Many Americans find themselves on precarious financial ground despite being employed full-time.
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According to a government study from 2019, about 70% of the 9 million adult wage earners receiving food assistance from the federal Supplemental Nutrition Assistance Program (SNAP) worked full-time hours (35 hours or more) on a weekly basis [1].
One in 3 Americans have no emergency savings set aside, according to an Empower study [2]. Emergency funds are crucial when people face unplanned financial events like a job loss, car repairs or a medical bill.
The American middle class is also said to be shrinking. According to Pew Research, the share of Americans who are in middle-class households has gone from 61% in 1971 to 51% in 2023 [3].
Imagine Lionel, a 35-year-old single man with a good, stable job making $60,000 a year in Chicago. He has no debt or dependents and $6,000 in emergency savings. On the surface it looks like he’s doing alright, but he has immense stress about his financial situation, knowing one bit of really bad luck, like a health emergency, could see him spiraling in debt.
If you have similar anxiety about money, here’s what you can do to become more financially stable, prepare for a potential future emergency, and start building wealth.
Pew Research reported that growth in middle-class income has fallen behind the income growth in the upper tier, and the share of total U.S. income held by households within the middle class has plummeted. The middle class’s share of all household income is just 43%, while 51% of the population is considered to be middle class. Their share of income is below their share of the population, as the incomes of middle-class households haven’t kept pace with the rise in the incomes of upper-income households.
While the middle-class lifestyle once meant having a nice house, two cars, a couple of kids, and some money in the bank, that’s not necessarily the case anymore.
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How far middle-class individuals can stretch the income they do have depends on location, as well as which end of the scale their income falls. As a result, it doesn’t really matter which class you are in when it comes to your finances. What does matter is whether you feel secure in how much money you have in the bank, and whether your income stretches far enough to cover what you need. If it doesn’t, then you need to make a change, regardless of whether you’re lower, middle, or upper class.
