Feel like your paycheck is gone as soon as you get it? Researchers find that’s pretty much true for a lot of us. According to new research, the average American spends more than a third of their paycheck within the first 12 hours of receiving it.
The poll of 2-thousand employed Americans divided evenly by generation reveals:
- Just 48 hours after getting paid, the average person has already spent nearly half (48%) of their paycheck.
- Millennials are the fastest spenders, going through an average of 40% of their pay within the first few hours.
- But it’s not like people are going on a shopping spree, most of that early spending goes toward essentials.
- More than half (52%) buy groceries or necessities as soon as they get paid, along with bills due that week (48%), housing costs and credit cards (42%), and then smaller bills (32%).
- With almost half that paycheck already spent, that leaves just 52% left to get by until they get paid again.
- This may be why only 28% make it a priority to put money into savings right away.
- But 38% of millennials plan out their spending in advance and 32% of Gen X time their payments to match when their paycheck arrives.
- Despite that, about a third (34%) of all respondents admit they overspend in the days right after payday, and that jumps to 52% for Gen Z and 45% of millennials. And it’s often avoidable, thanks to having overdue bills (30%).
- Nearly a quarter (22%) of Gen Z confesses they feel the need to spend as soon as the money hits their account and 18% spend to “keep up” with friends who earn more.
- In an average month, 54% of Gen Z and 43% of millennials “often” feel strapped for cash, compared to just 18% of baby boomers.
- Younger Americans are also paying a lot more in overdraft and late fees. Over the last 12 months, the average Gen Zer has spent 10 times more than what a baby boomer has on those fees: $275 versus $27.
Source: Talker