That Sinking Feeling: Most Americans Say They Can’t Keep Up With the Cost of Living

Americans are feeling more confident about the U.S. economy, likely driven by a dip in unemployment and an uptick in economic growth. But despite their relatively optimistic views about the nation’s economy, the majority of Americans feel they’re falling behind when it comes to their personal finances.

That’s according to a recent report from Pew Research Center, which found that 55 percent of Americans say their income can’t keep up with the cost of living in the United States. Not surprisingly, the feeling of falling behind gets more acute as the income level drops. The report said:

Among those with family incomes of less than $30,000, more than twice as many (65 percent) say their incomes are failing to keep pace with living costs. Yet even among those at the top of the income scale, relatively few say their income is increasing faster than the cost of living. Just 19 percent of those earning $100,000 a year or more say their income is going up faster than the cost of living; 48 percent say it’s staying about even, and 31 percent say it is falling behind.

In addition to lower-income families, older Americans and those without a college degree are more likely to report that their incomes can’t keep up with the cost of living.

It’s understandable that Americans feel as if they’re falling behind when you consider what Americans are earning these days.

“The main reason is that income has stagnated for years: Median income, at $51,939, is roughly where it was in 1995 after inflation,” CNN Money reports.

Other report findings include:

• Job outlook. Nearly 60 percent of Americans said it’s not easy to find a job in their community. Just 36 percent said there are jobs aplenty in their town, according to Pew.
• Personal finances. While 42 percent of Americans said their personal finances are in great shape, one in five said their personal financial situation is poor. On a more positive note, 67 percent of Americans said their financial situation would improve over the next year. “While not a sea-change in sentiment, this is as high as personal financial optimism has been over the course of the past seven years,” Pew said.

How do you feel about your personal finances? Are you like the 55 percent of Americans who believe they’re falling behind? Share your thoughts below or on our Facebook page.