Although officials in the Biden administration claim that the economy is improving, more Americans are struggling to live paycheck-to-paycheck. Food security is on the rise and an increasing number of people are adding more indebtedness into their lives. Furthermore, recent news reveals that nearly half of workers earning at least $100,000 annually are struggling. Here are ten reasons why Americans continue to struggle to get ahead.
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Long Period of Sustained Inflation
While inflation has begun to tame itself somewhat, many things haven’t subsided in cost enough. For example, the Bureau of Labor Statistics (BLS) reports grocery prices are up a mere 2.4 percent over the past 12 months.
Although good, it fails to account for the dramatic increase we experienced for several years.
Wages Haven’t Budged Much
Rising wages are essential for people to keep up with inflationary pricing. Unfortunately, wages just finally started increasing faster than inflation, according to CNBC.
The same report also indicates that it will take at least until 2024 for recovery to take place.
Rent Prices Are Too High
It’s advisable to spend no more than 30 percent of your income on rent. Many Americans are doubling that number.
The median monthly rent is slightly over $2,000 monthly, according to Redfin. That accounts for just over 60 percent of the median net pay.
Interest Rates Make Monthly Payments Worse
Interest rates have risen dramatically over the past several years. While meant to help stabilize inflation, it also hurts our pocketbooks.
Anyone looking to take out a mortgage, an auto loan, or people with credit card debt are all feeling this. For example, the rise in rates for mortgages can easily add several hundred dollars to a monthly payment. Worse yet, buying a home hasn’t been this unaffordable since 1984.
Food Prices Haven’t Receded
The slowing down of food costs was already mentioned. Despite the slowing, prices are still fairly higher than they were several years ago.
Anyone who does grocery shopping is facing this predicament every time they go to the store.
Car Prices Continue to Stay High
Car pricing spiked in the early days of the pandemic. This was due to various factors, including supply chain issues.
Pricing still hasn’t receded enough yet. The average new car costs a whopping $48,000, according to Kelley Blue Book. Used cars aren’t faring much better, with pricing coming in slightly over $28,000
Child Care Costs Continue to Spike
Do you have a young child who needs childcare? CBS reports the average family is paying over $700 monthly for this need. This is up over 30 percent in the last four years.
According to CNBC, many families are spending 20 percent, if not more, of their income on child care.
Consumer Debt is Continuing to Increase
When people struggle with their finances, they often turn to high-interest credit cards. That continues to be the case.
Americans paid over $130 billion in interest and fees in 2022, according to the Consumer Financial Protection Bureau (CFPB). That’s the most the agency has ever recorded.
More People Are Working Second Jobs
Having a side gig is a fantastic way to earn extra cash to achieve a goal. Unfortunately, an increasing number of Americans have second jobs. In fact, USA Today reported that five percent of the workforce had multiple jobs as of November 2023.
This works out to nearly five million workers, which USA Today reports was the highest number since January 2020. People are taking on second jobs to deal with inflation and help them make ends meet. This can often add unnecessary stress, cause health issues, and more.
Gas Prices Are Still Too High
We all feel pain at the pump. AAA reported that the average price of gas fell below what it was a year prior in December 2022. It was the first time that happened in nearly two years.
While fuel prices are following their typical receding cost during fall and winter months, it continues to be problematic for many working families.
35 Proven Ways to Save Money Every Month
Many people believe it’s impossible to save money. Or, they think saving $20 or $50 a month won’t amount to much. Both are incorrect. There are many simple money-saving tips that can add up to big savings. You just have to start one, then another, to increase your savings.
Ways to Save Money Every Month
101 Ways to Make Money on the Side
There are countless side hustle ideas you can pursue. Not everyone will be a good fit for you. Here’s an exhaustive list of options to make extra money on the side.
Ways to Make Money on the Side
I Need Money Now!
Are you in a cash rut and need money quickly? Don’t take out a loan. Here are 19 ways you can get cash today to make ends meet.
7 Steps to Break the Paycheck-to-Paycheck Cycle
Making ends meet is hard on a limited income. However, it is possible to break the cycle and find financial stability. You just need to know where to start.
How to Stop Living Paycheck to Paycheck
Signs You’re Financially Stable
Financial stability is the foundation to achieving financial freedom. Learn how financially stable you are and where you can improve.
33 Signs You’re Financially Stable
I’m John Schmoll, a former stockbroker, MBA-grad, published finance writer, and founder of Frugal Rules.
As a veteran of the financial services industry, I’ve worked as a mutual fund administrator, banker, and stockbroker and was Series 7 and 63-licensed, but I left all that behind in 2012 to help people learn how to manage their money.
My goal is to help you gain the knowledge you need to become financially independent with personally-tested financial tools and money-saving solutions.
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