69% of Americans in Cities Live Paycheck to Paycheck — How to Save More When Cost of Living is High
Written by
Sean Fisher, AI Editor
Edited by
Sean Fisher
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The struggle to make ends meet is more prominent than ever among Americans living in urban areas, with a shocking 69% of urban dwellers living paycheck to paycheck, according to a new report from LendingClub Corporation.
This statistic highlights the financial hardship faced by city residents, particularly when dealing with inflation and increasing living costs. It also emphasizes the need for effective strategies to stretch income and increase savings, despite high living expenses.
The study, part of the “New Reality Check: The Paycheck-to-Paycheck” research series, surveyed over 3,600 U.S. consumers in various living environments across the nation to examine the financial stressors pushing them into this precarious cycle.
Notably, this lifestyle isn’t exclusive to those earning less; high-income consumers, those earning over $100,000 annually, also face the struggle, with the percentage of these individuals living paycheck to paycheck climbing seven points to 49% from the previous year.
For individuals in urban environments, the rising cost of living exacerbates the situation. Inflationary pressures and high living costs in cities have made the financial burden more pronounced. These factors have made it imperative for urbanites to find ways to make their income go further and potentially break the paycheck-to-paycheck cycle.
One of the ways to achieve financial freedom in such an environment is through effective budgeting. Creating a budget that tracks income and expenses provides a clear picture of where money is spent and can highlight potential areas for savings. Furthermore, it’s essential to identify needs versus wants to limit unnecessary spending.
Another important step is to pay down debt, especially high-interest debt. Urban residents were found to be more likely to have credit product payments, with some using installment payments as a way to manage credit card debt.
However, the high interest associated with such debt can keep individuals in the paycheck-to-paycheck loop. It may be worth exploring options such as debt consolidation or refinancing to lower the cost of debt.
Establishing an emergency fund can also provide a financial cushion that can be used in times of need instead of resorting to credit. While it may seem challenging to save money while living paycheck to paycheck, even small contributions can build up over time.
Lastly, residents might also consider taking advantage of city-specific resources. Various cities offer different types of financial aid programs, discount programs, and free events that can help reduce expenses. Taking the time to research and utilize these resources can go a long way in easing the financial strain.
It’s important to remember that living paycheck to paycheck is a widespread issue, affecting people across various income levels and geographical locations. But with careful planning and disciplined money management, it’s possible to navigate the high cost of city living and move towards a more secure financial future.
Editor's note: This article was produced via automated technology and then fine-tuned and verified for accuracy by a member of GOBankingRates' editorial team.
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