As if we didn’t have enough to worry about. A recession, lasting through most of 2023, looks increasingly likely. 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, things will only get worse. If you’re making less than $25 an hour, in fact, he says, “you should be terrified.”
In a video that quickly went viral, Halbert brought down the average cost of living in America. And it is certainly terrifying. After adding together all the typical essentials, such as rent, groceries, gas and water, the average total cost was $3,285.37 per month.
Divided into a 40-hour work week, this means you need to be earning at least $20.50 an hour.
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However, what’s not included here is the tax, which Halbert goes on to explain and show in a spreadsheet. Add in taxes, and you’d have to make $25 an hour just to get into that $3,285 range, after taxes are deducted from your salary.
“So that gives you very limited options,” says Halbert.
“Either you have to kill yourself by working too many hours, or you have to find a way to make a lot of money. And also keep in mind that these expenses are factoring in doing nothing. No free time, no going out to eat, no extra miles in the car, nothing.
Experts disagree on how to handle it
Halbert’s video sparked a major discussion among viewers, who quickly shared the video, which now has more than 1.4 million views. Halbert discusses some of the answers, such as making cuts to try and keep costs in check. This could include your streaming services, cable, internet, cellular, and other expensive recurring costs.
But Halbert goes on to say that this is not a real solution. And he adds that you’ll only ever be able to put an extra $200 in your pocket, adding “that’s never going to go up, so you need to increase your income. It is a must.”
This crisis appears to be only getting worse, according to the US Bureau of Labor Statistics. Current employment statistics for October 2022 showed that real average hourly wages decreased by 2.8% from October 2021.
Also, unemployment is up to 3.7% for October.
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Halbert suggests that working with hustlers won’t create enough income, especially if you want to retire one day. Instead, he will invest – he says it’s the only way.
But if you ask for the figures behind The Ramsey Show YouTube channel, that’s hardly the only way.
“This is utter nonsense,” commented Ken Coleman, a career coach with The Ramsey Show.
Coleman, accompanied by The Ramsey Show co-host George Kamel, admitted that while they realize many Americans feel this way, it’s simply inaccurate. They specifically pointed out that the average used car payment was closer to $700, but also that the average rent would be close to $1,659 in just the most expensive cities.
This path does not have to be permanent
They did concede Halbert a few points, including that Americans continue to hand over their “hard-earned money” to lenders.
“They think, ‘Well, this is the path, this is how I get financial freedom, this is what success looks like.’ But we do not teach any debt. Pay things cash, get reasonable used cars. So that’s a big part of the picture of why there’s no headroom in this person’s budget,” said George Kamel.
But where the pair really had a problem was that the only solution was to “kill yourself by working” or accept this fate. That’s because what Halbert doesn’t cover in his videos are real cost-saving solutions. For example, the couple believes you shouldn’t be paying $1,659 in rent as a single person.
Instead, they suggest you find at least one roommate to cut the 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 need to overcome on your path to financial freedom.
“This is not a sentence. This is 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. Comes without warranty of any kind.