Owing to ballooning basic expenses and, in many cases, the cost of maintaining an expensive home, one in five households earning at least $150,000 a year are currently living paycheck to paycheck, the bank wrote in an October note, based on spending data and account information among U.S.-based customers. (Paycheck to paycheck, by BofA’s definition, means spending over 95% of income on necessities like food, electric bills, childcare, and rent.)

To be expected, households earning below $50,000 annually are by far the most represented in the paycheck-to-paycheck group, accounting for 35% (up from 32% in 2019). As households earn more and more, their proportion drops.  

Six-figure stress: ‘How could this be?’

Yes, even those with six figures often find themselves digging around for extra money to keep above water. (A MarketWatch survey of high earnings from earlier this year echoed BofA’s findings.) The problem is mostly due to the outsize impact of lifestyle creep in all its pernicious forms, the Bank of America report authors say. 

“Households living paycheck to paycheck have either higher necessity spending, lower incomes, or a combination of both,” they write, adding that their data suggests that “households living paycheck to paycheck have over 90% higher necessity spending than households who do not live paycheck to paycheck.”

Another reason: When families hit a certain income threshold, all that “necessity spending” ends up relatively higher, often outpacing their salary. Namely, “higher-income households may have bought larger, more expensive homes and consequently have bigger mortgages,” BofA writes. 

Big homes, they add, accompany bigger everything: insurance costs, property taxes, utilities, care, and maintenance. 

Time doesn’t heal all

Worse news: The share of paycheck-to-paycheck households mostly rises with age. More baby boomers, who are largely retired, live paycheck to paycheck than any other age group. Gen X, then, have the highest share of paycheck-to-paycheck households among those who are still getting most of their income via participation in the labor market. 

The plight of Gen X, as BofA points out, echoes its earlier research finding that those individuals tend to have the highest share of necessity spending of anyone. 

But across the board, there’s been a rise in the share of paycheck-to-paycheck households since 2019, BofA finds. One in four households fit the bill. That’s despite the fact that inflation has relatively cooled; it’s still stubborn enough to create lasting sticker shock for working Americans. 

And whether or not workers are actually in a precarious financial position, a large share feel as though they are. In BofA’s Market Landscape Insights Study, nearly half of respondents said they agree with the statement “I am living paycheck to paycheck,” a share that’s steadily risen over the past two years. 

This, BofA wrote, “likely reflects the impact of higher consumer prices on people’s perceptions and experiences of their finances.”