(The Center Square) – More than half of all US consumers lived paycheck to paycheck last month, according to a new LendingClub Report released on Monday.
The LendingClub, a peer-to-peer lending company, reports that 58% of US consumers were living paycheck to paycheck last month, an increase of 4% from last year.
With inflation rates at their highest level in 40 years, taxpayers continue to struggle financially as the economy begins to slow, as illustrated by the latest drop in retail sales last month.
“Consumers have struggled in recent years as different factors have affected their financial lifestyle and there seems to be little relief in sight,” said Anuj Nayar, financial health officer at LendingClub.
Sixty-five percent of all paycheck consumers report having “experienced a financially stressful event in the past three years, with sudden income disruptions such as job loss being the most common,” says the LendingClub. .
Many of these financial disruptions, such as the loss of one’s job, are due to the pandemic and its adverse economic effects, the LendingClub found.
Of those who report having experienced a financially stressful event, 77% say they struggle to pay their bills each month.
Half of consumers who live paycheck to paycheck say their paycheck only covers basic expenses. Another 19% say they spent more than they earned in the past six months.
Nayar said consumers could take advantage of credit as a financial tool to manage their spending.
“Setting up an automatic transfer to a savings account, even if it’s a small amount, can help you weather the next storm, because it’s not whether you’ll need cash, but Credit can also be an effective tool to help with expenses during financially distressing events, but those in financial difficulty should exercise caution,” Nayar said.
“Credit card interest rates are rising, and if you don’t intend to pay your bills in full every month, you could potentially find yourself in a revolving debt trap. For those looking for relief , consider refinancing a high-interest debt installment loan.”