Many Americans struggle to save or pay down debt due to the cost of living creep. (iStock)
The cost of living has risen to the point that most Americans are feeling the pressure. An astounding 80% of Americans have experienced a cost of living creep in the last few years, a Credit Karma study found.
This cost of living creep means that consumers are spending more money to afford the same amount of goods or services as they did in the past. About 66% of those surveyed said the rising cost of living is holding them back from meeting their financial goals.
A lack of rising incomes and high interest rates are two of the biggest factors contributing to this cost of living creep. Almost 60% of people believe their incomes won’t ever catch up with the current cost of living. Even those who have seen their incomes rise can't keep up with increased costs.
Paying down debt, saving for retirement and buying a new car are all being put on hold due to an inability for many Americans to keep up with their everyday expenses. More than half of those surveyed have taken on extra debt or are unable to save now that they’re dealing with costly bills and expenses.
Saving in general has taken a back burner, with 37% of respondents unable to set aside any of their income for savings goals. Instead, their incomes go toward basic living costs, which are still difficult for many Americans to meet.
Struggling with debt and high living costs? A personal loan can help you knock out high interest debt and free up money in your budget. Use an online marketplace like Credible to make sure you’re getting the best rate and lender for your needs.
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Many retirees considering temporary work to keep up with expenses
Living costs are rising to the point where retirees and seniors are thinking about returning to work temporarily. One third of retired individuals considered taking on a few shifts per week, an Indeed Flex survey showed.
Around 42% of seniors who never left the workforce also considered adding extra shifts at work or through side hustles.
About one fifth of those surveyed cited a lack of savings as the reason they were returning to work temporarily, while over 71% blamed cost of living increases.
Outside of financial reasons, some retirees also plan to return to work for personal fulfillment or to have a greater number of social interactions.
If you're interested in consolidating or refinancing debt, it can help to have experienced loan officers on your side. Visit Credible to get all of your loan consolidation lender and rate options.
AMERICANS ADJUST RETIREMENT GOALS UP 15% BUT SAVINGS DROP: SURVEY
Cost of buying a home pushing many to rent instead of buy
One of the most expensive costs Americans are dealing with is housing. Both buying and renting costs have grown substantially since before the pandemic, but the cost of buying is outpacing renting in the 50 largest metros across the country, Realtor.com found.
"In all of the major housing markets, renting is more affordable than buying a starter home," Realtor.com economist Jiayi Xu said. "It’s important for first-time buyers who are thinking, ‘Should I buy now or later?’ This will give them a clearer picture about their financial costs."
Rental costs in these metros fell for the seventh consecutive month as of February. Costs associated with purchasing a starter home, on the other hand, rose 60.1% from last year and cost buyers an extra $1,027 more each month.
Renting is largely cheaper than buying right now due to high mortgage interest rates settling above the 7% range. These rates push the cost of buying up. Paired with already high home prices, this creates a buying nightmare for prospective homeowners.
If you think you’re ready to shop around for a home loan, consider using Credible to help you easily compare interest rates from multiple lenders in minutes.
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