A new report from Bankrate.com reveals that three-quarters of Americans are living pay-check-to-paycheck.
By this, we mean they have little to no emergency savings, leaving them vulnerable to a financial blow that could be delivered by something such as an unexpected illness, a job loss or a car accident.
In many cases after such financial trauma, filing for a Louisville chapter 7 bankruptcy is your best option for long-term recovery.
The Bankrate.com survey analyzed information from some 1,000 survey respondents. Of those, less than a quarter had enough in their savings to cover themselves for at least six months if something unexpected occurred. About 50 percent had less than a three-month cushion. Nearly 30 percent had no savings whatsoever.
While a senior financial analyst at the research firm called the results “disappointing,” what he found even more troubling was the fact that these figures had remained fairly stagnant over the last three years. It was expected in the midst of a a major recession that we would see depleted savings and less job security.
But today, even as people report feeling safer in their jobs, with a higher net worth and in better overall financial standing, they still aren’t saving.
For many, it’s not a matter of irresponsibility. It’s a matter of impossibility. People were trying. In a separate survey, an online lender found that 22 percent of people had less than $100 in cash in case of an emergency. About half had $800 or less. The problem for most people is that after they had finished paying their household bills and child care costs, there simply wasn’t anything left over to spare.
For all this talk of “economic relief,” until wages start improving to keep better pace with inflation, things really aren’t expected to get a whole lot better.
Still, a little strategy might end up going a long way. Putting away as much as possible each month, no matter how little, may ultimately help you out big time in the future.
Consider the following:
- Take the time to get on the same page with your spouse about finances. Working toward a goal together can go a long way in helping you reach it.
- Look into lowering your taxes. Federal income taxes are expected to increase fairly substantially in the next year. If you can work to be smart about deductions and write-offs, you could end up allowing yourself to put that extra cash into savings.
- Help your child make smart decisions about college by picking a major that is likely to offset tuition costs, and also by getting creative in using a combination of student loans, grants, scholarships, etc.
- Pay bills with automatic monthly withdrawals – and make one of those bills a minimum contribution to your savings account.
- Work to eliminate needless purchases. Ask yourself if you’ll really need or even want it in a week. If not, it may not be worth the cash.
If you do find yourself overwhelmed by debt, know that you do have options available to you and we are here to help.
If you need to speak to a Kentucky bankruptcy attorney or Louisville foreclosure defense firm, contact the Schwartz Bankruptcy Law Center at 866-270-4495 for a free and confidential consultation to discuss your rights.
76% of Americans are living paycheck-to-paycheck, June 24, 2013, By Angela Johnson, CNN Money
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Financial Infidelity Can Lead to a Joint Bankruptcy Filing, April 10, 2013, Louisville Bankruptcy Lawyer Blog