A recent survey reveals the financial challenges faced by Americans in 2023, with many forced to make difficult choices to cover their bills.
According to the study conducted by Assurance IQ, a staggering 66% of U.S. adults had to make sacrifices to meet their expenses over the past year. The survey polled 5,000 individuals and highlighted Americans' different tactics to navigate financial hardships.
More Americans Taking Loans, Using Credit Cards to Pay Bills
The most common method employed by individuals to cover their bills when funds fell short was to borrow money or resort to credit cards, with 41% of respondents admitting to this approach.
Lower-income households, particularly those earning less than $75,000 annually, were hit the hardest, with 47% reporting the need to borrow funds for expenses in 2023. This trend underscores the widening gap in financial stability between income brackets.
Reliance on credit cards for daily expenses has soared in recent years, propelled by high inflation rates that strain household budgets. By December, credit card debt had surged to a record high of $1.13 trillion, according to New York Federal Reserve data.
However, this escalating debt burden has led to concerns about consumers taking on more than they can handle, as evidenced by rising credit card delinquency rates surpassing pre-pandemic levels.
Americans' Sacrifices to Cover Monthly Bills
Despite efforts to manage finances, many Americans found themselves resorting to drastic measures to cover their bills. The survey found that 38% of respondents resorted to paying bills late, while 34% utilized emergency savings or other methods to meet expenses.
Shockingly, nearly a quarter of respondents (24%) admitted to skipping meals, underscoring the severity of the financial strain a significant portion of the population faces.
Additionally, 23% resorted to selling possessions, 23% overdrew their bank accounts, 21% negotiated payment terms, and 9% canceled or decreased insurance coverage.
Costly Healthcare and Insurance Coverage
Beyond financial struggles, Americans also grappled with the complexities of healthcare costs and insurance coverage. The survey revealed that 46% of respondents avoided seeking medical care in the past year due to affordability and insurance coverage concerns.
This behavior was particularly prevalent among younger adults and lower-income individuals, indicating disparities in access to healthcare services.
Confusion surrounding health insurance was evident across all income groups, with 65% of respondents uncertain about their health insurance deductibles. Despite earning higher incomes, many individuals expressed dissatisfaction with their insurance coverage, with 31% feeling insufficiently covered and 48% believing they were overpaying for health insurance.
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