Americans get high salaries, but many find themselves living paycheck to paycheck. Find out why. Alex Lago Aug 11 · 4 min read
as seen on Data Driven Investor https://medium.com/datadriveninvestor/5-reasons-americans-struggle-financially-ddac89ad902a
The average American income hovers at around $60,000.00 per year — yet 80% of Americans report living paycheck to paycheck.
Nearly half of all Americans say they couldn’t come up with $400 to cover an emergency. And the average American has less than $4,000 in savings, while 57 percent of U.S. adults have less than $1,000 to their names (The Observer).
In a nation that prides itself on being among the best, these stats are fairly surprising.
We are told to go to college, study hard, and get a job, but this may not even be enough.
So why is it that we struggle so much?
1. Healthcare
Part of the answer could be healthcare.
According to a new analysis by the Department of Health and Human Services, 50 to 129 million (19 to 50 percent of) non-elderly Americans have some type of pre-existing health condition (Cms.gov).
You read it right.
And this is the non-elderly population. These statistics are not skewed.
Americans are not exactly the healthiest, but the poor foods we eat, stress we endure, and the nature of our work all worsen this aspect of our lives.
The average life expectancy in the United States is 78.54 years and this is much lower when compared to other developed countries such as Canada (82.25), UK (81.16), and Japan (84.10).
2. Eating Out
Americans have a culture of eating out and spending a lot of money doing so.
According to a public health nutrition study, Americans tend to eat an average of 200 calories more when they eat out.
The American Center for Disease Control pins about 75% of Americans as overweight or obese. The medical costs associated with being overweight are about $1,429.00 higher than someone of normal weight.
Money spent out in restaurants along with money caused by the disastrous effects of eating out all begin to compound.
These costs eventually put a huge dent in Americans’ wallets.
3. Lifestyle
Americans also have disastrous lifestyles.
According to the Bureau of Labor Statistics, the average American works 44 hours per week, or 8.8 hours per day. A 2014 national Gallup poll put the average number at 47 hours per week, or 9.4 hours per day, with many saying they work 50 hours per week (CNBC).
Just a few decades ago, work was limited to 40 hours but it appears that we have seen a creep upwards.
Working longer hours is linked to health conditions such as high blood pressure and cardiovascular diseases.
This only adds to the cost of healthcare.
People who work longer also spend more on luxury items. The time spent at work makes people think that they are not doing anything and they spend more to justify it.
4. Job-Related Expenditures
Perhaps an even more interesting reason Americans are broke is the ridiculous costs of commuting and going into an office. Most Americans work and commute to cities.
Of course, with COVID, this has changed a little.
But as the crisis ends, more and more workers will be going back to their offices.
CareerBuilder found that, on average, employees spend more than $3,300 a year on everything that goes into getting ready for, going to and being at work every day.
This includes the cost of transportation, food, coffee, child care, and clothing for work. It is ridiculous that we spend all this money, just to earn it back.
5. Debt
Another issue that has recently become a problem is the amount of debt Americans have. This gets progressively better the older the person is, but this can also be due to higher salaries and more time to pay off the debts in question.
The average American has credit card debt amounting to $6,194.00 according to CNBC. This seems to get higher with the more education and income a person has.
Student loans are also a major problem as the more educated population faces a large handicap to having a better life. The average U.S. student loan debt is about $31,172.00 This amount to $393.00 a month and takes about 10 to 30 years to pay off, putting a severe strain on college-educated Americans.
Other debts include car debt, mortgages, and loans. The average American carries a debt of about $90,460.
Conclusion
All these factors are reasons Americans are constantly broke despite earning relatively high salaries when compared to the rest of the world.
The answer to these behaviors is to recognize them and try to implement change. Humans are thinking beings, unlike our animal counterparts.
We do not simply exist to consume. Sometimes our freedom, health, and peace of mind can be worth more than a 40 hour per week job salary. Just some food for thought.