The U.S. has come a long way since the Great Recession. The economy has picked up; the housing market is vibrant, while the unemployment rate dipped to its lowest level in more than 15 years. However, a huge percentage of Americans still live paycheck to paycheck.
In a survey conducted by Career Builder, about 80% of its participants said that they struggle to make ends meet every month. That could mean over 90 million of full-time employees. To make things worse, this trend is present across salary ranges. Even those who earn the most may have this problem.
Understanding the cause of the problem and knowing how others cope with credit unions such as palmettocitizens.org can be ideal ways to understand the problem better.
This financial problem has several possible causes. The first one is the stagnation of wages. Since the 1970s, workers’ income grew less than 0.5% annually. Overall, average salaries went up only 10% from 1973 to 2017. The Hamilton Project enumerated the reasons for the persistent decline. These include a lower share of income, wage inequality, and slow growth of union membership.
While we see such increase in income, why are there still who can hardly pay their bills? The answer may be because Americans are living beyond their means. In fact, consumer spending grew about 3% annually even if the after-tax income growth is only 1%. Credit card debt also ballooned to an average of $6,373.
Americans, regardless of gender and status, can tackle this “adulting” problem by reducing or eliminating their present debt. Your savings is useless when the interest offsets the earnings of your account. Look for a solution that works with your current lifestyle and budget. Credit unions, for instance, can help by offering loans that have favorable payment options than regular banks.
Living from paycheck to paycheck is never ideal, and this problem needs a solution right away. It all starts from you. Go ahead and find the best possible solution.