Online Lender Claims Half of Americans Living Paycheck-to-Paycheck
A recent survey administered by NetCredit.com has found that 48 percent of American workers report to living paycheck to paycheck. An additional 44 percent said they were only able to stay up to date on bills and other household payments in order to avoid excessive debt or bankruptcy. Broken down by select demographics, 62 percent of survey participants in their 30s were concerned about living paycheck-to-paycheck compared to 54 percent for general workers under the age of 60, 57 percent for respondents with children, 64 percent with at least five household members, and 53 percent of respondents located in the South.
“Living paycheck to paycheck puts many Americans dangerously close to their own personal fiscal cliff should they be hit with an emergency expense,” says Stephanie Klein, head of consumer lending at NetCredit. “An unexpected medical bill, car repair or higher-than-usual utility bill can easily push them beyond their ability to pay bills on time.”
About one-quarter of respondents reported being most concerned with staying current with bills, 6 percent were primarily focused on home payments, and 14 percent were mainly worried about the threat of obtaining excessive debt or going bankrupt. The following resources were listed as those most likely to be used in the case of a financial emergency: general savings (61 percent), credit cards (23 percent), borrowing from friends or family (16 percent), drawing from a rainy day fund (15 percent), selling items (7 percent), bank loans (5 percent), cash advances (4 percent), and installment loans (2 percent).
“But there might not be enough cash there to handle the crisis,” says Klein, referring to a recent FDIC finding that nearly half of Americans cannot access $2,000 in 30 days in case of an emergency.