As if we didn’t have enough to worry about. A recession looks increasingly likely, through most of 2023. Inflation is rising, along with interest rates, and more and more Americans continue to find themselves in dire financial straits.
But according to TikTok financial influencer Ryan Halbert, it will only get worse. If you make less than $25 an hour, it actually says “you should be terrified”.
In a video that quickly went viral, Halbert broke down the average cost of living in America. And it is certainly terrifying. After putting together all the typical essentials, like rent, groceries, gas, and water, the total average cost came to $3,285.37 per month.
Spread over a 40-hour work week, that means you need to earn at least $20.50 per hour.
However, what’s not included here is the tax, which Halbert goes on to explain and show in a spreadsheet. Add taxes and you’d need to earn $25 an hour just to hit that $3,285 range, after taxes have been deducted from your salary.
“So that gives you very limited options,” Halbert says.
“Either you have to kill yourself working, way too many hours, or you have to find a way to make a ton of money. And also keep in mind that these expenses take into account doing nothing. No free time, no going out to eat, no extra miles on the car, nothing.
Experts disagree on how to handle it
Halbert’s video sparked significant discussion among viewers, who quickly shared the video, which now has over 1.4 million views. Halbert discusses some of the answers, like making cuts to try to control your costs. This can include your streaming services, cable, internet, cell phone, and other expensive recurring costs.
But Halbert goes on to say that’s not a real solution. And he adds that you will never be able to put about $200 more in your pocket, adding “it will never increase, so you have to increase your income. It is imperative.”
This crisis only seems to be getting worse, according to the US Bureau of Labor Statistics. Current employment statistics for October 2022 showed that real average hourly earnings fell by 2.8% compared to October 2021.
In addition, unemployment is up 3.7% for October.
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Halbert suggests that hustle and bustle on the work side isn’t going to create enough income, especially if you want to retire one day. Instead, he’s going to invest – he says it’s the only way.
But if you ask the numbers behind The Ramsey Show YouTube channel, it’s certainly not the only way.
“It’s absolute nonsense,” commented Ken Coleman, career coach at The Ramsey Show.
Coleman, joined by Ramsey Show co-host George Kamel, admitted that while they realize many Americans feel this way, it’s just plain inaccurate. They specifically pointed out that the average used car payment was closer to $700, but also that the average rent would be closer to $1,659 only in the most expensive cities.
This path doesn’t have to be permanent
They gave Halbert a few points, including that Americans continue to hand over their “hard-earned money” to lenders.
“They think, ‘Well, this is the way, this is how I get financial freedom, this is what success looks like.’ But we don’t teach no debt. Pay for things with cash, get reasonable used cars. So that’s a big part of why there’s no margin in the budget of this nobody,” said George Kamel.
But where the couple really had a problem was that the only solution was to “commit suicide while working” or accept that fate. That’s because what Halbert doesn’t cover in his videos are real cost-cutting solutions. For example, the couple thinks you shouldn’t pay $1,659 in rent as a single person.
Instead, they suggest you find at least one roommate to cut costs in half. Or sell that car you can’t afford, Kamel suggested.
Ultimately, Coleman says, these are usually simply periods in your life that you have to go through on your path to financial freedom.
“It’s not a sentence. It’s a season of your life, but it’s not a life sentence.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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