American consumers increasingly live in two different worlds when it comes to saving cash that can be tapped immediately. Households already setting aside big chunks of their income and sitting on heftier net worth cushions are getting further ahead, while the rest are falling even more behind. Things are getting better for those doing well financially, and unfavorable for those faring worse. What’s new is that this divide between the “saves” and “save-nots” is widening.

All consumers face rising living costs due to inflation, higher housing prices and elevated interest rates amid an economic landscape defined by uncertainty fueled by the Trump administration’s tariff agenda. PYMNTS Intelligence’s latest research shows that in August 2025, 68% of Americans were living paycheck to paycheck, which can erase the ability to build an emergency fund or invest for the long term. While this rate is slightly lower than the month before, the share of consumers within that group who are struggling to pay their monthly bills climbed to 25% from 24% a month earlier, nearly matching the record-high set a year earlier.

Consumers’ ability to save—and the amount they can save—has changed.

Walking the monthly paycheck-to-paycheck tightrope has consumers struggling to save, especially when it comes to readily available funds that can be used for an emergency or unplanned expense. The average U.S. household now has $9,869 in cash, bank accounts and other highly liquid assets, 10.4% less than they did 16 months ago. Those struggling to pay their bills have a much smaller safety net of just $2,336, a 27.3% drop during the same period. More than half of consumers point to rising costs as a major reason that saving is so difficult. Significantly, people who can spend more aren’t doing so.

These are just some of the findings detailed in “Why Paycheck-to-Paycheck Consumers Can’t Weather a $2,000 Shock,” the latest installment of New Reality Check: The Paycheck-to-Paycheck Report, a PYMNTS Intelligence exclusive series. This edition draws on insights from a survey of 2,215 U.S. consumers conducted from August 5, 2025, to August 19, 2025.

A Widening Savings Divide
Consumers with stronger cash savings are growing their cushions faster.

The data reveals a huge divide in who saves—and how much—in America. The country’s164 million consumers who are currently employed or self-employed put away on average 23% of their income over the last six months. Most readily accessible savings are kept in traditional bank accounts, though financially secure consumers have more invested in places providing higher returns.

Those who are already struggling are falling further behind.

Just how much a person saves, of course, is a function of how much income they bring in, their spending patterns and their decision making about personal finance. Two-thirds of working Americans managed to save at least 10% of their paychecks, including 32% who stashed away more than 30%. At the same time, one-quarter of working individuals saved 10% or less of what they earned, and 8% spent more than they brought in. In a nation of just over 164 million workers, more than 52 million individuals are setting aside little or nothing for emergencies, wish-list expenses or retirement.

Strikingly, consumers in low-income households (less than $50,000 per year) and middle-income ones ($50,000 to $100,000 per year) currently save an identical 20% of their income. This means that many people earning the least are trying hard to save but may never catch up to the middle tier. Meanwhile, neither group can dream of keeping up with individuals in the highest income bracket (household income of more than $100,000 per year), who sock away on average 30% of their typically larger paychecks. These trends underscore how the savings divide is self-reinforcing. Households building larger financial cushions are better positioned to keep saving going forward, while those saving little or nothing due to lower incomes and/or their consumption patterns are falling behind.

Also noteworthy is that Gen Z workers appear to be hedging their bets. They’re saving a larger portion of their income as readily available cash than any other age group. Even though the actual dollar amount they stockpile is lower, on average, typically because they are early in their careers and making less, this suggests that many younger adults are operating in safety mode and avoiding big spending.

The gap between the “saves” and “save-nots” is growing—and fast.

Half of consumers who saved more than 30% of their income in the last six months say they accelerated their savings rate compared to the prior six months. Only 15% of those saving less than 10% say the same. In contrast, just 13% of the top savers report cutting their savings rate in the last six months, compared to 38% of those saving less than 10% and 45% of those spending more than they bring in.

Non-cash savings fuel retirement and investment accounts, even for paycheck-to-paycheck consumers.

Consumers keep most of their non-liquid savings in retirement or investment (brokerage) accounts. On average, consumers have 46% in 401(k)s and/or individual retirement accounts (IRAs), 26% in separate investment accounts and 13% in certificates of deposit. The rest is mostly in health or education savings accounts.

Notably, even struggling paycheck-to-paycheck consumers have, on average, 46% of their non-liquid savings in retirement accounts—the same percentage as for all consumers—underscoring how 401(k)s and IRAs are the workhorse of retirement savings, regardless of income level.

Gen X keeps 57% of their non-liquid savings in retirement accounts, the most of any generation. Millennials keep only 42% of those savings in retirement vehicles, perhaps a sign of how homebuying and growing a family eat into financial resources that would otherwise go to saving for retirement. Boomers, meanwhile, cluster at both ends of the non-liquid savings spectrum. More than four in 10 (44%) have more than $15,000, and many far more, but more than one-third have nothing.

Cost-of-Living Pressure Impacts All
Rising costs are constraining savings for consumers in all financial situations, even those not living paycheck-to-paycheck.

Persistent inflation continues to take a toll on consumers across the board. Overall, 53% of Americans say that increased costs of living have impeded their ability to save in the last six months. This climbs to 58% for those living paycheck to paycheck but comfortably paying their bills, and to 62% for those struggling to make ends meet. Inflationary pain is real, even among the more financially stable, with 39% of consumers not living paycheck to paycheck citing higher costs as a barrier to saving. Other key obstacles include unexpected expenses, named by 34% of consumers, and debt payments, at 25%.

Rising prices don’t just make it harder for consumers to maintain the same standard of living. The inflation fears that accompany heftier price tags also encourage shoppers to stock up before costs potentially climb even more. Overall, 30% of Americans report spending more than usual in the last six months due to inflation or financial uncertainty, while just 23% saved more.

Consumers who were already stretched thin have been hit particularly hard. For example, 34% of those struggling to pay their bills increased their overall spending in the last six months, twice the rate of those who managed to save more. The pattern is nearly identical among employed individuals who saved less than 10% their income or spent more than they earned.

On the other end of the spectrum, consumers with comfortable financial positions often have the flexibility to save more than usual when faced with difficult conditions. One-quarter of individuals not living paycheck to paycheck increased their savings in the last six months, more than the 21% who spent more. Similarly, 43% of consumers who saved more than 30% of their income ramped up their savings further, slightly more than the share that increased spending, at 39%.

Fragile Cushions
Less than half of consumers feel confident about covering a $2,000 shock, with those living paycheck to paycheck the least confident.

As everyday costs continue to climb, emergency expenses like car repairs or medical bills can quickly top thousands of dollars. Yet just less than half (48%) of Americans feel very or extremely confident they could come up with $2,000 in 30 days. Unsurprisingly, individuals already struggling to pay bills are the least likely, at 15%, to indicate they could do so. Similarly, just 31% of individuals earning below $50,000 express strong confidence about coming up with $2,000 than those earning more.

Even more revealing, many individuals who look financially healthy are still walking a tightrope when it comes to emergency expenses. One in five consumers not living paycheck to paycheck have doubts about securing $2,000 within a month, as do 27% of those annually earning more than $100,000. Even among consumers who feel highly confident about coming up with the money, 23% say they are very or extremely concerned about the impact on their savings.

Wishful Thinking?
Consumers are optimistic about saving more in the next year—regardless of paycheck-to-paycheck status—though reality may not match expectations.

More than half of Americans (52%) believe they will increase their savings in the next year, even though just 24% did so in the past six months. This optimism varies little regardless of paycheck-to-paycheck status or income level. Most notably, 50% of consumers struggling to pay their bills expect to bump up their savings in the next year. That said, 18% of them believe their savings will drop, a far higher rate than indicated by their more comfortable peers.

Age plays a bigger role: Gen Z has the rosiest view, with 72% expecting to boost their savings in the next year. This should not be mistaken for a tide of optimism among consumers in their teens and twenties, though. Instead, it reflects common expectations about higher future earning potential for workers early in their careers. Conversely, just 30% of baby boomers think their savings will grow.

Nearly all paycheck-to-paycheck consumers and even 70% of those not living paycheck to paycheck report at least one major barrier to saving. This points to widespread “New Year’s resolution”–style optimism about boosting savings, rather than a clear path forward. Overall, 35% of Americans cite the increased cost of living as the biggest obstacle to saving, and this ranks as the top issue for those living paycheck to paycheck but comfortably covering expenses (31%) as well as those not living paycheck to paycheck (24%). Individuals struggling to pay their bills most often name insufficient income as the biggest challenge, at 28%.

Crypto in Focus
Men, millennials and higher-income consumers are the likeliest to have crypto in their portfolios.

A smart investment or a risky bet? Cryptocurrency may not yet be a mainstream asset, but 7.9% of consumers have some in their portfolios. On average, crypto owners hold $4,017 in crypto, accounting for 28% of their readily accessible savings. They typically earn higher incomes, with 45% in the more than $100,000 per year bracket compared to just 21% earning less than $50K. At the same time, six in 10 crypto holders live paycheck to paycheck, though most of them can comfortably cover expenses (42%).

Millennials dominate the crypto scene, accounting for 58% of holders, compared to just 18% for Gen Z, 17% for Gen X and 7.7% for baby boomers. Three-quarters of crypto holders are men, while 25% are women.

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Methodology

“Why Paycheck-to-Paycheck Consumers Can’t Weather a $2,000 Shock,” the newest installment of “New Reality Check: The Paycheck-to-Paycheck Report,” a PYMNTS Intelligence exclusive series, is based on a survey of 2,215 U.S. adult consumers conducted from August 5, 2025, to August 19, 2025. The report examines saving and spending behavior among paycheck-to-paycheck consumers. Our sample was balanced to match the U.S. adult population by age, gender, education and income.