The Blubber

More than a third of Americans earning at least $250,000 annually say they are living paycheck to paycheck

More than a third of Americans earning at least $250,000 annually report living paycheck to paycheck, highlighting how inflation is impacting budgets across the income spectrum. About 36% of households earning nearly four times the median U.S. salary dedicate nearly all of their income to household expenses, according to a survey by Pymnts.com and LendingClub Corp.

This trend is particularly pronounced among millennials, who are now in their mid-20s to early 40s. More than half of top earners in that generation report having little left at the end of the month.

The $250,000-plus income bracket roughly represents the top 5% of earners in the country, according to U.S. Census Bureau data. Living paycheck-to-paycheck doesn’t necessarily mean hardship; LendingClub distinguishes between those who can pay their bills easily and those who cannot. Only about one in ten high earners reported issues covering all their household expenses in April, according to the survey.

Housing expenses, which typically consume large portions of wealthier people's budgets, have surged during the pandemic. For example, in Orange County, California, a top-tier home cost $1.7 million in April, up from $1.2 million in February 2020, based on Zillow Group Inc. data. A mortgage on that house, assuming a 20% down payment, would cost about $100,000 per year, or 40% of a $250,000 annual pre-tax income.

Top earners, even those struggling to pay bills, are still better off than the rest of the nation, which faces soaring prices for everything from food to gas and electricity. Among all consumers surveyed, 61.3% reported living paycheck-to-paycheck in April, a 9 percentage-point increase from a year earlier, according to LendingClub.

To finance their lifestyles, higher-income households are more likely to put expenses on credit cards but also more likely to pay off their balance in full. U.S. consumer borrowing soared in March by the most on record as credit-card balances ballooned and non-revolving credit jumped, reflecting the combined impact of solid spending and rising prices.