If you’re reading this right now, chances are you’re living paycheck to paycheck and possibly one check away from being homeless. Ready for this? You’re not alone.
Sixty percent of US adults, including more than 4 in 10 high-income consumers, live paycheck to paycheck, according to LendingClub Corporation.
That’s not all. LendingClub’s report showed that 69% of Americans in urban areas are living paycheck to paycheck – 14 percentage points higher than suburban consumers.
Only 48% of US adults say they have enough savings to cover at least three months’ worth of expenses.
According to a report from the brokerage firm, Charles Schwab, 59% of Americans say they are just one paycheck away from homelessness.
Individuals who live paycheck to paycheck need their next paycheck to cover their monthly financial expenses, without it, they would fall into financial ruin.
I encourage everyone to read that report because it has some excellent insights.
According to the Bureau of Labor Stats, the average worker takes home $3,308 per month after taxes and benefits.
On social media, particularly on TikTok, it’s not uncommon to hear everyday people venting about the high cost of living due to inflation. They especially point to the cost to buy groceries and pay for housing.
The average American renter is paying more than 30% of their income on housing, according to The Hill, which noted that wages “have failed to keep up with rent hikes and affordable units.”
While economic experts say inflation is cooling, it is still eating away at the average person’s paycheck.
These sobering insights should sound a serious warning to the average consumer. While some heed the warning, others bury their heads in the sand like the proverbial ostrich.
Poor people aren’t the only ones living paycheck to paycheck
According to numerous financial surveys and reports, poor people aren’t the only ones living paycheck to paycheck. There are many high-income earners included in the numbers, too. That’s typically individuals who earn more than $100,000 a year.
In August, actor and singer, Billy Porter admitted that he was forced to sell his home after he lost jobs due to the writer’s strike in Hollywood. In a business where image is everything, many people were surprised to hear Porter admit he was struggling financially.
“Until you make ‘f*** you money,’ which I haven’t made yet, it is still check to check. I have to sell my house,” he said.
American Idol winner, Fantasia Barrino, in a radio interview, admitted that many of her peers in Hollywood were struggling financially but putting on a brave face before the cameras.
Living beyond your means
There are individuals who truly cannot afford their lifestyle because they don’t make enough money to cover their expenses. Many are still recovering from the financial ruin brought about by the Covid-19 pandemic.
As a result, they work more than 50 hour workweeks, work two and three jobs at a time and cut back spending to the bare minimum just to survive.
But, there are also people who simply are poor money managers and are content to keep up with the Joneses.
According to that same report by Charles Schwab, 44% of Americans usually carry a credit card balance or struggle to keep up with bills/payments; only 38% have built up an emergency fund and Americans spend an average of $483 on non-essential spending every month.
The report noted that Gen-Z and Millennials are most likely to spend on experiences because of something they saw on social media.
Those same groups area also most likely to spend more than they can afford to do stuff with friends.
Social media also has the most negative influence on money management.
I want to hear from you down below. Let me know if you are one of the people living paycheck to paycheck. If so, what are you doing to either cut back on spending or earn more money.
Feel free to also watch my YouTube video down below. Subscribe today!
XOXO,
This Bahamian Gyal
