People should not be living paycheck to paycheck
Many Americans are finding it harder to sustain a living. Living paycheck to paycheck is common nowadays but that should not be the case.
With inflation rising, more than two-thirds of Americans are living paycheck to paycheck. More should be done to prevent this.
This is concerning for many people, especially college students who are trying to enter a competitive market.
The average pay in Houston for someone with a bachelor’s degree is $53,977 a year which boils down to $1,038 a week. This might seem like a lot for some but with the average cost of rent being $1,302 a month, the picture begins to change.
Rent is only one type of expense Americans have to deal with. Groceries, utilities, car payments, medical bills and surprise expenses begin to pile up. When people want to spurge on entertainment or take-out, many people find that they can’t afford it.
When Americans can no longer afford their living expenses, they turn to credit. The lower monthly payments are tempting but the long-term consequences will soon catch up.
The average credit score for Americans who live by each paycheck is 664. For people who do not, their average is 90 points higher.
Many people do not know the risks of revolving debt, the balance you carry from a previous revolving credit account.
People that are living by each paycheck, are probably not paying their balance in full. They might also be using the entirety of their credit limit. These factors contribute to a low credit score which is something Americans do not know.
In fact, four out of ten Americans do not know how their credit is calculated.
This leaves people at risk of accumulating debt that they will no longer be able to pay back.
With the rise of inflation being at its highest since the 1980s, more Americans might turn to credit as their paychecks are no longer enough to cover their living expenses.
One solution to this problem could be increasing the minimum wage to $15, a solution President Joe Biden has already introduced to federal workers.
The current minimum wage is not sufficient to support Americans. If the minimum wage followed the trend of increasing prices, Americans would be earning over $22 an hour.
However, that is not the case in today’s economy with a minimum wage of $7.25.
With that in mind, people should not be living paycheck to paycheck.
America should increase the minimum wage so people can afford their basic necessities. Americans should have enough money to lead fulfilling lives, not lives filled with anxiety.
Cindy Rivas Alfaro is a journalism freshman who can be reached at [email protected]