As the cost of living rises, some American households are stretched too thin.
Now, roughly 1 in 5 workers cannot make it from paycheck to paycheck, according to a report.
From gas to groceries, soaring prices are straining households across the board.
More than three-quarters of working Americans said inflation has impacted their finances over the past year, according to a report by Salary Finance.
While wage growth is high by historical standards, it isn’t keeping up with the increased cost of living, which is rising at the fastest annual pace in about four decades.
When wages increase at a slower pace than inflation, paychecks won’t stretch as far.
Now, workers are running out of money faster, Salary Finance found.
Roughly 20% of employees regularly run out of money between paychecks, up from 15% last year, according to the survey of more than 3,000 working adults in February.
As a result, about one-quarter of those polled said it’s harder to afford necessary expenses and one-third are unable to build savings, issues that are particularly problematic for low-to-moderate income workers.
Low earners funnel a bigger share of their budgets to transportation costs and other staples, like food and energy, relative to wealthier households, data show.
Further, people with $50,000 or less in annual income already have thinner margins between the money they take home and what they spend, according to Kayla Bruun, economic analyst at Morning Consult.
While no one is immune to recent price spikes, smaller income households are feeling it most because they have less of a financial buffer, Bruun said.
