Living paycheck-to-paycheck? It may be time to do this

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Inflation is so high, even six-figure earners are living paycheck to paycheck.

 

Pollsters from fintech companies PYMENTS and LendingClub partnered to quiz Americans on how they feel about their financial situations. More than 4 in 10 earning more than $100,000 annually say they live paycheck to paycheck.

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The Paycheck to Paycheck Report was a national survey of more than 3,000 Americans. Back in February, inflation reached a 40- year high, resulting in 3 out of 5 respondents saying it’s “increasingly difficult to make ends meet.”

 

“Every day we see Americans relying on credit cards as a crutch,” says Anuj Nayar, LendingClub’s financial health officer, “which is a horrible way to borrow money if you don’t intend to pay off the entire balance at the end of every month.”

 

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The writing’s on the wall: it’s time to cut back

Just two weeks ago, Debt.com reported Americans are spending 15 percent more than they were before the pandemic. That data was pulled from a national poll of 1,000 Americans by TD Ameritrade.

 

Most of the overspending was contributed to psychological factors more than a necessity: dining out, entertainment, fast food, and coffee. All of the pent-up demand because so many have been cooped up due to the global health crisis.

 

The amount those survey respondents earn each year is unclear. What is clear: Inflation has risen to the highest it’s been since 1981.

 

“It’s time for consumers in all income brackets and geographies to review their financial situations and look for better ways to manage their cash flow,” Nayar says. “Take a long, hard look at ways to trim down unnecessary expenses.”

 

Find out: The War in Ukraine Will Change How Americans View Money

When you can’t control costs – take control of your spending

The more Americans spend, the higher costs of living will go up. When there is a short supply, the more consumers contribute to the demand – the higher prices will increase.

 

Back in February, Debt.com reported the headline “Americans Are More Scared of Inflation Than COVID.” Online insurance marketplace Policygenius polled more than 1,000 Americans on how they felt about their finances. Just under 3 in 5 said they felt anxious – twice as many who said the same about another coronavirus variant.

 

“While we only have so much control over outside sources of anxiety there are things we can do to ease our financial stressors,” Policygenius CEO Jennifer Fitzgerald says, “like making a budget, building an emergency fund, and securing insurance to provide peace of mind for you and your family.”

 

Howard Dvorkin, CPA and chairman of Debt.com, agrees and feels her advice can help combat rising prices.

 

“One big cause [of inflation] is consumer spending – what you and I buy,” Dvorkin said. “We put the strain on the supply chain. We drive prices up when we drive our cars more than we did during the pandemic.”

 

Find out: 5 Ways to Fight Back Against Inflation

 

As far back as August 2021, Dvorkin publicly went against the popular opinion that inflation would slow down and advised Americans on how to spend more wisely. Here’s a brief guide to “keep inflation from deflating your monthly budget.”

 

Inflationary periods have come and gone in the past. You may not be able to completely stop the bleeding. But making a plan can help triage the wound until this storm passes.

 

This article originally appeared on Debt.com and was syndicated by MediaFeed.org.

More from MediaFeed

Here’s how a lot of Americans plan to pay for retirement

 

More than two thirds of employees in the United States expected their main source of retirement income to come from retirement plans, such as 401(k), 403(b) or individual retirement accounts (IRAs), as of the end of 2020. A large share (also around two thirds) expected their main source of income to come from social security. Meanwhile, 37 percent of respondents expected to finance themselves in retirement age by continuing to work.

 

Here are the most commons ways Americans plan on paying for retirement, according to a survey conducted by the Transamerica Center for Retirement Studies in 2020 (the most recent data available).

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2. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.

 

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Share of respondents:  71%

 

 

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Share of respondents: 66%

 

 

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Share of respondents: 48%

 

 

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Share of respondents: 37%

 

 

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Share of respondents: 26%

 

 

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Share of respondents: 18%

 

 

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Share of respondents: 14%

 

 

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Share of respondents: 2%

 

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Statista used data from the Transamerica Center for Retirement Studies conducted by Harris Poll from November 17 to December 29, 2020. Surveys were conducted online, and results are from 3,109 adult Americans working full-time or part-time in a for-profit company employing one or more employees. The question was phrased by the source as follows: “Which of the following do you expect to be sources of income to cover your living expenses after you retire? Select all.” Multiple answers were possible. You can find more information here.

 

This article originally appeared on Statista.com and was syndicated by MediaFeed.org.

 

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Featured Image Credit: AndreyPopov/istockphoto.

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