Majority of Americans made sacrifices to cover monthly bills last year

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Most Americans found themselves forced to make trade-offs in order to make ends meet last year, with a majority reporting they had to take measures in at least one instance to cover monthly bills in 2023.

A new study released Thursday by Assurance IQ found 66% of U.S. adults confirmed in a December survey that they had made sacrifices to pay their expenses during the previous 12 months, and they broke down the various tactics they used.

Researchers polled 5,000 individuals, a majority of whom earned $75,000 or more a year, and found the most common way Americans covered their bills when they were short on funds was to borrow money or turn to credit cards (41%).

Unsurprisingly, lower-income households were hardest-hit, and those making less than $75,000 were more likely to borrow funds for expenses, with 47% saying they needed to do so last year.

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Americans have been increasingly leaning on credit cards for daily expenses in recent years as high inflation has taken a toll on household budgets. Credit card debt surged to a new record high of $1.13 trillion as of the end of December, according to New York Federal Reserve data.

An individual using a credit card reader

However, consumers are increasingly taking on more debt than they can handle, and credit card delinquency rates are now above pre-pandemic levels after dropping following COVID-related government subsidies.

The Assurance study found that across all incomes, the second-most common way Americans handled a situation where they were short on funds last year was to pay a bill late, at 38%.

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Thirty-four percent of respondents said they used other methods to pay their bills in a pinch, like pulling from their emergency savings, but many had to resort to other tactics.

Grocery store prices

Nearly one-fourth (24%) said they skipped meals to cover their bills, while 23% sold possessions, another 23% said they overdrew their bank accounts, 21% said they negotiated payment terms and 9% canceled or decreased insurance coverage.

“Our research found that not only do low- and middle-income households struggle to cover emergencies and unexpected expenses, but they also must make tradeoffs to keep up with regular bills,” Assurance IQ CEO Allison Arzeno told FOX Business. 

“Without a financial safety net, many households find themselves constantly on the brink of poverty,” Arzeno added.

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