Are you feeling the gnawing pain of financial anxiety? You’re not alone. A majority of Americans (59 percent) report that they live paycheck to paycheck.
Stressing about finances can go far beyond the wallet. Itcan seep into every aspect of your life and manifest itself as generalizedanxiety, guilt, panic attacks, or trouble sleeping at night. It can also wreakhavoc on your marriage or partnership.
But there are steps you can take to ease the anxiety and getmoving in the right direction. Relax, and read on.
Take a long, hardlook at your budget
Your first step should be to examine your budget and make some immediate changes in your spending habits. Track your daily spending carefully and see where you can make some cuts.
This may mean making coffee at home instead of buying it at a coffee shop, changing your cable subscription, or spending less on travel for a few months until you get back into the black.
Make a concrete plan to pay off your debts and stick to it.This will give you breathing room and a clear way forward.
Don’t beat yourselfup
Financial stress can make us feel like we’ve failed ourselves or our families in some major way, but it’s not helpful or necessary to think this way.
Remind yourself of the positive ways you’re managing yourmoney, even if you’ve fallen behind on paying the bills. Maybe you’re puttingmoney into a retirement account or chipping away at a student loan. Make a listof the positives so you can keep your chin up as you work toward financialstability.
Don’t compare yourself to others, especially online. Social media allows people to project a false sense of wealth — don’t fall for it, and don’t let it get you down. Stay focused on your goals.
Talk to someone
Perhaps a long, serious talk with your spouse or partnerwill give you clarity and help ease your money stress. You want to make sureyou’re on the same page as your spouse/partner when it comes to budgeting.
If this conversation is difficult or not fruitful, maybe you need to talk to a professional—a financial advisor or therapist who specializes in financial anxiety. Get the emotional support you need to stay on top of your game mentally so you can enact your financial plans with confidence.
There is absolutely no shame in asking for professional help to deal with financial stress, and the cost of a financial advisor is worth budgeting for — it will pay itself back quickly in money and emotional well-being.
Start an emergencyfund
Life happens. Unexpected expenses will come up that can ramp up your stress levels.
To give yourself a safety net and peace of mind, it’s a great idea to save for emergencies. Start with as little as $25 a month, or more if you can afford it. A solid emergency fund might be $500 to $1,000—enough to help cover a car repair, appliance fix or a medical emergency.
Once you hit $1,000,keep saving. The more you have, the easier it will be to tackle biggeremergencies.
The bottom line
Take these steps to get yourself out of financial stress andback on track—one day and one dollar at a time.
FAQs
Living paycheck to paycheck by income
According to a recent PYMNTS report, as of November 2022, 76 percent of U.S. adults who make less than $50,000 are living paycheck to paycheck, compared to 65.9 percent of those making $50,000 to $100,000 and 47.1 percent making more than $100,000.
What to do if you're struggling financially? ›
Facing financial hardship
- Food assistance. ...
- Unemployment benefits. ...
- Welfare benefits or Temporary Assistance for Needy Families (TANF) ...
- Emergency housing assistance. ...
- Rental assistance. ...
- Help with utility bills. ...
- Government home repair assistance programs.
Instead seek solace in the things you can control, like building your emergency fund so you're prepared for surprise expenses. You might also feel better if you write a list of the things you can control around your money and create a plan to act on those items — even in the smallest of ways.
How to manage money when living paycheck to paycheck? ›
With the right strategies, you can successfully save more money even when you leave from one paycheck to the next.
- Know Your Expenses. The first step to saving money is understanding your expenses. ...
- Build a Budget. ...
- Look for Ways to Increase Your Income. ...
- Automate Your Savings. ...
- Cut Back on Non-Essential Expenses.
Based on that figure, an annual income of $500,000 or more would make you rich. The Economic Policy Institute uses a different baseline to determine who constitutes the top 1% and the top 5%. For 2021, you're in the top 1% if you earn $819,324 or more each year. The top 5% of income earners make $335,891 per year.
What paycheck is considered rich? ›
In 2017, a salary of about $378,000 would land you in the 5% club. By 2022, the salary it takes to stay at that level is more than $544,000.
What percent of Americans are struggling financially? ›
More than half of Americans (58%) report being able to live within their means and not worry about making ends meet, while fewer than half (40%) feel they are in good or great financial shape, and one in four (23%) say they are in poor shape.
How to stop stressing about money? ›
How to stress less about money: 9 stress-relieving tips to ease money worries
- Identify your stressors. Begin by pinpointing exactly what causes you stress about money. ...
- Get organized. ...
- Create a financial plan. ...
- Be flexible. ...
- Use stress-reducing tools. ...
- Avoid comparing yourself to others. ...
- Seek support. ...
- Celebrate small wins.
People living paycheck to paycheck are sometimes referred to as the working poor. Living paycheck to paycheck can occur at all different income levels. The working poor are often low-wage earners with limited skills but can include those with advanced degrees and skills.
What is the average number of people living paycheck to paycheck? ›
A 2023 survey conducted by Payroll.org highlighted that 78% of Americans live paycheck to paycheck, a 6% increase from the previous year. In other words, more than three-quarters of Americans struggle to save or invest after paying for their monthly expenses.
More Americans may be struggling to make ends meet. A majority, 65%, say they live paycheck to paycheck, according to CNBC and SurveyMonkey's recent Your Money International Financial Security Survey, which polled 498 U.S. adults.
How rare is a 100k salary? ›
According to the U.S. Census, only 15.3% of American households make more than $100,000 annually. A $100,000 salary can yield a monthly income of $8,333.33, a biweekly paycheck of $3,846.15, a weekly income of $1,923.08, and a daily income of $384.62 based on 260 working days per year.
How common is a 100k salary? ›
Earnings Breakdown
Household Income: Roughly one-third of households in the U.S. have an annual income exceeding $100,000. Individual Income: The number of individuals hitting the $100k mark is lower, with about 18% of Americans achieving this figure.
Is living paycheck to paycheck common even among those making more than $100000? ›
About 78% of Americans earning less than $50,000 a year report they live paycheck to paycheck, according to the survey. Yet 51% of Americans who make more than $100,000 a year say they still run out of money.
How common is a 100000 salary? ›
According to our extensive research: 18% of individual Americans make over $100k per year. 34.4% of US households make over $100k per year. 37% of White Households make over $100k, compared to only 22% of Black households.
