Living Paycheck to Paycheck: Take a Look at the Reality for 3 in 4 Americans

people surrounding red grocery cart

Few have money in savings. Fewer could cover an emergency expense

If you’re struggling making ends meet, the important thing to remember is you’re not alone.

Eighty percent of Americans have something they don’t want: Debt. Despite what you might see in your community, on social media, or elsewhere, fewer have their lives financially put together than you might think.

America’s consumer debt continues to skyrocket. Credit card debt? Big. Student loan debt? Bigger. Debt is normal, and it represents the financial state of most American families. 

Don’t believe us? Here’s what we know.

Money in the bank is slim, and it disappears quickly 

Three in four working Americans live paycheck-to-paycheck. With the COVID-19 pandemic throwing the economy in flux, that number is expected to have risen.

If you think that number only represents marginalized and underemployed lower class employment, think again. One in 10 earning $100,000 or more are also living paycheck-to-paycheck.

Living paycheck-to-paycheck means closely monitoring bills and expenses, with little room for error. An interruption, like a missed paycheck, could spell disaster — especially if there is little or no savings to fall back on. 

Nearly seven in 10 Americans have less than $1,000 in savings — and 45% have $0 in savings. Like Humpty Dumpty, many nest eggs cracked in the COVID-19 pandemic.

Savings are important, we can all agree. Yet few set aside money for savings each month.

The result is four in every 10 Americans say they would struggle to cover a $400 emergency expense. Households wouldn’t be able to cover an unexpected trip to the hospital or a needed car repair, should they have to. Thirty-three percent of Americans say they or a family member put off medical treatment because of the cost.

Millions experience financial strain in today’s wage landscape. Financial setbacks — big or small — can occur frequently, and strain anyone in an instant. In some cases, a financial setback isn’t necessary to ignite financial stress. On monthly expenses, most people only need $250 to make ends meet.

Household debt is as common as brushing your teeth

While debt is uncomfortable, debt is also normal.

Most Americans have an average of $29,800 in personal debt, not counting their mortgage. These debts were often compounded by credit card late fees and bank overdraft charges.

Accelerated by rising interest rates, these debts stack up. Americans spend over a third of their monthly income paying off debt.

Let’s say it again: Debt is normal. It’s important to understand that while others may look like they are financially well off, they are more likely struggling with debt and one emergency away from a financial disaster.

Remember, 80% of Americans are struggling with debt. Think about that for a second. More of your neighbors have debt than have a pet. Striking, isn’t it? 

Almost half of Americans (45%) say they experience monthly anxiety from their debt situation, and one in five say debt makes them feel physically ill at least once a month.

Where does this debt come from? Mortgages? Sure. Car loans? You bet. Student loans? Absolutely. Credit cards? You best believe it.

On credit cards specifically, the average balance is now $6,849 and costs an average of $1,162 in annual interest. Bank fees, other times, are a culprit, too. America’s big banks charged $11.68 billion in overdraft fees last year.

Your neighbors have debt

If you have debt, you’re not one of the few. You’re one of the many.

Your neighbors have debt. Your friends have debt.

Whether through a series of small, unexpected expenses that snowball, or an absence of time to build savings, debt can add up fast. If you’re one of the millions of Americans who carry debt, you’re not alone.

Debt is isolating. Feel uncomfortable talking about finances? That’s normal. But bearing the burden and understanding how common debt is can help us feel togetherness.

There shouldn’t be shame in being honest about money and finances. Embarrassed about financial difficulties? Don’t be. Others in your community are going through the same battles.

If you have debt, you have not failed at money. Debt, for the majority of us, is part of life — and something we will get through together.

Everyday people have debt.

Everyday people have financial struggle.

Everyday people borrow from Net Pay Advance to cover their expenses before their next paycheck comes.

Net Pay Advance is a licensed loan provider, locally owned and operated in Wichita, Kansas. Our No. 1 priority is helping you, the customer, by providing access to the cash you need and helping support financial independence goals with valuable, informational, and entertaining content. Stay up-to-date on our posts by following the Net Pay Advance Facebook, Instagram, and Twitter pages. Our organization is committed to transparency; learn more about our authors and editorial policy. The information provided within this blog is for educational purposes only and should not be construed as financial or legal advice. Please contact us if you have any questions.

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