of Brigit users plan to contribute to their retirement accounts within the next 6-12 months, and 83% are focused on paying down debt.
Additionally, one in three Brigit users intends to return to school or acquire new skills to increase their earning potential.
Hamel Kothari, CTO and co-founder of Brigit, highlighted the findings, stating, “While the average U.S. income is around $60,000, even individuals earning $100,000 are struggling to cover basic expenses.
These results emphasize the urgent need for improved access to financial tools and education to help Americans navigate economic challenges and achieve long-term financial security without the constant stress of living paycheck to paycheck.”
Many Americans find themselves short on cash before their next paycheck after covering essential expenses like monthly bills, groceries, and transportation.
A survey by WalletHub in August 2024 indicated that 74% of Americans felt inflation was hindering their ability to afford everyday necessities.
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Key Findings from the Survey
Savings Challenges
- Savings Strain: 25% of Americans earning under $100,000 have less than $100 in savings.
- Emergency Expenses: 43% would struggle to cover an unexpected $500 expense, potentially leading to financial and emotional distress.
- Retirement Concerns: 62% expressed anxiety about working until retirement due to insufficient financial resources.
Gender Disparities in Savings
- Savings Gap: 30% of women have less than $100 in savings, compared to 21% of men, indicating a significant disparity in financial security.
- Financial Distress: 23% of women stated that an unexpected expense of up to $100 would cause financial strain, compared to only 11% of men.
- Retirement Planning: Over 50% of both genders lack retirement savings, highlighting ongoing challenges in retirement preparedness.
Age-Based Savings Insights
- Millennials and Gen Z: 27% of Millennials and 31% of Gen Z have savings of less than $100, while 48% of Baby Boomers report having over $1,500.
- Retirement Savings: 32% of Gen Z respondents have already begun saving for retirement, and 54% have emergency savings.
Brigit Users Taking Charge of Their Finances
The supplemental survey of Brigit users indicates they are making significant strides in improving their financial health:
- Debt Repayment: 83% are prioritizing debt repayment.
- Retirement Contributions: 60% plan to contribute to retirement accounts in the next 6-12 months.
- Skill Development: One in three users intends to return to school or develop new skills to enhance their earning potential.
- Side Hustles: One in three users has taken on additional work to increase their income.
Methodology
The Paycheck to Paycheck Economy Review is based on two surveys: one of non-Brigit users and another of Brigit users, conducted by Brigit with assistance from Alchemer, an independent third-party provider.
Both surveys targeted individuals earning less than $100,000 annually who identify as living paycheck to paycheck.
- Non-Brigit Users Survey: This survey included 750 respondents aged 18 and older and was conducted in May 2024, utilizing a randomized quota-based methodology to ensure diverse representation.
- Brigit Users Survey: A second survey of over 1,000 Brigit users, also identifying as living paycheck to paycheck, was conducted in August 2024 using a randomized sampling method for broad demographic coverage.
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