Americans are dipping into emergency funds just to survive.
A new survey from LendingTree found that the share of workers who say they are living paycheck-to-paycheck each month has grown significantly among middle- to high-income earners — 63 percent and 49 percent, respectively, which is up from 57 percent and 38 percent, respectively, just one year ago. Overall, 65 percent of working Americans say they have been living paycheck-to-paycheck this year.
Millions of Americans are having to navigate rising inflation costs, spending more on essential goods and services like groceries and rent. Many have had to dip into their savings for emergencies more frequently. What’s alarming is that, according to the Federal Reserve, only 68 percent of those surveyed said they had at least $400 in emergency cash.
Many financial experts are worried that families are depleting their cash reserves now, which would set them up for failure in the near future. Analysts predict a recession will hit the U.S. economy some time next year.
“We are seeing incomes boosted by rising wages and low risk of default for key financial debts such as their mortgage, car loan, etc.,” Rodriguez said. “If a recession does occur next year, there will likely be some job losses with some families falling even further behind.”
