Written By
Sheikh Hasib Ahmed
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When people think of the phrase "living paycheck to paycheck," they may visualize low-income families that are struggling to make ends meet.
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However, according to recent research, a sizable proportion of high earners, particularly those who make over $150,000 a year, are also victims of this vicious financial cycle.
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CNBC reports that while 75% of people on $50,000 or less are living paycheck to paycheck, this percentage rises to 65% for people making $50,000 to $100,000.
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A whopping 45% of people making $100,000 or more said they were living paycheck to paycheck.
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Moneywise highlighted a recent report that cited findings from the personal finance program Quicken and showed that 32% of Americans with yearly incomes of at least $150,000 have financial difficulties.
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The Federal Reserve Bank of New York's most recent figures reveal a noticeable increase in borrowing habits. The overall credit card debt exceeded $1 trillion by the second quarter.
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People in all income categories are using credit cards more frequently despite rising interest rates, especially to bridge the gap between paychecks.
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High incomes become trapped in this cycle for a variety of reasons. The following are some contributing elements:
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High cost of living in cities: Many wealthy people live in big cities where the cost of living is much higher.
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Debt obligations: Despite earning outstanding wages, many people still struggle with debts like credit card balances, mortgages, and student loans.