It’s a familiar story for many Americans: the juggling act of trying to make ends meet in a world where expenses seem to be constantly on the rise. A recent study by Assurance IQ revealed that a whopping 66% of U.S. adults had to make sacrifices to cover their monthly bills in the past year. The research, based on a survey of 5,000 individuals, highlighted the various tactics people employed to navigate financial challenges.
One of the most common strategies Americans turned to when faced with a shortfall in funds was reaching for their credit cards or resorting to borrowing money. This reliance on credit to cover basic expenses has become increasingly prevalent, especially as inflation rates have soared, putting a strain on household budgets. In fact, credit card debt has ballooned to a staggering $1.13 trillion as of December, underscoring the financial pressures many are grappling with.
Not surprisingly, the burden of financial strain falls disproportionately on lower-income households. The study found that those earning less than $75,000 a year were more likely to resort to borrowing money to meet their expenses, with 47% admitting to doing so in the past year. For many, the choice to borrow or rely on credit cards is not a luxury but a necessity to bridge the gap between income and expenses.
The repercussions of this financial tightrope walk are far-reaching, with many Americans forced to make difficult trade-offs to keep their heads above water. From skipping meals to selling possessions, overdrawing bank accounts to negotiating payment terms, individuals are grappling with tough decisions just to stay afloat. The notion of having to choose between putting food on the table and paying the bills underscores the stark reality faced by many households.
As Assurance IQ CEO Allison Arzeno aptly put it, the struggle to cover both everyday expenses and unexpected emergencies is a harsh reality for countless low- and middle-income families. The findings of the study serve as a stark reminder of the financial fragility faced by many Americans, highlighting the urgent need for solutions that address the root causes of economic instability. In a landscape where financial resilience is a luxury rather than a given, the call for greater support for struggling households rings louder than ever.
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