52% of Gen Z Borrow Money to Make Ends Meet

Aug 2, 2023Financial Literacy, News

A recent collaboration between PYMNTS and LendingClub, entitled “New Reality Check: The Paycheck-to-Paycheck Report — The Household Finances Deep Dive Edition,” found that members of Gen Z are the most likely to have borrowed money to meet expenses over the last year at 52 percent, followed closely by 51 percent of consumers who live with their parents or siblings. 

“We found that 47% of those living with friends or housemates received financial support from a household member,” the study reads. “Urban dwellers and consumers living paycheck to paycheck with issues paying their bills, at 44% each, are also more likely than average to have received such financial support.”

One’s living situation, as well as one’s stage of life, were decisive factors in explaining which U.S. consumers have been living paycheck-to-paycheck in 2023. 61 percent of consumers lived paycheck to paycheck in June 2023 and 21 percent struggled to meet expenses, which are the same figures seen in June 2022. 

The data shows that a reliable way to manage finances is to live in pairs, ideally with two incomes. The report found that consumers not living paycheck to paycheck “are most likely to reside in two-person households, at 41%.” 

While those living alone tend to have the lowest credit card balances, they typically pay the most for housing and have no one to help bear regular household expenses, so they generally struggle between paychecks. 

Additionally, the study states that “consumers who reside with dependent children are more likely to struggle financially. This can be attributed to an increase in the ratio of income earners to members of the household, resulting in a higher likelihood of financial distress.”

80 percent of consumers living with children under 18 reported outstanding credit card balances, and those living with children under 18 have average outstanding balances that are 50 percent higher than consumers who live alone. 

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