A recently conducted survey found that nearly 7 in 10 American adults are living paycheck to paycheck; 63% don’t see themselves reaching a level of financial security necessary to have the lifestyle they want.
Surprisingly, this number slightly decreased since 2019, when Forbes reported that 78% of workers lived paycheck to paycheck.
The survey, conducted by OnePoll on behalf of AmeriLife, found that Americans generally lack holistic financial education. When seeking financial guidance, American adults sought out resources that don’t tend to be particularly accurate. 45% of Americans turn to social media for financial advice, 44% solicit it from family members, and 42% rely on online news sources.
Americans are also very divided on whether or not they should be keeping money in a dedicated savings account. According to the survey, 79% of Americans making more than $150,000 annually think that having a savings account is “very” important; only 54% of Americans making between $60,000 and $89,999 agree.
76% of Millennials surveyed reported that “keeping up with healthcare-related bills” prevented them from staying on top of other necessary expenses. 57% of millennials reported that medical expenses resulted in sacrificing a down payment for a home, and 56% said these expenses resulted in missing a mortgage payment.
In order to achieve financial comfort, the people surveyed said they would need to be free of credit card debt (57%), have homeownership (53%), have residual/ancillary income (52%), and be able to retire (51%).
Whereas a lack of financial education and resources may be partially to blame for the poor saving habits of Americans, it cannot be overstated how drastically the financial climate has changed since the COVID-19 pandemic began.
The government’s response to COVID-19 put immense stress on the American economy. Just under half of low-income adults lost their jobs as a result of the economy shutting down. The past few years gave rise to the largest wealth transfer in American history, with an upwards transfer of $50 trillion to the wealthiest Americans. And, with inflation reaching a 40-year high, the earnings and savings of the American people lose value with each passing day.
Even when Americans move out of places with high costs of living, they will still get walloped by high rates of inflation. Some of the most popular destinations for relocation had higher than average rates of inflation.
With the spending power of American wages in a seemingly perpetual free fall, one can hardly blame the public for not knowing how to get the most out of their money.