Many cash-strapped Americans feel sting as the cost of living spikes
Benjamin Gibson is a San Antonio pharmacist who makes over $100,000 per year. He also owns his home.
Gibson is 40 and still struggles to pay for basic needs, such as groceries or gas.
His words were, “When your normal spending habits are to spend just a couple dollars on vegetables and fruits, and now you’re paying much more,” he explained. I went to Dollar Store for asparagus.
Gibson said that he has $5,000 in emergency funds and no plan for a 401(k), so he weighs all purchases, dinners out or oil changes.
He stated, “I cringe whenever it is time to pay with credit card.”
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Experian reported that approximately 71% Americans felt their wages are not up to inflation.
En outre, 29% said They expect to barely make ends meet in this month, and they predict that they’ll spend more than they budget for the next few months.
“People are struggling to figure out how to meet those challenges,” said Rod Griffin, a senior director at Experian. It is a major concern.
Roughly 62% of the U.S. population is living paycheck to paycheck, a separate survey by LendingClub found.
Even wealthier Americans are having a harder time getting by. According to LendingClub polls of 3250 adults, half of those who earn more than $100,000 say they don’t have enough money at the end the month.
Simon Blanchard is an associate professor at Georgetown University’s McDonough School of Business. “This requires them to deplete both their savings and safety net, and that could cause other problems,” he said.
He stated, “They become financially insecure.”
Hot job marketLow unemploymentA historically high level of savingsThis gave Americans an extra boost as they look forward to 2022 and made them willing to pay more for goods or services.
While wages have increased, inflation has not. the fastest annual pace in about four decades.
According to Bureau of Labor Statistics data, real earnings increased 5.6% compared with a year earlier. However, the average hourly wage saw a seasonal adjusted 0.8% decrease last month.
Blanchard explained that the assumption is that income increases with rising costs of goods, but this is often false.
It is a common assumption that income will increase as goods cost more. This is often not true.
Associate professor in Georgetown University’s McDonough school of Business
Taylor Byers is a 29-year-old director at Boca Communications. She was promoted and received a raise in her salary, but she says she’s still struggling to make ends met.
Byers, who lives with her fiancé in Orange County, California, and works remotely, said all her income goes toward expenses.
She stated that she is unable to save and said she would be putting money aside for the wedding.
“A huge chunk of my paycheck goes to rent — probably 40%. My car payment, my credit card bills, and gas are all due. Netflix prices are higher; every bill seems to have gone up,” she stated.
“How are you going to keep up?”
Taylor Byers with her fiancé.
Source: Taylor Byers
Rob Burnette is a Troy-based financial advisor who also serves as CEO at Outlook Financial Center. He advises his clients to begin with a monthly financial plan that lays out their income and expenses. Next, he recommends that clients identify areas where they aren’t spending enough.
He suggested, “Completely eliminate them until you are able to afford them again.” You may find that you no longer miss these areas once they are gone.
Additionally, it is important to move in order to reduce high interest rates credit card debtYou can switch to a zero interest balance transfer credit card, or you can consolidate your expensive debts into lower interest rates. home equity loan or personal loan. “Don’t purchase items with credit if you cannot for pay them in cash,” he cautioned.
Also, ditch the “keeping up with the Joneses” mentality, Burnette said, even if that means selling an expensive carOr downsizing to a smaller home.
When you are on the right track to making these changes you may be able start allocating a portion of your monthly earnings to savings.