2 in 3 Americans Now Live Paycheck to Paycheck. Are You One of Them?

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  • Millions of Americans live paycheck to paycheck.
  • This means they have no money left over by the time payday rolls around.
  • You're vulnerable to going into debt when living paycheck to paycheck, so it's a good idea to break that cycle. 

There are some big downsides to living paycheck to paycheck, but there are also options to change that state. 

Living paycheck to paycheck typically means you spend all of your money and are waiting with an empty bank account by the time your next payday comes. It's a precarious position to be in because any unexpected expense could force you to reach for the credit cards to cover it -- or worse, to take out a payday loan. 

Unfortunately, millions of Americans are currently living paycheck to paycheck. And if you are one of them, it may be time to look into making some changes so you aren't vulnerable to falling into debt due to an unexpected bump in the road. 

The number of Americans living paycheck to paycheck is shocking

According to Graham Stephan, a real estate investor and YouTube personality, a huge number of people have no savings to fall back on and empty their bank accounts by payday. Stephan commented on Twitter that "58% of Americans are living paycheck to paycheck after inflation spike -- including 30% of those earning $250,000 or more."  

Stephan's assertion came from a LendingClub report, in June of 2022. The troubling information came to light during a time when inflation has reached a 40-year high, largely driven by increases in the cost of necessities such as gas and groceries. 

As prices have gone up, people have naturally struggled to adjust their budgets accordingly -- especially as wage growth isn't keeping pace with inflation. With higher costs and not enough money to cover them, it's not a surprise that more Americans are left waiting for their next check to come because they've already spent all they have.

Here's how to stop living paycheck to paycheck 

While living paycheck to paycheck may be common, that doesn't mean it is a situation you want to find yourself in.  

It can be really tricky not to spend every dollar when the Consumer Price Index shows goods and services cost a whopping 9.1% more in June of 2022 than they did a year ago. But, there are some things you can do in order to try to break the paycheck-to-paycheck cycle and build some savings so you have a financial cushion. 

Some of your options include:

  • Increasing your income: This can be the best approach, since it is so difficult to cut your budget enough to make up for the rising prices. There are many businesses hiring full-time or part-time, including for remote jobs. Consider looking for a new higher paying position in this tight labor market, or taking on a side gig. 
  • Substitute low-cost items for high-cost ones: With groceries costing so much more, for example, you may want to think about having more plant-based meals and skipping the higher-priced meat aisle. 
  • Look into carpooling: If you can cut fuel costs, this can make a big difference in how much you are spending since rising gas prices is one of the leading drivers of inflation. 
  • Track spending: Consider keeping careful tabs on where your money is going for around 30 days. This can give you insight into what budget cuts, if any, you can make. 

By trying out these tips, hopefully you can become one of the minority of Americans who isn't waiting for your next payday to make ends meet.

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