Fewer workers are living paycheck-to-paycheck
Americans appear to be improving their financial standing by employing more money management techniques and being more selective about the costly services they purchase. The collapse of the economy and the recession that followed forced many households to re-evaluate their spending, and the results of a new study show that Americans’ new frugality may be paying off.
According to a recent CareerBuilder survey, the percentage of workers who are living paycheck-to-paycheck has fallen to a pre-recession low, dropping to 40 percent from the 2008 high of 46 percent. Additional results show that 37 percent of workers say they are sometimes reliant on their next payday to make ends meet, while 23 percent say they never live paycheck-to-paycheck. Further, 20 percent of workers said they are unable to meet their obligations at least once per year.
The study also broke the results down by demographic, revealing that those making six figures or more were more confident in their finances in 2012. However, 12 percent of those earning $100,000 or more still said they always or usually live paycheck-to-paycheck.
“Making ends meet remains a challenge for millions of households, but the situation has improved for workers who’ve grown more confident with their job security or who have taken steps to pay down debt and save more,” said Rosemary Haefner, vice president of human resources at CareerBuilder.
“Seventy-two percent of workers report they are more fiscally responsible since the end of the recession, and as the labor market continues to improve, we expect more workers will again be able to spend in ways that will drive the economy forward.”
There are several strategies Americans can use to put more money away and avoid being forced to rely on each pay period to cover their living costs. While it may seem difficult initially, creating a budget that allows them to eliminate unnecessary costs can be an effective way to squeeze more out of their income for savings.
For example, canceling cable and switching to a more affordable cellphone plan can save up to $100 each month. Clipping coupons for groceries and household products, eating out less often and negotiating credit card rates with lenders can also put more money in consumers’ wallets.
Lastly, those who frequently fall short each month or simply want to bolster their savings accounts should consider consulting a credit counselor about their particular financial situation.