A new poll shows that inflation doesn’t discriminate between classes. Now, more Americans are depending on debt to pull through.
Ever since inflation became a thing, Americans up and down the salary ladder have been dining out less and comparison-shopping more. But what about the middle class, which represents most of the country?
Record-high inflation has been the top concern this year with rising costs totally surpassing wage growth. Middle-class workers are trying their best to adjust by cutting down as much as possible.
But even though Americans are cutting down on extra spending, they still can’t afford the basics. Not only are families avoiding new tech upgrades (69 percent) and major purchases (38 percent), News Primerica also found they’re cutting back on food (49 percent).
“Middle-income families are taking a hard look at their finances right now. Rising costs continue to eat into their bottom line,” said Glenn J. Williams, CEO of Primerica.
The United Way ALICE Project found that 4 in 10 households don’t make enough to afford housing, food, child care, health care, transportation, and a cell phone.
“Despite seemingly positive economic signs, the ALICE data shows that financial hardship is still a pervasive problem,” said Stephanie Hoopes, the project’s director.
It’s a problem that even extends to households above the poverty line, but according to the ALICE Project, they still make “less than what it takes to survive in the modern economy.”
The majority of all full-time jobs in the U.S. pay less than $40,000 a year. Experts say that in 2021, Americans would have to make about $100,000 a year, to comfortably cover average expenses.
“It is morally unacceptable and economically unsustainable for our country to have so many hardworking families living paycheck to paycheck,” said the president of the project, John Franklin.
Debt for dinner
The majority are cutting back on restaurants and takeout, but that just isn’t enough. Half of U.S. adults are cutting down on groceries as they try to budget for everything else.
Over just the past seven months, Americans are becoming increasingly worried about their ability to pay for food. Many are relying on debt to make up the difference.
Credit card utilization has hit a record rate of 29 percent. In 2021, the average was about 22 percent.
Financial troubles are hitting some families extra hard. Single parents take on about $6,000 in debt every year to pay for basic expenses.
Find out: What is Inflation Amputation?
Adding to the load…
Food isn’t the only thing families are struggling to cover. Housing costs, like everything else, have been on a steep incline. And it doesn’t seem to be slowing down.
The National Association of Realtors (NAR) found that 80 percent of U.S. housing markets have seen a double-digit increase in cost. Nationally, prices are increasing at about 14 percent every year.
Mortgages are about $600 more expensive than they were just a year ago.
“Home prices have increased at a pace that far exceeds wage gains, especially for low and middle-income workers,” said Lawrence Yun, the NAR’s chief economist.
Still, debt can do more harm than good – especially with today’s inflation and interest rates.
There are so many different ways to take a hard look at spending and come up with an effective budget. A financial professional is always the best option. There are also free resources and apps that can track your spending and help you come up with a realistic budget.
But if you’ve been managing your expenses by building up debt, that may not be enough.
Debt.com can help find the best solution to your specific situation.
Find out: Cheaper Cities Hit Hardest by Inflation
Now matter what kind of debt you have, Debt.com can help you solve it.
Published by Debt.com, LLC