An inability to pay outstanding debt, in full or in part, or declaring insolvency may lead to bankruptcy. There are three parties to any bankruptcy proceeding: debits, creditors, and a trustee. Bankruptcy is an expensive process and may adversely affect future credit opportunities. ...
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More Americans Living Paycheck To Paycheck By Danna Schneider In this day and age, you'd think that the gap between the wealthy and poor would be closing in, but in fact the opposite of this ideal is currently happening here in the US, and even the middle class is starting to feel the squeeze of living paycheck to paycheck.
Reports are surfacing that due to the increases and constant fluctuations in gas prices, heating, electric, food and mortgage rates, many are feeling their wallets tighten, and it isn't simply limited to what was considered lower income families and individuals.
There are food donation services and soup kitches that are reporting increases in patronship, and it's at quite an alarming rate of increase to boot - around 30%.
Not only are the poor seemingly getting poorer, but the middle class now are also starting to live paycheck to paycheck and struggling to make ends meet, while the rich and wealthy seem to be getting richer and wealthier.
It's not abundantly apparent why this is, and that would most likely take a very large study in demographics and social economics to figure out the reason or reasons, but the fact still remains that we are a culture that is living in extremely difficult financial times with very little wiggle room for things to get much worse.
I just went to the gas pump the other day and paid over $40 to fill my modestly sized tank. Imagine if that $40 was almost ten percent of my paycheck, which it quite frankly is for many people.
Now imagine that you have to fill that gas tank several times a week to get to and from work to make money. You get the picture.
Things like gas prices and the cost of living are sucking people dry, and more and more people are cutting back on spending in areas like food and essentials just so that they can actually pay their rent and mortgages, and pay to keep their children in a heated home in the winter.
This is the bleak reality of living today, and unfortunately it is the reality for a growing segment of our population unless things get better soon.
How can we expect people to put away for their retirement savings when they are struggling just to survive? Which brings me to another issue that is common today, those relying on social security payments to live.
Many elderly who do not have money put away for retirement and have had to rely solely on social security payouts, which occur only once monthly, are finding it nearly impossible to make this money stretch an entire month for all of their necessities, let alone a little frivolous spending once in a while.
This impacts the economy as a whole, since this means less people who can go spend their money at places of business, which depends on us as spenders to keep the economy going.
It then becomes a vicious cycle since the economy relies on spending by consumers to keep going strong. Businesses in turn employ people, and when they aren't making enough money from consumer spending, they are forced to make employee cutbacks and layoffs to allow for less revenue.
The
housing market has also taken quite a fall over these past few years, with news of even greater woes coming out virtually every month, and news of big housing companies going under or filing for bankruptcy.
This was also fueled by speculators who had gotten into the whole flipping craze and bought up real estate without actually having the right financial backing to do it, and when their houses didn't sell, we saw a lot of these would be flippers bankrupting the mortgage lending market.
Speculation also is that the middle class is spending above their means, with a "competing with the Joneses" mentality that homes have to be grandiose with the latest appliances, high end landscaping, central air and all the latest electronics to fill it to boot.
Just a decade ago, we didn't see all the homes with the nine foot ceilings, prime woodwork with stainless steel appliances, the kitchen you could play catch in, and five bathrooms.
Today, many people think this sort of thing is "standard", and that mentality is not exactly helping the middle class retain their middle class status.
The middle class is quite simply over spending many economists say, and they are putting themselves in deep revolving debt to live a certain lifestyle that was not the "norm" years ago. This leaves the middle class with a severe shortage of cash flow for the extras in life, as well as in mounds of debt, and with very little leftover, if any, to save for the future in interest bearing accounts.
This could definitely spell trouble for the future when this class is retiring and finds they do not have ample money to retire comfortably on, i.e. to retire living the same lifestyle they did pre-retirement.
This anecdotal data, paired with data showing the economy's state of affairs definitely spells trouble for our financial futures. If you feel you fit into one of these classes, there are some excellent tips you can get for investing for the future even while on a strict budget, available for free online.
Just check out CNN Money or Motley Fool and you'll get daily tips and tricks for stretching your dollare as far as it can go. After all, your financial future and current financial situation can only be helped by one person, and that is YOU.
Danna Schneider founded the Credit Card Reviews Catalogue, where a catalogued review of credit cards ranging from low interest credit cards, special interest credit cards, and the best deals currently going in credit can be found. Also you can find prepaid credit card reviews (this is an excellent way to not spend more than you should) at Prepaid Credit Cards .
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