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

More Americans report living paycheck to paycheck

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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 in November, according to a report produced by commerce data platform PYMNTS and personal loans website LendingClub — 47% 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.

For a majority of employed workers, the median decline in real wages when factoring in inflation is over 8.5% — the biggest pay cut in 25 years, said the researchers. If you’re one of them, this means your purchasing power is being severely eroded.

Not only that, but 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 $45 billion in the second 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

More than half of respondents in the PYMNTS study noted increases in their monthly bills, and many said that it was impacting their ability to save for short-term goals.

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 both your home* and car.*

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.

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

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 24% of those living paycheck to paycheck cite that paying off debt is their most important long-term financial goal. But, it’s a daunting task given current financial circumstances.

Luckily with Tally* — a free credit management app — this task becomes a lot simpler.

Start by linking your credit cards to your Tally account when you sign up and they will provide you with a personalized payoff strategy and a custom line of credit at a low APR.

From that point, they’ll track your billing schedules, due dates and minimum payments for you. All you have to do is pay Tally once a month and they’ll take it from there.

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.

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