Why do most people in the U.S. live paycheck to paycheck?

On Behalf of | Apr 7, 2024 | Bankruptcy

Does it seem like life has gotten incredibly expensive these days? Are you struggling to balance your income and bills? You’re far from alone.

According to the latest data, roughly 59% of consumers in the United States are living paycheck to paycheck – including 42% of those making more than $100,000 annually. Although the economy continues to grow and more people than ever have side gigs, the vast majority of people are barely scraping by each month. What’s going on?

Inflation has eaten into any gains

People were picking up side gigs as independent contractors, artisans or resellers to make extra cash. Today, they’re doing it just to make ends meet. It’s no secret that wages haven’t exactly kept up with inflation. That affects everything from how much you pay at the pump to the cost of groceries, as well as every other necessity.

Housing prices have skyrocketed

If you’re a renter, you’ve probably already felt the pinch of rising housing costs. Landlords haven’t been shy about raising rents on their tenants. Homeowners, too, are feeling pinched by the cost of necessary repairs to their homes, since climate change and storms have caused construction prices to soar.

Industry changes are affecting jobs

A lot of households have gone through significant economic upsets due to changes in one or more wage earner’s employment. The technology industry, for example, has undergone some major shifts in employment, so many people are struggling to regain solid financial ground after a period of turmoil caused by layoffs, reduced hours or terminations. 

Even if you have a good income, it’s possible to end up in a financial hole through no real fault of your own. If you’re struggling with overwhelming debt, exploring your bankruptcy options may provide you with a clear path out of the debt trap.