By Faith Ashmore, Benzinga
Amid high inflation and rising prices, more and more Americans are living paycheck to paycheck. A study in November 2022 showed that 63% of Americans are living paycheck to paycheck. While expectedly this figure largely includes lower-income households, even higher-income individuals are struggling; 47% of individuals earning more than six figures are living paycheck to paycheck.
Consumer prices are rising, real average hourly earnings are down, and unless employers are giving raises to account for inflation, paychecks aren’t going nearly as far as they used to. To make matters worse, credit card rates are now more than 19% of the average; this means, if people are relying on credit cards to make ends meet, they are accumulating higher debt and being pushed into corners.
Alongside the increased reliance on credit cards, people are struggling to save money. According to a LendingClub survey, of the respondents who said they are financially struggling, 50% said they are unable to save or have no savings at all. 33% of working adults are uncomfortable about their ability to pay for a $400 emergency, while 8% admitted they wouldn’t be able to afford it at all.
While it is undeniable that the economic landscape is rife with challenges, budgeting and financial literacy can help manage anxiety and increase available cash in times of hardship. An Ipsos poll showed that 36% of Americans define themselves as financially illiterate. It is not always that people can’t or don’t want to budget, but rather they don’t have the tools, knowledge, or resources to start.
Why Budgeting Matters And How Current Makes Budgeting Simple
The average monthly expenses for one person are around $3,405, while the average monthly expenses for a family of 4 are around $6,597. The U.S. Bureau of Labor Statistics recently published a study showing the average amount spent in each category. The survey found that people spent the most money on housing, transportation, and food, which comprised 26%, 13%, and 10% of their total take-home pay, respectively.
Another survey by Debt.com showed that the majority of budgeters believed budgeting was instrumental in keeping them out of debt or preventing further debt. In other words, budgeting works. It can be especially helpful to track your spending and see what unnecessary spending you can curb. That’s where budgeting tools are instrumental.
Current is a new type of banking alternative and a lot of the features are ideal for individuals looking for better ways to track and manage their money. In particular, they also offer money-tracking tools to help you spend money smarter and with less anxiety.
The app offers features where you can set monthly spending budgets for various categories (like food, transportation, entertainment, housing, etc.), and then track how you are doing throughout the month. The app will compare monthly trends and display insights to help you stay on goal. You can also set alerts for when you get close to your limit or go over it.
For people who have never budgeted or need a little extra help, this tool could be a helpful way to maintain the practice and get your financials back on track.
Current also offers other features like faster direct deposits and better overdraft protection for people who are struggling financially.1 Through Current, members can get direct deposits up to two days earlier. The mobile banking app also lets you overdraft up to $200, pending approval, with no overdraft fees. There are no minimum balance fees either.2
This article was originally published on Benzinga here.
Current is a leading U.S. financial technology platform serving the needs of Americans who are working to create a better future for themselves. Our mission is to enable members to change their lives by creating better financial outcomes. Leveraging the best technology, we deliver inspirational and motivational products as we all move forward in a world of increasing digitization and complexity.
This post contains sponsored advertising content. This content is for informational purposes only and is not intended to be investing advice.
1 Faster access to funds is based on comparison of traditional banking policies and deposit of paper checks from employers and government agencies versus deposits made electronically. Direct deposit and earlier availability of funds is subject to timing of payer's submission of deposits.
2 Please refer to Overdriveâ¢ Features Terms and Conditions. Out of network cash withdrawal fees, third-party, and adding cash fees may apply.
Current is a financial technology company, not a bank. Banking services provided by Choice Financial Group, Member FDIC. The Current Visa Debit Card is issued by Choice Financial Group pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit cards are accepted.
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