Half of Consumers Say Inflation Has Diminished
Their Capacity to Reach Their Long-Term Financial Goals
SAN
FRANCISCO, Dec. 15, 2022 /PRNewswire/ --
LendingClub Corporation (NYSE: LC), the parent company of
LendingClub Bank, America's leading digital marketplace bank, today
released findings from the 17th edition of the Reality
Check: Paycheck-To-Paycheck research series, conducted in
partnership with PYMNTS. The Financial Goals Edition examines the
motivations behind consumers' ability to save and plan for future
large expenses as well as their long-term financial goals and
expectations.
Today's Paycheck-to-Paycheck Landscape
Sixty-three percent of consumers reported living paycheck to
paycheck in November 2022. Consumers
of all income brackets are increasingly feeling the strain of
inflation, and a growing share of high earners report living
paycheck to paycheck. In November
2022, 47% of consumers earning more than $100,000 per year reported living paycheck to
paycheck, a 4 percentage point increase from 43% in October 2022.
All income groups experienced a rise in paycheck-to-paycheck
consumers between October and November
2022. In November 2022, 76% of
consumers earning less than $50,000
annually were living paycheck to paycheck, compared to 74% the
month prior, and 66% of consumers earning between $50,000 and $100,000 annually were living paycheck to
paycheck, up from 65% the month prior.
Consumers Are Saving Less Overall
One-third of consumers report they are not currently saving any
money, with 60% of such consumers also saying they have no
pre-existing savings. While 36% of consumers overall describe
themselves as stable savers, which are consumers able to save a
fraction of their income on a regular basis (such as monthly or
quarterly), paycheck-to-paycheck consumers are half as likely to be
stable savers and seven times more likely to have neither savings
nor saving capacity than other financial lifestyles. Forty-one
percent of paycheck-to-paycheck consumers living without difficulty
paying their bills are sporadic savers.
Financially struggling consumers report having significantly
less savings than they had in 2021. In fact, half of financially
struggling consumers are unable to save and have no savings at all.
Compared to a year ago, 32% of all consumers have diminished saving
capacity. For those consumers living paycheck-to-paycheck with
issues paying their monthly bills, 42% say their ability to save
has decreased, making them the group most likely to say so. This
group is followed closely by paycheck-to-paycheck consumers living
without difficulty, at 37%. Even among consumers not living
paycheck to paycheck, 25% report that their ability to save has
decreased.
"As we've seen from previous reports, Americans are
cash-strapped and their everyday spending continues to outpace
their income which is impacting their ability to save and plan,"
said Anuj Nayar, Financial Health
Officer at LendingClub. "With average savings stagnating, if not
decreasing, setting financial goals for the new year will become
increasingly difficult for many consumers."
Inflationary Impacts on Short-Term and Long-Term Financial
Goals
Inflationary pressures continue to weigh on consumers as they
set both short-term and long-term financial goals. In fact, 50% of
all consumers surveyed and 43% of those not living paycheck to
paycheck say high inflation has diminished their capacity to reach
their long-term financial goals. This increases to 57% among all
paycheck-to-paycheck consumers. Inflation has also impacted the
short-term objectives of 49% of all consumers and 41% of those not
living paycheck to paycheck, with older consumers and those with
lower incomes the most likely to say so.
Financial lifestyle is also a strong differentiator of the
likelihood of having clearly defined financial goals. For example,
financially struggling consumers are the most likely to lack both
long-term and short-term financial goals. On top of that, more than
a third (36%) of all U.S. consumers have not identified short-term
financial goals, nor have 38% defined long-term objectives.
Saving for retirement is the main reason consumers – especially
baby boomers, seniors and Generation X – set a long-term financial
goal, with 33% of all consumers citing this as their most important
motivation. Building up emergency savings is the second most common
reason, yet only 11% cite it as their most important motivation.
Repaying debt, cited by 14% of consumers, is the second-most
important motivation for setting long-term financial plans.
While the main driver for consumers to set a long-term financial
goal is saving for retirement, one-third of consumers overall cite
repaying financial obligations as a short-term financial objective,
with 18% citing this as their top short-term goal. The most common
motivation for setting short-term financial goals overall is paying
for a trip or vacation, which is cited by 49% of consumers, yet
only 17% say it is their most important reason.
To view the full report, visit:
https://www.pymnts.com/study/reality-check-paycheck-to-paycheck-financial-goals-consumer-savings-inflation/
Methodology
New Reality Check: The Paycheck-To-Paycheck Report — The
Financial Goals Edition is based on a census-balanced survey of
3,895 U.S. consumers conducted from Nov. 4
to Nov. 22, as well as analysis of other economic data. The
Paycheck-To-Paycheck series expands on existing data published by
government agencies, such as the Federal Reserve System and the
Bureau of Labor Statistics, to provide a deep look into the core
elements of American consumers' financial wellness: income,
savings, debt and spending choices. Our sample was balanced to
match the U.S. adult population in a set of key demographic
variables: 51% of respondents identified as female, 31% were
college-educated and 36% declared incomes of more than $100,000 per year.
About LendingClub
LendingClub Corporation (NYSE: LC) is the parent company of
LendingClub Bank, National Association, Member FDIC. LendingClub
Bank is the leading digital marketplace bank in the U.S., where
members can access a broad range of financial products and services
designed to help them pay less when borrowing and earn more when
saving. Based on more than 150 billion cells of data and over
$80 billion in loans, our advanced
credit decisioning and machine-learning models are used across the
customer lifecycle to expand seamless access to credit for our
members, while generating compelling risk-adjusted returns for our
loan investors. Since 2007, more than 4 million members have joined
the Club to help reach their financial goals. For more information
about LendingClub, visit https://www.lendingclub.com.
CONTACT:
For Investors: IR@lendingclub.com
Media Contact: Press@lendingclub.com
PYMNTS Contact: information@PYMNTS.com
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SOURCE LendingClub Corporation