According to a recent report from LendingClub, 63% of Americans were living paycheck to paycheck as of November 2022 — up from 60% in October. Of those pulling in more than six figures a year, 47% reported living paycheck to paycheck, up from October’s 43%.
So how can Americans who are just scraping by paycheck to paycheck cope? They can start by taking control of their finances through the following steps:
1. Itemize Assets and Debts
People living paycheck to paycheck should make a list of all of their assets and debts. This is so they can get a picture of exactly what they have and what they owe.
2. Redo Budget
If a budget was made before these times of heavy inflation, it may need to be looked at again and revamped. Consider areas that can be trimmed down, such as subscriptions to services that are not essential. Be honest about wants versus needs.
3. Get Back on Track With Saving
According to New York Life’s Wealth Watch survey published in August, 36% of people said they had withdrawn an average of $617 from their savings during the first six months of 2022 in order to keep up with rising costs. It’s critical to get back on track with saving.
4. Don’t Let It Get to Your Head
Money has long been a top stressor for Americans, and inflation is only making the matter worse. In the APA’s “Stress in America: 2022” survey, 87% of respondents said that the rise in prices due to inflation is a significant source of stress. It’s critical that financial stress, which can affect one’s health both physically and mentally, doesn’t get out of hand.
Being proactive can help, as can enlisting outside help. If struggling, consider meeting with a financial advisor or even a financial therapist.
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