Despite Inflation 'Cooling,' 62% Of Households Still Living Paycheck To Paycheck: The Squeeze Continues

Written By BlabberBuzz | Wednesday, 20 December 2023 10:15 AM
2
Views 1.5K
Despite Inflation 'Cooling,' 62% Of Households Still Living Paycheck To Paycheck: The Squeeze Continues

Despite the Federal Reserve's recent announcement that inflation has "eased over the past year," American households continue to grapple with financial strain.

A LendingClub report reveals that 62% of adults are living paycheck to paycheck, a figure that remains unchanged from the previous year.

The holiday season, traditionally a period of increased spending, is expected to exacerbate this issue. The National Retail Federation predicts that holiday expenditure from November 1 to December 31 will rise by 3% to 4% compared to last year, reaching a record-breaking total of between $957.3 billion and $966.6 billion.

Simultaneously, credit card debt in the United States has surpassed $1 trillion. A TD Bank survey found that a staggering 96% of shoppers anticipate overspending during the festive season. Furthermore, an Ally Bank report indicates that half of consumers plan to accrue additional debt to cover holiday expenses, with only 23% having a strategy to settle it within one to two months.

 WATCH: BRITAIN'S HEAVIEST MAN HAS PASSED AWAY AT 33bell_image

Sarah Foster, a Bankrate analyst, emphasized the importance of budgeting in the current economic climate. "Not only is sticking to a budget harder today," she said, "but it's all the more imperative, too." Foster pointed out that credit card financing rates have remained at record highs since last fall, making the cost of carrying a balance potentially steep.

 PASTOR DODGES BULLET MID-SERMON AFTER MAN "SEES SPIRITS" AND OPENS FIREbell_image

Alia Dudum, LendingClub's money expert, expressed concern over the reliance on credit cards, despite their utility in managing cash flows. "Credit cards keep many in debt," Dudum stated, adding that cardholders who maintain a balance are more likely to experience financial distress.

 WATCH: AT WHAT POINT WE WILL TAKE THEM SERIOUSLY?bell_image

Financial stress is a widespread issue, with 74% of Americans expressing anxiety over their finances, according to a CNBC Your Money Financial Confidence Survey conducted in August. Factors such as inflation, rising interest rates, and insufficient savings have contributed to these sentiments.

The survey also found that the percentage of Americans living paycheck to paycheck has increased from 58% in March to 61%.

X