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Here’s How Many US Workers Live Paycheck to Paycheck

Topics: Data & Research
live paycheck to paycheck

If you’re checking your bank account balance to see if the last paycheck is stretching until the next one, you’re like more of your fellow Americans than you might realize.

A recent report from CareerBuilder showed that 78 percent of full-time workers said they live paycheck to paycheck, up from 75 percent last year. And even some of those making over six figures said they struggle to make ends meet.

Household income has grown over the past decade, but it has failed to keep up with the increased cost-of-living over the same period.

Housing Costs on the Rise

And one of the biggest costs is housing, whether you’re paying rent or a mortgage. The trend of steadily increasing home values in the past decade impacts more than just those people trying to scrape together a down payment and monthly mortgage payment. Home values, which are higher than they were during the height of housing bubble, have risen sharply because there are more buyers than there are homes for sale. As a result, rents have risen because there are more renters who can’t buy a home and are competing for rental properties.

According to the Bureau of Labor Statistics in May, average hourly earnings have increased 2.5 percent over the past 12 months. But home values are increasing at more than double the pace of average hourly earnings.

Still, we are consumer society, and there could be many mindless ways you’re blowing through your paycheck.

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Is the Gig Economy to Blame?

But some argue that the major culprit of this paycheck-to-paycheck cycle is the burgeoning freelance economy. According to a recent survey by the Center for Financial Services Innovation, 48 percent of Americans have expenses that equal or exceed their income, and among that group, nearly 40 percent have income that fluctuates from month to month.

The fluctuating income can be the result of a shift in the workforce — full-time job arrangements are giving way to people having several contract jobs, freelance assignments or consulting projects. This so-called “gig economy” is on the upswing, according to MBO Partners. The business services firm reported that the number of people who work independently hit a record this year of 41 million, up nearly 3 percent from last year.

Stop the Cycle

Whatever the reason, living paycheck to paycheck can be stressful. Forbes recently talked to financial advisors for nine tips to stop living paycheck to paycheck, including tracking your spending and making automatic savings deposits from your paycheck.

You also can check how your pay stacks up to others in your field. Take PayScale’s free salary survey. You may find its time to update your resume to search for a better-paying job, or you might decide to ask for a raise. In either case, brush up on your salary negotiating skills with PayScale’s Salary Negotiation Guide.

Tell Us What You Think

Are you feeling the pinch more these days, living paycheck to paycheck more than in the past? We want to hear about your experience. Share your thoughts in the comments, or join the conversation on Twitter.

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