More than 1 in 4 workers making 0,000 or more now say they live paycheck to paycheck.  So even rich people struggle with saving, and professionals offer 3 solutions

More than 1 in 4 workers making $200,000 or more now say they live paycheck to paycheck. So even rich people struggle with saving, and professionals offer 3 solutions

According to one report, 93% of rural consumers and 92% of urban consumers say they are noticing higher prices due to rising inflation.

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Banking doesn’t mean you have banked loot. About 45% of those making more than $100,000 say they live paycheck to paycheck; 47% of those earning between $150,000 and $200,000 per year; and 28% of those making over $200,000, a new report from PYMNTS.com found. Additionally, a 2022 survey by LendingClub found that 30% of those making $250,000 or more are living paycheck to paycheck. And that’s a shame, since many savings accounts are paying more now than they will in a decade – see the highest interest rates you can get on a savings account right now.

“The combination of taxes and inflation leaves little purchasing power,” says Gary Zimmerman, CEO of MaxMyInterest, who notes that a $100,000 salary isn’t what it used to be. So how do these high earners start to spend less and save more? We asked the pros.

One way to “save more is to add discipline.”

“To break out of the paycheck-to-paycheck cycle, you need to make more or spend less — and preferably both,” Zimmerman says, adding that while this may seem unrealistic in today’s economy, a way to take back control is in it consists, “”Saving more means adding discipline.”

As? “Automatically deduct a portion of your biweekly paycheck to go straight into a savings account,” says Zimmerman. “Or, better yet, choose to save as much of your income as possible by channeling it into a 401(k) plan, which is tax-advantaged and often supplemented by your employer.” If you don’t even see the funds, you won’t miss them and you certainly won’t spend them.”

See the highest interest rates you can get on a savings account right now.

This is supported by research: A recent study by professors at Harvard, Yale, Brigham Young and William & Mary found that people who automatically enrolled in a company pension plan still had similar levels of debt as those who opted to save yourself. “We found that there was no difference between the two groups in how much credit card borrowing they took out,” said Yale finance professor James Choi, who helped compile the report. “There was no difference in the credit scores and their measures of financial distress.”

Review your spending habits and reduce lingering debt

Try to pay off expensive debts as quickly as possible, and make big changes to important items like rent, food, travel, and more when you can. In particular, NerdWallet data analyst Elizabeth Renter suggests looking at ways to reduce credit card debt. “If you keep a balance from month to month, you’re penalizing yourself with unnecessary interest, and interest rates go up,” says Renter. “Consider opening a balance transfer credit card to cash out the balance during an initial interest-free period.”

Renter adds that you should also try to limit luxuries like streaming accounts, branded meals, and sit-down meals.

See the highest interest rates you can get on a savings account right now.

Consider Additional Income Through the Gig Economy

Even if you’re earning what looks like a lot on paper, living paycheck to paycheck can help boost your income. “Now, with the gig economy we’re in, increasing income just got easier,” said Vanessa N. Martinez, founder and CEO of Em-Powered Network, a financial advisory and mentoring program for women. For a professional, that could mean becoming a consultant of some sort.

Regardless of whether you choose any of the above strategies, it’s clear that all consumers, including high earners, feel the pressure. According to the PYMNTS.com report, 93% of rural consumers and 92% of urban consumers say they are noticing higher prices due to rising inflation. In response, the authors say people of almost all socioeconomic classes need to take some action to adjust. “As inflation is expected to continue, it is likely to continue to pressure consumers of all financial lifestyles and time will tell how well they continue to adjust.”

The advice, recommendations or reviews in this article are those of MarketWatch Picks and have not been verified or endorsed by our trading partners.

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