A new report from consumer financial services company Bankrate found 34% of U.S. workers say they’re living paycheck to paycheck on their current salary. Bankrate analyst Sarah Foster said the study focused on workers because they’re the group most impacted by the inflated cost of living.
“They’re unable to afford unexpected expenses and save for the future because it is so tough to afford the present, ” she explains.
Though the study started this year, Foster believes people have less spending money now than in the past. Workers in the southern United States were most likely to report living paycheck to paycheck, which Foster says isn’t surprising.
“Workers in the South are those who are making kind of the lowest income in the nation,” she says. “And we’re also seeing that inflation peaked at higher rates in the South as well than it did in any other region.”
Foster says the only sure way to avoid living paycheck to paycheck is to be rich. Short of that, she advises practicing healthy spending, budgeting and financial habits, such as living within your means and taking notice if your paycheck doesn’t cover all of your expenses.
“I think that’s a really good indication that it’s time to just sit down with your budget,” she says. “Know the money that is coming in [and] the money that is going out. I really like to separate expenses by discretionary and then essentials.”
