Fewer Americans Living Paycheck-to-Paycheck

Hey there, money savers! It’s high time we take a fresh look at your financial health. No more living paycheck-to-paycheck or being stressed out about those unexpected expenses. We’re all about making your money work smarter and not harder.

Remember those bumpy times when almost 61% of us had to survive from paycheck to paycheck (source: LendingClub report)? We’ve all been there, and it’s no picnic. Thankfully, that figure slipped to 57% in May this year, giving us some much-needed breathing space.

And breathe we did! Our buying power got a much-needed boost last month, thanks to the easing inflation. For the first time in two years, we felt our dollars stretching a bit more. No more pinching pennies just to cover the basics. We’ve also dodged a bullet with the consumer price index dropping to 4% in May, after a record high of 9.1% in June 2022. Sounds like a little victory, doesn’t it?

But let’s face it, the past year of crazy-high costs hasn’t been a walk in the park. Many of us felt the pinch and had to dip into savings, max out credit cards, or even take personal loans to cover our day-to-day expenses. And with credit card interest rates at an all-time high of over 20%, that’s not a path we want to tread.

What’s more, our latest survey by LendingTree found that 73% of us said higher prices have affected our ability to cover monthly expenses, including cell phone bills, utilities, auto insurance, and even internet service. Feels all too familiar, doesn’t it?

It’s clear we need to have a healthy buffer of savings for those rainy days. But here’s a little secret: most Americans are uncomfortable with their emergency fund levels. Believe it or not, fewer than half of us have enough emergency savings to cover at least three months of expenses, and about 22% don’t have any at all.

That’s where we come in! It’s recommended to aim for six months’ worth of expenses set aside in risk-free securities or cash. Some advise putting at least 10% of your income a month in an after-tax brokerage account or a high-yield savings account, a surefire way to boost your financial confidence and reduce stress.

But don’t worry, you’re not in this alone. Wellthi is here to hold your hand and guide you towards achieving these financial goals. Together with your friends, we’ll help you build that emergency fund, manage your monthly expenses, and gradually escape the paycheck-to-paycheck lifestyle. So, ready to get on the road to financial wellness? With Wellthi, you can! Let’s do this, together.


Feeling ‘Tip Fatigue’? How Inflation and Digital Prompts are Shaking Up American Tipping Habits

Wellthi fam, buckle up. We’re about to dive into the surprisingly complex world of tipping – think of it as the sociology course you didn’t know you needed.

Picture this: you’re at your local coffee shop, grabbing a quick to-go latte on your way to work. As you pay via your phone, a prompt pops up on the screen asking if you want to leave a tip. The suggested amounts range from 15% to 35%. A touch awkward, right? Like being asked on a first date if you see wedding bells in the future.

This is the new normal, friends. In our increasingly cashless society, we’re being nudged to tip more, and for a wider range of services than ever before. From your rideshare driver to your pizza delivery guy, everyone has their digital tip jar out.

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Yet, a recent Bankrate report has shown that fewer consumers are always tipping now, compared to last year. So, what gives? The answer, in part, is inflation and economic uncertainty. In a nutshell, we’re feeling the squeeze and are starting to resent the constant tipping prompts.

The pressure to tip has ramped up significantly over the last year, with two-thirds of Americans having a negative view about tipping, especially when it comes to digital and contactless payment prompts.

Interestingly, while tipping at full-service restaurants is holding steady (yep, that 20% gratuity for your favorite waiter is still the norm), tips at quick-service restaurants have fallen to a five-year low of 16.7% in 2023.

During Covid, it felt natural to be extra generous. But maybe that set a standard what wasn’t really sustainable. It’s like committing to a juice cleanse after one too many holiday cookies – good in theory, but not so fun in practice.

The twist in our tipping tale? Some workers in the service industry, earning minimum or less than minimum wage, do rely on those tips for their income. In these cases, the ability to leave a tip via digital transactions is vital.

But where workers don’t depend on gratuity for their income, we, as consumers, should use our judgment. Essentially, it’s about thinking whether that person improved your experience.

So, it seems like it’s time to rewrite the rules of the tipping game. Think of it as a complex dance – one where we need to balance generosity with financial sensibility.

Got an opinion on tipping in our cashless society? We’d love to hear your thoughts. Until then, keep your financial cool, Wellthi fam.

You can download the Wellthi app here, and act by July 3, you could win $10,000 for just posting your financial goal in the app!

Go deeper

The Evolution of Tipping in America: This article from Time examines how tipping became such a standard part of American culture. Link

The Impact of Inflation on Consumer Behavior: An article from Yale Insights that delves into how inflation impacts the way consumers spend their money, including how much they tip. Link

Bankrate Report on Tipping Trends: Access the original Bankrate report that documents the shift in American tipping habits. Link

The Ethics of Digital Tipping: A thought-provoking piece from Wisconsin Public Radio on the growing pressure to tip digitally and the ethical questions this raises. Link

Wellthi reels in significant investment to reshape social finance and mobile banking: Learn more about Wellthi and our mission to empower everyone to meet their financial goals. Link


#TippingCulture #InflationImpact #DigitalTipping #ConsumerBehavior #ServiceIndustry #CashlessSociety #FinancialWellbeing #WellthiFam


What is the COLA and Why You Should Care

Hey there Wellthi fam, you may still be a long way from retirement, but it’s important for you to stay informed about your Social Security benefits. It shouldn’t be your only source of retirement income, but it can round out your savings so it’s a good idea to stay on top of things.

You may have heard about something called the Cost of Living Adjustment (COLA) recently, because this year saw the biggest increase in 40 years, 8.7%. A new adjustment is coming in 2024, and while we don’t have the exact numbers just yet, we can make some educated projections based on recent inflation trends.

But first, let’s set the record straight. The COLA is not determined by the President or Congress. Since 1975, it has been automatically linked to inflation, specifically the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). This index measures the increase in prices experienced by workers and serves as the basis for calculating the COLA.

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Now, let’s dive into the projections. We’ll explore three scenarios: low, mid, and high inflation. In the low inflation scenario, where prices remain stagnant through September, we anticipate a 2.2% COLA for 2024. However, as we approach September and observe positive inflation, this number is likely to increase.

The mid-line scenario is the most probable one. If inflation continues at a moderate pace, retirees can expect a COLA of around 3% in 2024. This means a little extra in your pocket to cover rising expenses.

In the high inflation scenario, with a 0.4% monthly increase in the CPI-W through September, we could see a 3.5% COLA for 2024. While this scenario is not out of the question, it would require sustained high inflation levels.

The differences between these scenarios may seem small, but they can have an impact on your monthly benefits. For example, a 2.2% COLA versus a 3.5% COLA could mean a difference of about $25 per month on a $2,000 benefit or around $40 per month on a $3,000 benefit.

It’s important to note that the COLA also takes into account the increase in Medicare premiums. Medicare announces its premiums around the same time as the Social Security COLA. While a portion of the COLA may go toward higher healthcare costs, you’ll still receive the full benefit of the COLA.

We understand that you may be rooting for a higher COLA, but here’s the twist: a lower COLA can actually be better for retirees. Lower inflation means your savings and investments outside of Social Security will hold their value longer. So, in a way, you want a lower COLA to coincide with lower expenses.

Some people speculate that the government under-reports inflation. Even if that were the case, you’d still prefer lower inflation and a lower COLA. It’s all about preserving the purchasing power of your savings and investments.

At Wellthi, we’re here to support you on your retirement journey. Our social savings app allows you to set and achieve financial goals with your friends, making the process even more enjoyable. So, as we await the official announcement of the 2024 Social Security COLA, remember to stay informed, plan wisely, and make the most of your retirement years.

We’ll keep you updated on any developments, so stay tuned for more financial insights and inspiration. Together, let’s embrace financial wellness and create a future where your dreams can thrive. Your financial well-being matters, and we’re here to help you every step of the way.

You can download the Wellthi app here, and act by July 3, you could win $10,000 for just posting your financial goal in the app!

Go Deeper

  1. Social Security Administration COLA: A direct link to the Social Security Administration’s page on COLA where readers can learn more about it.
  2. Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W): This link gives an in-depth explanation of the CPI-W and its implications.
  3. Medicare Premiums: This will help readers understand how Medicare premiums could potentially affect their COLA.
  4. Inflation Calculator: Useful tool for understanding how inflation could affect purchasing power.

#COLA #SocialSecurity #RetirementPlanning #Inflation #Medicare #FinancialWellness #WellthiCommunity #PersonalFinance #SavingsGoals