In a Paycheck-To-Paycheck Society, Every Dollar Counts

The latest data on the U.S. economy has confirmed what all of us already knew: that the cost of everyday goods and services is rising, and for now at least, doesn’t show any signs of slowing. This is unwelcome news for all U.S. consumers, but especially for those among us who live paycheck-to-paycheck, who must now be even more disciplined about how they spend each dollar they make.

What may be surprising is the scope of the problem. A recent report by LendingClub and PYMNTS, titled “Reality Check: Paycheck-to-Paycheck” found that a full 54 percent of U.S. consumers – or, 125 million adults – are currently living paycheck-to-paycheck. Worse yet, 21 percent of U.S. consumers report difficulty paying their monthly bills.

While it might be expected that more than 70 percent of those earning less than $50,000 per year fall into the paycheck-to-paycheck category, some may be surprised to learn that the issue actually extends across all income bands. The report found that earning more than $100,000 per year is no guarantee of financial security, with almost 40 percent of consumers with six figure incomes living paycheck-to-paycheck and 12 percent of those struggling to pay their bills on time.

The problem also extends across all demographic groups, with Millennials currently bearing the brunt (more than 75 percent live paycheck-to-paycheck), due in large part to outsized student debt loads, rapidly increasing cost of housing and the residual impact of the Great Recession, now bookended by the current economic situation.

So what does this mean for financial institutions? It means that it is safe to assume that a significant portion of your customer or member base falls into these categories, and they need help. For FIs that are committed to supporting the “financial wellness” of the customers and members they serve, more needs to be done. Working with consumers on their long-term financial planning is well and good (in fact, it is vitally important), but what many U.S. consumers need in the current economy are tools that can help them save money in the immediate term. In short, they need help now.

A good place to start is through subscription management and bill negotiation services. By enabling consumers to easily unsubscribe from their unwanted subscription services and/or renegotiate the terms of some of their monthly bills through a simple click of a button within their digital banking app or online banking, FIs can help their customers and members quickly and easily save money on recurring monthly expenses. 

The team at ApexEdge has proven experience working with financial institutions to better engage with their customers and help them realize meaningful savings on their monthly bills. To learn more about how your bank or credit union can build stronger relationships with your customers and members by helping them save money, contact us.