Above the poverty line but struggling? Millions feel one emergency away from a financial crisis

(Ivanhoe Newswire) --- Talks of recession, high prices, and layoffs have left many Americans on edge. But here’s what may surprise you: financial stress is hitting people who aren’t even considered “poor.”

Rent, mortgage, food, electricity, school, it all adds up. So how much money does a family of four need to avoid poverty?

According to the U.S. Census Bureau, a family of two adults and two children is officially “above poverty” at just 32,649 a year.

“When you think about the pure poverty line, it would be very difficult to live a normal, what you would say as a normal life if you were just making the federal poverty amount,” said Joel Garris, President of Nelson Financial Planning.

Millions of people earn more than the poverty line but still feel one emergency away from financial disaster. Psychologists call it peniaphobia, a growing fear of running out of money.

“The emotional impact that has of constantly worrying about money certainly takes us a toll. It takes a toll on our health,” explained Garris.

What can you do? Take a frank look at your finances and separate needs from wants.

“Generally, the rule of thumb is to have 30 percent of your income for those wants,” said Garris.

Next, take emotion out of money. Set up automatic transfers to savings and automatic bill pay. Third, build what experts call a financial shock absorber. This isn’t a big emergency fund yet; it’s a small, quick-access cushion. Fourth, start small with saving. Garris suggests trying to save five to six percent of what you spent last month. The numbers may be small, but they add up fast.

And it’s not just young people feeling financial stress. For many older Americans, surveys show a growing number of adults over 50 are relying on credit cards just to cover everyday expenses. Many say that debt is making it harder to save, and some expect it could take years to pay it off.

Experts say that for seniors living on fixed incomes, small, unexpected costs can quickly push them into financial trouble.

Contributors to this news report include: Marcy Wilder, Producer; Bob Walko, Editor.

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