More Americans are living paycheck to paycheck than previously thought. Some make up to $150,000

New research from Bank of America shows that more Americans than previously thought consider themselves living "paycheck to paycheck," including families making $150,000 a year.

Roben Farzad, host of the podcast “Full Disclosure,” defines living paycheck to paycheck as having no money left to save or invest after paying for necessities like groceries, child care, car payments or housing costs.

This group of Americans living paycheck to paycheck includes one in five households with an annual income of $150,000 or more. Farzad says that $150,000 per year has historically been thought of as aspirational, but it doesn’t mean as much now as it used to.

“They didn't expect, for example, that the purchasing power of the U.S. consumer dollar has been cut by 53% since 1995,” Farzad says. “So $150,000 is not really $150,000.”

Farzad says that inflation is largely to blame. He notes that most things — from car and home insurance payments to credit card interest — have shot up 20% to 25% since before the COVID-19 pandemic. The only thing that hasn’t gone up is wages.

“You thought you had it figured out. You thought you had these numbers crunched in your head, but things fell apart. Things fell out of whack,” Farzad says. “This demonstrates that it happens to people making $50,000 overwhelmingly, $75,000, but even twice that and upward.”

Plus, Farzad says that some people are not budgeting well because they see their paycheck stretching further than it actually does based on old cost breakdowns. The United States had its credit rating downgraded in 2011, but consumers kept spending on credit and the impact is still shaking out, Farzad says.

“We thought we got too big for our britches, but if anything, people have extended themselves even more,” he says. “You see the national debt. You see credit card balances. You see mortgage balances.”

As far as the upcoming election goes, Farzad says personal finances are a major factor in how people will vote.

“People are angry, even though the economy and the markets are in great shape,” he says. “We're feeling capital-I inflation for the first time in 40 years.”

Thomas Danielian produced and edited this interview for broadcast with Micaela Rodriguez. Grace Griffin adapted it for the web.