December 6, 2022

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60% of Americans are living paycheck to paycheck as the 2022 holiday approaches

60% of Americans are living paycheck to paycheck as the 2022 holiday approaches

Just as the holiday shopping season enters its peak, families are finding less slack in their budgets than before.

As of October, 60% of Americans were living paycheck to paycheck, according to the latest reports. LendingClub report. A year ago, the number of adults who felt stretched thin was closer to 56%.

“More consumers who have historically managed their budgets comfortably are feeling financial pressures, which will affect their spending behavior as we approach the holiday shopping season,” said Anuj Nayar, LendingClub’s Chief Financial Health Officer.

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Not only are daily expenses going up, but inflation is also causing it Real wages are falling.

Real average hourly earnings fell 3% from a year earlier, according to the latest reading from the US Bureau of Labor Statistics.

A separate report from Payroll Finance found that two-thirds of working adults said they are worse off financially than it was a year ago.

previously, Credit card balances are on the riseup 15% in the most recent quarter, the biggest annual jump in more than 20 years.

People are trying to economize and make the most of what they have.

Cecilia Seiden

TransUnion Vice President of Retail Business

Nearly half of shoppers said they would Buy less things due to price hikes, and more than a third said they would rely on coupons or other money-saving strategies, according to a separate survey by retail.

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More consumers are also planning to financing their purchases This year with credit cards and buy now pay later loans.

And 25% of shoppers said they would choose cheaper versions or more practical gifts, like gas cards, according to another holiday survey by TransUnion.

“People are trying to economize and make the most of what they have,” he said. Cecilia Seiden, TransUnion Vice President of Retail.

Holiday debt ‘easy to get into, hard to get out of’

Shoppers at the King of Prussia Mall in King of Prussia, Pennsylvania, on Saturday, December 4, 2021.

Hannah Pierre | bloomberg | Getty Images

Holidays can come in high cost If it means tackling extra credit card debt just like The Federal Reserve raises interest rates to slow inflationAccording to Ted Rossman, Senior Industry Analyst at

“It’s easy to get into credit card debt and hard to get out of,” he said. “High inflation and high interest rates make liberalization more difficult.”

Credit card rates now up to 19%, on average – its highest ever – These rates will continue to rise since the Central Bank indicated More increases to come Even inflation shows clear signs of abating.

“This increases the likelihood that credit card companies will increase their interest rates, and it makes the money you owe more expensive over time,” added Natalia Brown, chief client operations officer at National Debt Relief.

She said rising inflation and interest rates mean consumers need to be especially careful.

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