The share of Americans reporting that they are living paycheck to paycheck has sharply plunged over the last year.
The figure now stands at 48% after a 21-point plunge from the record high of 69% the prior year, marking the lowest level in four years, according to Debt.com.
The survey polled about 1,000 Americans and asked them about their budgeting and spending habits. Says Debt.com,
“But context matters. Nearly half of all respondents are still financially stretched, a number that would have seemed alarming a few years ago. The improvement is real, but it’s not a reason to stop paying attention.”
The study also shows that 95.15% of Americans say rising costs and inflation have elevated the need for careful money management above all else. The figure is unchanged on a year-over-year basis, suggesting that “even people who are doing better financially haven’t concluded that the pressure is over.”
Meanwhile, 85% of adults keep a budget in place, and 88% of budgeters credit the practice with helping them dodge or escape debt entirely.
Retirement planning now ranks as the top budgeting driver for 20% of participants, its highest share ever recorded.
The study adds that 44% of Americans say their whole household works to stay on budget, with 26% reporting they budget independently and 22% saying one partner budgets and the other doesn’t.
“Among those who budget, the results are consistent and clear: the majority say it has helped them manage or avoid debt. The challenge isn’t convincing people that budgeting works. It’s reaching the 15% who still haven’t started and, increasingly, helping the 34% who say they just don’t have the time.”
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