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40% of Americans live paycheck to paycheck


A new study released today by Springleaf Financial, a consumer finance company, shows that approximately 40% of Americans are living paycheck to paycheck.  This means that if they missed a week of work, they would have to borrow money to meet their monthly expenses.  The study also shows that nearly 1 in 4 people have less than $250 in their bank accounts by the next time they get paid, leaving little cushion for medical emergencies, car or home repairs, or other unexpected expenses.  This was found to be true regardless of age, income, or level of education.

Living paycheck to paycheck in Tennessee

We see this situation with many people who visit our office.  A medical emergency, a job layoff, or reduced hours and overtime can completely destroy someone’s financial situation if he or she is living paycheck to paycheck.  Many of these people turn to high-interest lenders, credit cards, or payday advances to make ends meet, only to find themselves getting caught up in an ever-growing snowball of debt.

If you are living paycheck to paycheck and don’t have extra money to pay on your debts, you can make a change and gain power over your finances again.  Filing a Chapter 7 can put a stop to collections as soon as you file your case, and can discharge (or wipe out) most unsecured debts like medical bills, loans, credit card bills, and payday advances.  Filing a Chapter 13 may also give you an opportunity to consolidate your debts and pay them back at a rate you can afford.

Get Out of Debt and Start Saving

The next step after bankruptcy is to avoid going into debt whenever possible and start putting aside a little bit of money each paycheck for savings.  No matter how little an amount you set aside, one of the keys to managing money is to get in to a habit of saving each and every week no matter how much or how little, so you are prepared for the future emergencies that life may throw your way.

Keeping your financial situation in order will reduce the stress in your life significantly.  When decisions are made under stress, emotion plays too big a part in the decision-making process, and that is when mistakes get made.  It is practically impossible to borrow your way out of debt at 25% or higher interest.  Just kicking the can down the road does not fix the problem, and in fact delays making the type of decisions that will get your life back on track.

Regardless of how much you plan, unexpected emergencies can always get in the way.  However, if you have a little nest egg of savings, and you do not panic when emergencies hit, you will be able to deal with them without making drastic and, many times, bad choices.

Make a Change Today

If you are living paycheck to paycheck, borrowing from Peter to pay Paul, and being worried by collection calls and bills, don’t wait – call our office today.  We can help you make a plan to get a fresh start and gain control of your money again.

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