Nearly half of Americans earning more than $100K now report living paycheck to paycheck — here's why your savings are more important now than ever

Moneywise
Nearly half of Americans earning more than $100K now report living paycheck to paycheck — here's why your savings are more important now than ever
Nearly half of Americans earning more than $100K now report living paycheck to paycheck — here's why your savings are more important now than ever

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Americans are still grappling with high inflation and even the wealthy are teetering on the edge.

About six in 10 Americans were living paycheck to paycheck as of June, according to a report produced by commerce data platform PYMNTS and personal loans website LendingClub — 45% of those with six-figure incomes are feeling the financial pressure, too.

There are financial consequences up ahead for the millions of Americans who barely have enough cash to meet their basic expenses.

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As Americans struggle to keep up with the ballooning costs of consumer goods, many are turning to credit cards to fill the gap. Credit card balances climbed by $50 billion in the fourth quarter of 2023, according to the Federal Reserve Bank of New York.

Many consumers are barely making ends meet — let alone have room at the end of the month to fill up their savings accounts.

Despite inflation and economic uncertainty, it’s clear that now is the time when Americans must get a hold of their finances. Here are some simple ways you can do just that.

Make budget cuts by finding better insurance rates

Of the people who live paycheck to paycheck, 21% of respondents in the PYMNTS study noted that they struggled to pay their monthly bills. Searching for better insurance rates is one way to reduce the strain on your budget.

It’s not uncommon for people to take what they’re given when it comes to insurance rates, but with the increase in the cost of living, it’s important to really evaluate your spending.

SmartFinancial is a platform where you can compare the best insurance rates in your area for your home *

All you need to do is answer some quick questions about yourself and they’ll instantly sort through over 200 insurers to find you the best deals available and any discounts.

When it comes to your car insurance, you can save up to $820 a year by shopping for better rates with BestMoney.com*

When you sign up for BestMoney, they’ll ask you some quick questions that help determine your insurance. Things like your age, your home state, the type of vehicle you drive and your driving record.

Based on your answers, they’ll sort through leading insurance companies in your area, ensuring you find the lowest rate possible.*

Your budget is tight enough already, don’t let overpriced insurance limit your ability to put cash away for savings.

Read more: Generating 'passive income' through real estate is the biggest myth in investing — but here's 1 surefire way to do it with as little as $10

Tackle your credit card debt

Making sure you’re on top of your credit card payments can be stressful, especially since many Americans are relying heavily on their credit cards due to their paycheck to paycheck lifestyle.

The PYMNTS study indicates that the average credit card balance of consumers living with children under 18 is $7,200. Paying off debt is an important long-term financial goal, but it’s a daunting task given current financial circumstances.

Credit cards have variable rates and interest compounds – which means you may be paying interest on your interest. If you’re only making the minimum payment, your balance will likely grow over time and you’ll make no progress towards paying down the balance.

Personal loans, on the other hand, offer low, fixed rates with fixed terms, so you’ll know the exact date your debt will be paid off. By consolidating your debt with a personal loan from Credible,* you can pay off your debt faster and more efficiently.

Credible is an online tool that will present you with multiple loan options to consolidate your credit card debt. They’ll ask you a few questions about your finances and search their network of lenders to find you the lowest rates with the best terms.*

Credible’s lending partners offer loans as small as $600 and as large as $200,000, so there’s something for everyone regardless of where they stand with their debt repayment. Plus, it’s free. There’s no obligation to see what you qualify for, and it only takes 2 minutes to get started.

Turn spare change into savings

In the April 2023 New York Life Wealth Watch survey, 73% of parents report "having trouble" keeping up with their expenses. One of the top financial difficulties, cited by 28% of respondents, was saving enough money.

While inflation may leave you with less money for saving, it’s still important to prioritize it, even if in small amounts.

With Acorns * — a saving and investing platform — you can turn spare change into savings. The chances of a few dollars getting lost amidst paying your expenses each month is likely, but Acorns makes it so that every coin you have counts.

All you have to do is link your bank account and spend as you normally would and Acorns will round up your everyday purchases to the nearest dollar and put that spare change into a smart investment portfolio that suits your financial goals.

Signing up for Acorns takes less than five minutes, and you can start saving for just $3 a month. In times like these, not a single cent should go to waste.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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