According to a story posted by CNBC on August 1, 2022, the pervasive inflation in our nation is causing increased economic hardship for people across all income levels. As of June, 157 million adults – 61% of Americans – reported living from paycheck to paycheck. That number is up from 58% just last month and 55% only 12 months ago.
The looming recession is not only affecting the lower income demographic, however. Wage earners at much higher income levels are also stretched thin month to month, with 36% of those earning over $200,000 reporting paycheck-to-paycheck status. Inflation continues to be an issue for Floridians.
Although hourly wages are 5.1% higher than in 2021, inflation and prices have been increasing even more rapidly, most notably in the grocery store and the gas pump.
What the Financial Data Shows
The Consumer Price Index, which monitors the average change in prices for consumer goods and services, spiked 9.1% in June – much higher than expected, as inflation grows at its fastest rate since 1981. Another key indicator, the Personal Consumption Expenditures Price Index, which measures price fluctuations of household goods and services, also rose 6.8%, the most significant 12-month move since 1981.
These numbers reveal that Americans are being forced to spend more to cover basic monthly expenses, making it ever more challenging to make ends meet. Residents must dip into savings accounts, depleting emergency reserves. They are also utilizing credit cards to pay essential bills, meaning higher than average monthly balances – and nearly half of the country is slipping into deeper debt and financial vulnerability.
What the Data Means to Sarasota Residents
In the best circumstances, life can throw a curve ball to responsible and financially stable individuals. Whether a sudden lay-off, an unexpected illness, or the loss of a needed vehicle, even the most prudent and careful person can find themselves drowning in debt.
Given the reality of the above data, even those who haven’t suffered an unexpected event can fall behind. As food and gas put heavier strains on monthly budgets, the same income simply doesn’t last as long as it did just a few months ago.
Here’s a Bright Spot: The real estate market in Florida is still strong. Those who can downsize may be able to move to a more affordable situation, or they may choose to capitalize on the equity in their current home. However, those looking to take a further loan out on their home should speak with a financial advisor to understand the implications should the market begin to fall.
Personal Bankruptcy Provides a Solution
Personal bankruptcy has always offered the consumer or homeowner a way to relieve the stress of living with excess debt. The current economic conditions may force even more individuals to seek bankruptcy protection. If you are in such a situation, it is important to realize that these factors are out of your control – and there is nothing to feel shame over. Instead, you should feel free to explore your options to protect your home, car, and family through a personal bankruptcy filing.
Remember: If you do not fully understand the bankruptcy process and want to learn more about the potential relief and ramifications, you should speak with a professional, experienced bankruptcy attorney as soon as possible. They can advise you about your situation, options, and the appropriate next steps to take – whether that includes bankruptcy or not.
A successful bankruptcy filing can help those struggling with their finances and guide them toward sensible and achievable recovery. But don’t walk that path alone – call today to guarantee that you have the knowledge and experience of a trusted Sarasota bankruptcy lawyer by your side.
Richard V. Ellis is a bankruptcy and family law attorney located in Sarasota, Florida.