Income Inequality, Wage Stagnation, Debt, and the American Dream
Approximately 60% of Americans think that the American dream is now more difficult to achieve. For many, the dream is to own a big house, a nice car, and to pay for monthly bills without running into money troubles. However, all of these depend on household income and its power to both see and seize the dream. Analysts blame this turn of events on income inequality and the fact that the income gap between the affluent and everyone else has been seeing a steady climb for some 30 years.
The Struggle of the Middle Class
Many households in the United States now spend more than they make. According to a CNBC report in July 2017, most Americans consider themselves as part of the middle class but that their six-figure income is barely enough to cover for transportation, healthcare, housing, and other needs. A Forbes report in 2016 also paints a similar picture. The report notes that 63% of Americans do not have enough money stashed away to cover for a $500 emergency.
The Debt Burden
In May 2017, the Federal Reserve Bank of New York reported a new peak in household debt in the US. According to the report, the debt burden has grown to a whopping $12.7 trillion with student loans, housing payments, credit card debt, and auto loans being the major contributors. Although many assume that this is mainly due to careless spending, it is not true in most cases. Student loans are higher now because of soaring tuition costs, according to experts. Despite the fact that cost of living has gone down, for the most part, the United States has been experiencing a wage stagnation for years.
How to Get Back on Track
Achieving the American dream can mean tightening your belt for a number of years but with the average household debt at $137,063, getting back on track is easier said than done.The good news is, personal loans can help consolidate debt at favorable rates. While this is still a form of debt, a personal loan can help Americans pay off their debt sooner and still save a little money along the way. Personal loans have lower interest rates in general, and some lenders even offer rates as low as 5%.
Basic financial management techniques also help, according to experts. Apart from paying off all debts, it is important to find ways to decrease monthly expenses. Getting a cable and internet bundle, for example, is a good idea. For individuals who don’t really watch that much TV, it is advisable to get rid of the cable altogether. Even the little things count. Your daily caffeine fix at your favorite coffee shop can survive a downgrade by making your coffee at home. It is also a good idea to list your priorities and to remind yourself of these priorities every day. Sticking to paying for your needs first before spending your money anywhere else will make financial decisions easier for you. With enough discipline and drive, you still have the chance to live the American dream.
Jenny Holt <jennyholtwriter@gmail.com>
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