In recent years, the number of families living paycheck to paycheck has risen sharply. For many Americans, this is the new economic reality. More and more families are falling into financial hardship, as the cost of living continues to increase. This can have serious consequences for those who are unable to make ends meet.
The Economic Reality for Many Americans
The economic reality for many Americans is that they are living paycheck to paycheck. According to a recent LendingClub survey, nearly 63% of Americans are reportedly living paycheck to paycheck. This is up from 54% just last year.
This economic reality is especially true for those who are working in low-wage jobs. According to a report from OxFam, nearly one-third of workers (52 million) in the United States earn less than $15 an hour. This means that they have to work multiple jobs just to make ends meet. And even then, they are often one unexpected expense away from being in financial trouble.
Why More and More Families are Falling into Financial Hardship
There are several factors contributing to the growing trend of families living paycheck to paycheck. For one, the cost of living is increasing while wages remain relatively stagnant. This means that families have to stretch their budgets further and sacrifice other expenses for them to make ends meet. Many people are now working multiple jobs or longer hours just to keep up with their bills. This leaves less time for families to spend together and can lead to additional financial strains. Last, unexpected costs such as medical bills or car repairs can quickly throw a family into debt and cause them to struggle to make ends meet.
The Consequences of Living Paycheck to Paycheck
One of the biggest consequences of living paycheck to paycheck is that it can put you in a never-ending cycle of debt. If you’re constantly struggling to make ends meet, it’s easy to fall behind on your bills. This can lead to late fees, higher interest rates, and even legal troubles. You can also become dependent on credit cards and payday loans to help you make it through a tough month, but they can also create a vicious cycle of debt that’s difficult to break free from.
All of this can ruin your credit score, making it difficult to get approved for loans or credit cards in the future.
Living paycheck to paycheck can also take a toll on your mental health. Worrying about money can cause a great deal of stress, which can lead to anxiety and depression. It can also make it difficult to focus on anything else in your life. If you’re always worried about money, you may not enjoy your hobbies or spend time with your family and friends.
Ease the Financial Burden of Living Paycheck to Paycheck
If you’re struggling to make ends meet, there are some steps you can take to ease the financial strain. Cutting expenses, increasing your income, and creating a budget are all good places to start. You may also want to consider talking to a financial advisor or credit counselor who can help you create a plan to get out of debt and improve your financial situation.
Filing for bankruptcy can provide much-needed relief if you’re struggling to keep up with your debts. When you file, an automatic stay goes into effect that prevents creditors from collection activities, including wage garnishment, foreclosure, and repossession. This can give you a chance to catch up on your payments or work out a repayment plan with the bankruptcy court. it is important to seek the advice of a qualified bankruptcy attorney to ensure that it is the right choice for you.
Brock & Stout’s bankruptcy attorneys have over 27 years of experience helping clients who live paycheck to paycheck get a fresh start. Contact us for a free evaluation of your financial situation to see if we can help you get on a better financial track.