WISCONSIN (CoinChapter.com) — Sixty-three percent of United States citizens live paycheck to paycheck heading into the busy holiday shopping season – quite a sobering thought.
The Federal Reserve’s recent economic report may have taken the bitter edge off growing inflation, but 7.7% is still a hot number affecting Americans and those who live on extremely tight budgets. Of course, most people want to participate in the annual “holiday cheer,” but with over half of the country strapped for money, the high costs of virtually everything adds some strain.
Working to balance firm family budgets when household earnings are down 3% from last year is an additional challenge.
Credit Card Use is Flying High
What do people do when the paycheck doesn’t match up with holiday spending desires? They use credit cards.
According to LendingTree, current credit card balances in the US total $925 billion – a 15% increase YoY. The massive multi-billion dollar number is almost double the amount from 20 years ago.
There are better ways to go than just adding on credit card debt; the best and hardest choice is to cut back. An interesting poll of 1,000 people by St. Louis real estate company, Clever Real Estate, found that nearly 1 in 10 Americans plan to skip holiday shopping altogether. In addition, 1 in 3 plan to spend less, with 57% saying the reason is inflation.
Credit cards are easy to use and hard to pay off. Card companies are raising interest rates in response to Central Bank increases. Credit card interest rates are averaging 19.23%. The Federal Reserve will continue to raise rates until inflation drops.
Average Hourly Earnings are Falling
Average hourly earnings have fallen three quarters in a row. When looking at a one-year graph, one may wince a bit. A year ago this same quarter, average earnings were 2.5% higher than today.
What is disconcerting is that one would think all of these numbers are related to lower-income people. But, among high-income earners with six-figure incomes, 49% live paycheck to paycheck – an 11% increase from last year.
There is no question that inflation has wreaked havoc on the budgets of households across America. But unfortunately, some problems are simply due to a consumer society that seemingly knows no spending limits.
