A heartbreaking survey came out in August 2017 that showed that out of the 6,000 people surveyed, 78% of American workers are living paycheck to paycheck. In this post, I’d like to go through the highlights of the study and comment on them.
78 percent of U.S. workers live paycheck to paycheck to make ends meet
There could be a variety of reasons for this, but the most common reason is that people are not managing their money well. Chances are that if someone is living paycheck to paycheck it is because they are spending too much money. I’ll expound on this later in this article.
Nearly 1 in 10 workers making $100,000+ live paycheck to paycheck
Okay, this is bad, but it could be worse. It seems that at least people who are making good money are not so careless with it that they are out of money by the end of the month. However, if you are making $100,000 or more, you have NO EXCUSE if you are living paycheck to paycheck. If I made $100,000 per year, I don’t know that I’d be able to spend all of it. Chances are, half of it would be invested. Obviously, if someone is making $100,000 a year and he is still living paycheck to paycheck, money is being wasted. If you are living paycheck to paycheck with that kind of salary, you are out of FREAKING control!
More than 1 in 4 workers do not set aside any savings each month
This is not good. If you do not set aside money every month, what will you do if you have an emergency? I suspect that those who don’t put aside savings every month rely on their credit cards when an emergency strikes. This is not smart for several reasons: First, if you have another emergency the next month, you are going to have to not only make monthly payments on the first emergency, but also on the second emergency. This can easily snowball to the point to where you are either strained financially or you are not able to make the monthly payment. Second, you have to pay interest on your debt. Would you invest in something that you knew was going to lose 15% of its value a year? If not, why the heck would you consider using a credit card? Third, when you are tied up in credit card payments, your cash flow cannot go to things that help you build wealth or give to others.
Nearly 3 in 4 workers say they are in debt today – more than half think they will always be
This is the saddest of all. Those who think they always will be in debt have lost hope. Proverbs 22:7 reads, “The rich rules over the poor, and the borrower is the slave of the lender.” Those who have lost hope are basically rolling over and accepting that they are going to be slaves for the rest of their lives.
The other portion of this highlight goes back to the first highlight. 3 out of 4 Americans are in debt. This means that 3 out of 4 Americans are managing their money poorly. A lot of times, the cause of living paycheck to paycheck is debt, in particular, credit card debt. The cause of consumer debt is bad money management.
House debt is acceptable due to the size of the investment and the value of the asset–just make sure your house payment is for a 15 year mortgage and that the mortgage and home owner insurance payment doesn’t exceed more than 25% of your monthly income. If it does, your house is too expensive for you and you either need to sell it or increase your income so you can pay it off. Refinancing for a lower interest rate is also an option, but it doesn’t ultimately fix the problem at hand.
More than half of minimum wage workers say they have to work more than one job to make ends meet
If you are in a job where you can’t advance and you aren’t making enough money, you need to find a way out. Minimum wage is not supposed to be enough to support a household. Those types of jobs are more or less for people who are just entering the work force. If you can’t find a new job that pays better than you are qualified for, that means you need to learn some skills that could help you land a job or start a business. I have told many people who aren’t happy with the jobs they qualify for to learn a skill and start a business on the side and transition to full time for your business when you can support your family. If none of the jobs available to you are acceptable, the obvious solution is to create your own.
This survey is very disheartening. Can you imagine how many of those who live paycheck to paycheck are putting Christmas presents on their credit cards? Perhaps some children are not even getting Christmas presents this year. While possessions are not everything, it can be hard on children when they see that their friends got presents and they didn’t.
Don’t let yourself get into this situation. If you are in any of these situations, get educated about finance and turn your life around. You can learn from this site, but I have other resources that I recommend, my favorite is Dave Ramsey. Listening to Dave Ramsey about finances is like getting a good dose of reality. His method for financial security has worked for many Americans, and it is the method that I recommend. He gets people who show up to his radio studio and they do “debt free screams,” on every single one of his episodes (and he does episodes for his radio show five times a week). You can also listen to his show on YouTube. I have also written a book that gives Biblical advice on how to build and protect your wealth.
If you don’t make a change, you are always going to be in your situation. If you are not happy with your situation, the only way out is going to be making changes. Are you going to roll over and just suffer for the rest of your life or are you going to stand up and say, “I’m sick and tired of living like this! I will NOT live like this anymore!” You have to get so mad at your situation and you allowing it to go on that it’s ridiculous. People are going to think you are crazy, but chances are, those who think you are crazy are in a similar situation to yours. If you are struggling financially, for the sake of you and your family, please do something to get out of your situation. You can do better!