QoD: Making $250k+ but living paycheck to paycheck

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It’s gotta be a low number, right?

Table of Contents

Answer: 20%

Questions:

In your own words, what does it mean to live paycheck to paycheck?
Between which income groups is there the biggest DECREASE in living paycheck to paycheck? Why do you think that is?
Why might someone earning a high salary still struggle to save money?

Here are the ready-to-go slides for this Question of the Day that you can use in your classroom.

Behind the numbers (Bank of America Institute):

“Digging a little deeper into the characteristics of paycheck to paycheck households, we find that, intuitively, lower-income households are more likely to live paycheck to paycheck (Exhibit 3). Based on Bank of America internal data, around 35% of households with incomes below $50K a year are living paycheck to paycheck, up from 32% in 2019.

More surprising is that the proportion of households appearing to live paycheck to paycheck falls only slowly as incomes rise. Around 20% of households with incomes above $150K also appear to be living paycheck to paycheck. How can this be? One reason is that higher-income households may have bought larger, more expensive, homes and consequently have bigger mortgages. And often along with bigger homes come bigger insurance costs, property taxes and utility bills (See: Hidden costs of homeownership). It is also possible that as household incomes rise, some households may have more varied sources of income that are hard to capture – such as cash from sales of equities paid into brokerage accounts.”

About
the Author

Kathryn Dawson

Kathryn (she/her) is excited to join the NGPF team after 9 years of experience in education as a mentor, tutor, and special education teacher. She is a graduate of Cornell University with a degree in policy analysis and management and has a master’s degree in education from Brooklyn College. Kathryn is looking forward to bringing her passion for accessibility and educational justice into curriculum design at NGPF. During her free time, Kathryn loves embarking on cooking projects, walking around her Seattle neighborhood with her dog, or lounging in a hammock with a book.