Showing posts with label Middle income trap. Show all posts
Showing posts with label Middle income trap. Show all posts

Tuesday, April 28, 2015

Why Do Many Middle Class Americans Feel Trapped When It Comes To Finances?

Even with some of the recent economic problems slowly improving, more and more middle class families feel as if they are trapped in their socioeconomic level with no options for upward mobility. 

Here is a closer look at just a few of the reasons that many working professionals feel as if the odds are stacked against them. 

Predatory Loans


Predatory loans and the banking industry in general are often seen as the biggest concern when it comes to class mobility. 

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Teenagers and young adults are expected to earn their degree with loans, enter an extremely competitive job market, take out more loans for a house, and then hope that their income over the next 30 or 40 years is enough to cover payments. 

A single missed payment could mean an increase in the loan's APR or being immediately sent to debt collectors. This means a hit to one's credit score and difficulty attaining any loans in the future. 


Decline of Middle-Skill Jobs


There is no longer any stability when it comes to middle-skill jobs, or jobs that do not require a degree or advanced training. 

The “value” of a high school degree has gone down significantly as well as the return on investment for an advanced degree. No matter whether students are looking to enter into the job market immediately after high school or would like to explore their options for higher education, there is never really an ideal time or field that will come without risks. 


The Threat of Major Injuries or Other Financial Drains


Even a family that has made decent gains when it comes to their savings or financial security may see it all torn away from them in an instant. 

Although sweeping changes have been made to the healthcare industry, medical bills remain the number one cause of bankruptcy. In situations such as an auto accident, victims may not see money for years on end as their bills continue to mount. 

This is one of the reasons that many have turned to financial services such as structured settlement buyers that can offer a lump sum instead of ongoing payments.


Limited Safety Nets


For quite a few years, many workers that were considering their options for retirement simply assumed that Social Security payments would be paid back after years of being taken from their wages. 

Up until a few years ago, these programs were then considered to be a supplemental form of income when retiring, but those days are long gone. Today's middle income families often assume that there will be absolutely no financial safety net unless they turn to the private sector for their savings. 

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Medical Bills


Unexpected medical bills can take a toll on anyone's finances. Even though you may get compensation for injuries sustained to due to another person's neglect, you may not see the money right away, making it difficult to pay medical bills. 

If you have won a structured settlement, consider selling it to pay off your debt. Visit myLumpsum.com for more information.

Studies carried out by the PEW Research Center show that the divide between middle class families and upper class families continues to widen. 

This is why so many must now search for inventive ways to gain some momentum when it comes to financial mobility. 

Talk to a financial expert if you feel stuck or can't find a way to get out of debt. It's important to take control of your finances now if you feel overwhelmed. 

The sooner you make a better financial plan, the better off you will be in the long and short run.

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