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How Living Paycheck To Paycheck Is Affecting Your Future

A whopping 64% of Americans live paycheck to paycheck. Compared to 2021, last year an additional 9.3 million people felt they were stretched thin financially.

Living paycheck to paycheck doesn’t just affect your day-to-day spending; it can also set you up for a complicated, stressful, and even dangerous future. If you’re struggling with making ends meet, here are four situations you may run into.

Situations You May Find Yourself In When Living Paycheck To Paycheck

1. You Cannot Keep Up With Inflation

You may have been living paycheck to paycheck without many issues. Sure, there is not much left over for spending, but at least the bills are covered, right?

Unfortunately, this isn’t the case. The average inflation rate in the U.S. is 3.8% per year, which means most household items – including bills – will likely increase at least 3.8%, if not more, annually.

While an ideal job will provide annual pay raises to match the pace of inflation, many lower-end positions rarely offer raises at all. This means that if you’re making the same at your job as you were last year, you’re really making less because all of your daily expenses have increased since you began working there.

person living paycheck to paycheck holding empty wallet

2. No Discretionary Money For Important Milestones

Almost every family will go through certain milestones that require a little extra cash. Things like weddings, big birthdays or anniversaries, going to college, getting a driver’s license, and other life events that often come with a price tag.

Apart from the grand milestones, you’ll also need extra cash for standard changes throughout your family’s life. Kids need money for school supplies, sports, and things like prom. Parents need money to pay taxes, plan birthday parties, and keep their homes in working order.

3. No Savings For Retirement Or Your Children

Roughly 42% of Americans don’t feel prepared for retirement. This means they’ll rely solely on family, benefits, or their Social Security checks to get by – the latter of which is rarely enough to cover expenses.

If you have or plan to have children, living paycheck to paycheck spreads your finances even thinner. To put it in perspective, the USDA estimates that raising a child in the U.S. costs upwards of $15,000 per year as of 2022.

To add to this, living paycheck to paycheck means you won’t have a nest egg put away for yourself, much less for your kids in the future.

4. Unable To Face Financial Emergencies

One of the biggest problems with living paycheck to paycheck is that you aren’t building up an emergency fund. This rainy-day fund should be your saving grace when you face urgent bills for doctor’s visits, home or car repairs, housing costs, emergency travel, or even funeral arrangements. Without one, you’ll likely face panic, stress, and an uncertain future should an emergency come your way.

How To Stop Living Paycheck To Paycheck

It’s no surprise that living paycheck to paycheck could have dire consequences – especially if you’re responsible for dependents. To break the cycle, you’ll need to take these concrete steps:

  1. Cut expenses: In almost every situation, there is a way to save money or cut expenses, especially regarding food, bills, or entertainment.
  2. Increase your pay: Increasing your pay by taking on extra shifts, a second job, or building up your resume to find a higher-paying job is also vital.
  3. Start a savings fund: Immediately open a separate, non-accessible savings account where you can start your emergency fund. Set up automatic deposits in the amount of cash you’re now able to have left over each month.
  4. Keep up with financial literacy: Once you have some savings under your belt, read up on different financial and investment topics to stay in control of your finances and your future!

Facing An Emergency With No Savings

What happens if you need to face an emergency with no savings while living paycheck to paycheck? In cases like these, you may be pressed for options especially if you don’t have the time or credit needed for a traditional loan. Carolina Payday Loans, Inc. and a payday loan are here to help.

person grabbing payday loan cash

Getting Cash Today

A paycheck loan is a short-term solution for financial difficulties. You could get up to $500 as soon as today if you have your I.D., a checking account, and are employed.

To see if you qualify, simply complete the general online form located on the Carolina Payday Loans, Inc. homepage and expect a call from one of our loan representatives. During that call, we’ll walk you through the process, arrange a time to meet at one of our locations, and help you complete the loan request locally.

If approved, you could receive payday loan cash that same day or the next work day.

It’s Time To Break The Cycle And Fix Your Finances

It’s time to stop living paycheck to paycheck and look out for your future. If you want fewer sleepless nights and more financial security, you’ll need to cut expenses and find a way to increase your income. While it may be tough at first, it will be well worth it in the long run.

In the meantime, Carolina Payday Loans, Inc. is here for those who could use a payday loan to cover this month’s expenses. Contact us on our homepage today and start fixing your finances, one step at a time.

Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.

Emma Frost

Emma Frost is a lifestyle and finance blogger with a talent for communication and a passion for financial literacy. She uses her writing talents to explore topics that help her readers gain financial stability and growth.