Many of us dream of making a six-figure salary. Crossing the $100,000 mark in earnings is often viewed as a sign of financial success.
Yet 42% of those who earn more than $100,000 live paycheck to paycheck, according to a recent survey of more than 3,000 consumers by PYMNTS and LendingClub.
Overall, 61% of workers from all income levels were living paycheck to paycheck in December 2021, a jump of 7% since last May. As might be expected, the less income you earn, the more likely you are to be one pay period from financial disaster.
The breakdown of those living paycheck to paycheck, according to the survey, is as follows:
- Incomes of more than $100,000: 42%
- Incomes of $50,000 to $100,000: 66%
- Incomes of less than $50,000: 77%
Although the lion’s share of today’s workers live paycheck to paycheck, they do not share the same experience. PYMNTS and LendingClub found that those who fall into the paycheck-to-paycheck status can be divided into two categories: Those who can pay their bills easily (39%) and those who cannot (22%).
The study authors say that although the U.S. economy has recovered from its pandemic lows, the percentage of people living paycheck to paycheck is creeping back toward the high of 65% recorded in December 2020.
In particular, the numbers of those living paycheck to paycheck rose sharply in the last two months of 2021. According to PYMNTS and LendingClub:
“While the United States economy seems to have stabilized, those living paycheck to paycheck still find themselves in precarious financial situations. Inflation, which rose 7% in December 2021 from one year earlier, is making it increasingly difficult for many to make ends meet.”
How to escape the paycheck-to-paycheck trap
Living one paycheck away from disaster is no fun. The best way to escape this trap is to educate yourself about your financial options and then make a plan to build up your savings.
A great place to start the process is by enrolling in the Money Talks News course Money Made Simple. This 14-week course offers lessons about an array of money basics, including:
- Real estate
- Estate planning
Money Talks News founder Stacy Johnson teaches the course. After finishing these lessons, you will be ready to manage money more efficiently while spending less time getting the results you want.
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