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Two-thirds of Americans have a negative view about tipping, according to a recent Bankrate report, particularly when it comes to contactless and digital payment prompts with options that can range from 15% to 35% for each transaction.
While tipping 20% at a sit-down restaurant is still the standard, most people leave less for carry out, if anything at all.
Here’s how much the experts tip.

Thanks to “tipflation,” a 20% gratuity isn’t what it used to be.
With more opportunities to tip and predetermined point-of-sale options that now range from 15% to 35% for each transaction, tip expectations are growing, whether consumers like it or not.

And most don’t: Two-thirds of Americans have a negative view about tipping, according to a recent report by Bankrate, particularly when it comes to the contactless and digital payment prompts that have popped up nearly everywhere since the Covid pandemic. The trend is also referred to as “tip fatigue.”
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“Sometimes you tip to reward good service, but only at restaurants do I tip out of obligation,” said Michael Lynn, a professor of consumer behavior and marketing at the Cornell University School of Hotel Administration.
Otherwise, it depends, Lynn said. “I don’t tip for carry out or counter service,” he added. “I don’t tip the Amazon delivery guy but I do tip the pizza delivery guy.”
Tipping 20% at a sit-down restaurant is still the standard, most etiquette experts say. But there’s less consensus about gratuity for a carryout coffee or other transactions that didn’t involve a tip at all in the past.

While tipping at full-service restaurants has held steady, tips at quick-service restaurants by guests fell to a five-year low of 16.7% at the start of 2023, according to Toast’s most recent restaurant trends report.
These days, fewer consumers also said they “always” tip when dining out compared with last year, according to Bankrate, or for other services, such as ride-hailing services, haircuts, food delivery, housekeeping and home repairs.
“It’s still OK not to tip,” according to Jaime Peters, Maryville University’s assistant dean of accounting, finance and economics. “It really is a tip; it is not obligatory.”
Peters said she primarily tips 20% in a sit-down restaurant, but less for other transactions.

Some workers rely on tips

In most other countries, “tipping remains a small gesture of gratitude,” Peters said.
But in the U.S., tips make up a larger part of workers’ pay, particularly in industries like entertainment, food service, and leisure and hospitality.  
In some of those jobs, workers make less than minimum wage because they are considered “tipped employees.”
Under federal law, employers can pay workers as little as $2.13 per hour — much less than the minimum wage — if the tips they receive bring them up to a baseline salary. (Some states are now increasing the hourly minimum wage for tipped employees or eliminated tipping wages altogether.)

This applies primarily to restaurant workers, although other employees who receive more than $30 a month in tips may qualify.
“Recognize that many service industry workers heavily rely on tips to make a living,” said Heather Altepeter, CEO of National Merchants Association.
“While tipping fatigue can be a concern, consider the livelihood of these workers who depend on gratuities for their income.”
For these workers, tips can boost wages by about 25%, according to data from payroll platform Gusto.
“Tips play a significant role in compensation, although it can vary quite a bit,” said Luke Pardue, an economist at Gusto. 
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Life Changes

Some three-quarters, or 75%, of Gen Z and millennial couples say it’s too expensive to get married in the current economy, according to a survey.
While the cost of the average wedding has reached $30,000, some couples do manage to wed for less.
Nowadays, with couples funding almost half of wedding costs themselves, many are more mindful and intentional with their decision-making. 

Peopleimages | Istock | Getty Images

While many young couples may hope to tie the knot one day, some are spooked by high costs. 
Some three-quarters, or 75%, of Gen Z and millennial couples said it’s too expensive to get married in the current economy, according to a survey by the Thriving Center of Psychology. The center polled 906 unmarried Gen Z and millennial pairs in June.

The cost of the average wedding reached $30,000 last year due to steep inflation, per an annual study by The Knot — that’s up $2,000 from 2021.
Gen Z recognizes that weddings are expensive, but the majority, or 66%, say it will be worth the cost, The Knot found in forthcoming research.
However, some couples have been able to wed for a lot less. 
Janet Counts from Front Royal, Virginia, and her husband Brian spent less than $15,000 on their wedding a year and a half ago. 

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“It’s really important for couples to figure out what they want out of a wedding,” said Counts, who is in her 30s. They wed on Feb. 12, 2022, the anniversary of the day they first met. 

Traditions are evolving and more couples are comfortable with smaller, more intimate weddings as they finance the events themselves, said Jason Rhee, a wedding planner based in California. 
Here are ways couples can save on expenses.

Prioritize what is important to you

As recently as a decade ago, parents and in-laws often still pooled funds to pay for a wedding. Nowadays, with couples funding almost half of wedding costs themselves, many are more mindful and intentional with their decision-making. 
Engaged couples should be realistic and have conversations about what the wedding will look like, said Rhee. Be honest about your budget and save money on things that don’t matter as much to you. 
“Prioritize what is important to you,” said Rhee. “Save yourself $1,000 on the cake to give yourself the dream photographer, the venue that you love or the extra 30 minutes at the bar.”

For instance, the Counts prioritized investing in quality food and an open bar, a DJ and photographer, plus a shuttle service for their guests, along with Janet’s bridal gown.
Meanwhile, they were frugal when it came to other areas of the day. While the bride and her bridesmaids held fresh flower bouquets, the couple used artificial flowers purchased at a craft store as decorations and centerpieces. 
If you have no idea what your budget should be, list the elements that you like and start to do the math on what a spending plan would look like, advised Rhee.

‘Be more intentional’ with invitations

Ольга Носова | Istock | Getty Images

The fewer people you invite to your wedding, the more resources you will have for the party, said Rhee.
Couples used to be more welcoming about guests bringing plus-ones or children to receptions, but that is changing. They are being more intentional about who they want to share their day with, added Rhee.
The Counts chose to have an intimate wedding and limited their guest list to 90 people. They were therefore able to splurge on catering, which ended up being the most expensive part of their wedding, ringing up at about $45 per person. 

Be open to new ideas, changes 

Couples should understand that images they see on professional wedding sites should be taken as inspiration and ideas, and not set in stone. 
“Be open to understanding that styles and inspirations are there as suggested forms of ideas, but similar to everything else in your life you’re doing within a budget, you have to understand that there has to be some sort of flexibility,” said Rhee. 

Some couples are leaning into the proverbial “something borrowed” and seriously consider renting over buying, especially when it comes to flowers, fine jewelry and even their bridal dresses.
“This next generation of brides is thinking about experiences over possessions,” said Miriam Williams, co-founder of Atlanta bridal rental company Laine London. “It’s only natural that they’re rethinking what their wedding day might look like.”
Additionally, consider vendors newer in the wedding space, as they tend to offer lower rates. 
“The reason they’re cheaper is because they’re newer, and the reason you’re paying more money [for established vendors] is because that person has more experience,” added Rhee. More

The confluence of changing gender norms, popularity of payment apps and the economic climate tightening people’s budgets is making the already fraught first date a little more tense.
Some women say they’ve had a date ask for his money back after they explained they didn’t want to go out again.

Koron | Moment | Getty Images

Samantha Costanza went on a first date with a man she’d met on a dating app in January 2022.
They got to know each other as they both sipped on hot cider because of the cold at the Brooklyn, New York, bar where they’d agreed to meet. When it was time to pay for the drinks, Costanza’s date handed his credit card to the bartender.

A few days later, he messaged that he’d like to see her again. Costanza didn’t feel the same.
“I spent over an hour crafting a very polite reply that assured him I had a lovely time but just did not see a future connection,” said Costanza, 29, a customer operations analyst.
In response, the man asked Costanza if she could Venmo him back payment for her drinks.
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“I was in complete shock,” she said. “It made it seem like the only reason he would offer to pay for my drinks was that he expected something from me.”

Relationship and etiquette experts say the confluence of changing gender norms, popularity of payment apps and the economic climate tightening people’s budgets is making the already fraught first date a little more tense.
One symptom may be more awkwardness around how the tab is handled, in the moment and after the fact. Like Costanza, some women say they’ve had a male date ask for his money back after they explained they didn’t want to go out again.
“We are culturally moving into a dating environment that we’re all unfamiliar in,” said New York-based psychotherapist Carli Blau.

Toxic behaviors in online dating apps

The requests for money back after a disappointing date are a symptom of a much bigger problem with modern dating, said Jon Birger, author of “Date-onomics: How Dating Became a Lopsided Numbers Game.”
These situations would be much less likely to occur on a first date involving two people set up by a mutual friend or a family member, he said.
“It’s a byproduct of the awfulness and toxicity of online dating, where every first date is a blind date with a complete stranger,” Birger said. “There’s zero social accountability, which makes it easier for people to behave badly.”
Dating coach Blaine Anderson said a money request after a date is among the biggest taboos.
“Venmo-requesting a woman to split your first date if she doesn’t agree to a second date is pathetic and unethical,” Anderson said.

When men, in particular, ask for their money back, it can underscore the uncomfortable feeling women can get that their covered dinner came with expectations.
“The man considered the cost of that first date an investment, and that investment did not pan out,” said dating app expert Irina Manta, co-host of the podcast Strangers on the Internet.
Erin, a single 40-something in Pennsylvania who asked to use her first name only, felt unsettled when her date later asked for a refund.
After their first dinner together, she knew she wasn’t going to see him again because of his political views. When their check came, she offered to pay her portion but he insisted on covering the full bill.
But then, the next day, when she explained that she didn’t want to see him again, he asked her to Venmo him $30.

There’s zero social accountability, which makes it easier for people to behave badly.

Jon Birger

“It really did feel very off-putting,” said Erin. “It really underscores some kind of sense of entitlement on his part.”
Although many find the expectation that men pay for the first tab old-fashioned, others see it as a kind gesture or a way to show interest.
Costanza said she would have been a bit put off if her date hadn’t at least offered to pay.
“Each drink cost $10, so a total of $20 to cover me on a first date seemed like an expected and polite gesture to show his interest,” she said.

How the economy is taking a toll 

On the other hand, it’s important to consider the economy as a backdrop, said psychotherapist Blau.
Wage stagnation and inflation have left many people feeling squeezed, and dating can be very expensive. Americans spend nearly $700 on dates annually, with the average man spending the most — around $860, according to a 2020 report by LendingTree.
The average cost of a full dinner and a movie across major cities in the U.S. can cost around $159, according to a more recent analysis by MoneyGeek, conducted in 2023.

“That can be really hefty when we’re talking about an economy where people are struggling to pay their rent,” Blau said.
As a result, Blau saw the refund requests a little differently.
“Is it really that they had a bad intention [or] is it that they really couldn’t afford it?” she said.

What to do if it happens to you

Westend61 | Westend61 | Getty Images

If you receive a request from someone after your date, experts say there are pros and cons whether you ignore or pay it.
Ignoring the request sends the message that it was inappropriate, while paying it could be the fastest way to cut ties and never interact again, said Anderson.
Meanwhile, if you intend to request a refund from someone after a date, you may want to reconsider. It’s better to ask to split the bill from the beginning and make your boundaries clear, said Blau.
If getting the money back will help your finances or make you feel better about being rejected, “it’s your right to ask,” she said. 

“It’s also their right to say no,” Blau added.
That’s basically what Costanza did. She ignored the request, and promptly blocked him.
“My time and energy is not refundable,” she said. More

Life Changes

At some private universities, the total cost of college is now more than $80,000 a year.
Overall, the combined income and savings of the average student and their parents can pay for about half of college costs, according to a new report by Sallie Mae.
It’s still possible to appeal for more financial aid for this academic year.

The average sticker price for college, or published costs for tuition and fees, has been rising — but most families don’t pay full price.
Tuition, fees and room and board — plus books and supplies, transportation and personal expenses — total an average $27,940 at a four-year, in-state public college for the 2022-23 school year, according to the College Board, which tracks trends in college pricing and financial aid. 

In total, the equivalent annual cost for a four-year private college is $57,570 on average. At some private universities, the total cost of college is more than $80,000 a year.

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Yet, a new report from Sallie Mae finds the amount families actually spent on education costs last year was $28,026 on average, up 11% from the year before. 
Families took out loans and borrowed money to cover about 21% of the costs. About 29% of college costs were covered by scholarships and grants, while the students’ and parents’ income and savings covered about half, according to the report.
As the mother of a first-year college student and a junior, too, I know that thinking about college bills is daunting. Here are three strategies that can help you pay for college now and save for rising costs in the future.

1. Tap college savings accounts as much as possible 

Gerville | Istock | Getty Images

Saving as early as possible in state-sponsored, tax-advantaged 529 savings accounts lets your savings grow tax-free, as long as the money is spent on qualified educational expenses. Last year, about 30% of parents used college savings plans such as 529 plans to pay for about $7,800 of college costs, on average, according to the Sallie Mae report.

Money in 529 plans can be used tax-free for most education expenses, including tuition, room and board, books, computers and supplies at most two- and four-year colleges as well as technical, vocational and graduate schools. 
“The benefits may outweigh any future reduction in aid,” said Adam Nguyen, founder of Ivy Link, a college admissions advising firm. “Benefits include the wide variety of education expenses that the funds could be used for.”

Starting in 2024, unused funds in 529s [can] be rolled into Roth IRAs, subject to certain exclusions.

Adam Nguyen
founder of Ivy Link

The 529 plan money also can be used to pay for up to $10,000 a year in K-12 tuition for primary or secondary public, private and religious schools, and even homeschooling. 
“Moreover, starting in 2024, unused funds in 529s [can] be rolled into Roth IRAs, subject to certain exclusions,” Nguyen said, referring to a provision in a new federal law that passed last year.
If college is more than a decade away for your child or they’re getting close to the finish line in high school, there are college calculators online that can help you figure out how much you need to save in a 529 plan each month to pay for all or part of college costs at an in-state or out-of-state public institution or private college or university. 

2. Leverage private scholarships

Merit-based aid can cover a significant part of college costs. About 60% of students received scholarships last year and those awards averaged $8,200, according to Sallie Mae. 
“For high school juniors and seniors, now is the time to continue to focus on your coursework — the rigor of your courses, as well as how you’re doing in them,” said Rob Franek, editor in chief of The Princeton Review, a test prep, tutoring and college admissions services company. “Those courses, along with SAT and ACT scores, unlock admission and scholarship dollars for the majority of schools.”

There are more than 1.7 million private scholarships and fellowships available, often funded by foundations, corporations and other independent organizations, with a total value of more than $7.4 billion, according to higher education expert Mark Kantrowitz. 
Check with the college, high school counselors and local nonprofits for potential scholarships. Also, search websites such as Scholarships.com, Fastweb.com and the College Board’s Big Future site. 
You could try to negotiate for more merit aid if you got more money from another school. “The outcome will be highly dependent upon factors like your academic caliber and other offers you might have received from colleges of a similar standing,” Nguyen said, adding that ideally, “this should be done before you accept your offer to attend.” 

3. Appeal for more financial aid

It’s down to the wire for the coming academic year, as many college students may have already started classes, but it may not be too late to appeal for more financial aid. 
For families who remain concerned about making ends meet based on the financial aid award they’ve received, it is possible to ask the college financial aid office for more aid. Aid for the 2023-24 academic year is based on 2021 income. If your circumstances are now different, that should be brought to the financial aid office’s attention.
If you’ve experienced a change in your financial situation, such as a job loss or a disability, contact the college’s financial aid office and send an appeal letter. Check out free templates online that can help you write it.

“This is still a time given a family’s financial situation, if things have changed dramatically from even just a few months ago, without question I would reach out to the admission and financial aid team,” Franek said. 
If you didn’t apply for financial aid this year, it’s also not too late. Students miss out on billions of dollars in federal grants because they don’t fill out the Free Application for Federal Student Aid. Some schools may also require you to fill out the CSS profile on the College Board website to get access to nonfederal institutional aid. You have until June 30, 2024, to submit a FAFSA form for the 2023-24 school year. 
Since the FAFSA is for a single academic year, you have to submit this form every year. The U.S. Department of Education says a revised FAFSA for the 2024-25 school year will be available in December of this year. 
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For many Americans, payday can’t come soon enough. As of June, 61% of adults are living paycheck to paycheck, according to a LendingClub report. In other words, they rely on those regular paychecks to meet essential living expenses, with little to no money left over.
Almost three-quarters, 72%, of Americans say they aren’t financially secure given their current financial standing, and more than a quarter said they will likely never be financially secure, according to a survey by Bankrate.

“There are actually millions of people struggling,” said Ida Rademacher, vice president at the Aspen Institute. “It’s not something that people want to talk about, but if you were in a place where your financial security feels superprecarious, you’re not alone.”
This struggle is nothing new. Principal Financial Group found in 2010 that 75% of workers were concerned about their financial futures. What’s more, since 1979, wages for the bottom 90% of earners had grown just 15%, compared with 138% for the top 1%, according to a 2015 Economic Policy Institute report. But there’s now a renewed focus on wage-earner anxiety amid higher inflation and rising interest rates.
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The typical worker takes home $3,308 per month after taxes and benefits, based on the latest data from the U.S. Bureau of Labor Statistics. But when you take a look at the cost of some of the most essential expenses today, it’s easy to see why consumers feel strained.
The median monthly rent in the U.S. was $2,029 as of June, according to Redfin. That amount already accounts for about 61% of the median take-home pay.

Meanwhile, the Council for Community and Economic Research reported that the median mortgage payment for a 2,400-square-foot house was $1,957 per month during the first quarter of 2023, which accounts for about 59% of the median take-home pay.
“Inflation is really hurting individuals having stability in their housing,” said certified financial planner Kamila Elliott, co-founder and CEO of Collective Wealth Partners in Atlanta. She is a member of CNBC’s Financial Advisor Council. “If you have uncertainty in your housing, it causes uncertainty everywhere.”

Combine that with the average $690.75 Americans spend each month on food and out-of-pocket health expenditures that cost the average American $96.42 monthly, and you get a total expense of $2,816.17 for renters and $2,744.17 for homeowners.
That amount already accounts for just over 85% of the median take-home pay for average American renters and almost 83% for an average homeowner. This is excluding other essential expenses such as transportation, child care and debt payments.
“So much of managing your financial life in America today is like drinking from a firehose that many households are not able to show up and impose a framework of their own design onto their finances,” said Rademacher. “Many are still in this reactionary space where they’re just trying to figure out how to make ends meet.”
Watch the video to learn more about why financial security feels so impossible in the U.S. today. More

As Maui is devastated by wildfires, many may wonder how they can help.
Here’s what experts say to keep in mind if you want to donate.

Donated clothes for those affected by the Maui fires are stored at Honokowai Beach Park in western Maui, Hawaii, Aug. 14, 2023.
Yuki Iwamura | Afp | Getty Images

As the Hawaiian island of Maui struggles to recover from the deadliest wildfire in modern U.S. history, many Americans are asking, “How can I help?”
American households tend to give $80 per year to disaster relief, according to the Center for Disaster Philanthropy, a charity organization, with about one-third of American households donating to these events.

That adds up to about $3 billion per year from Americans’ pockets for both domestic and global disasters, according to Tanya Gulliver-Garcia, director of learning and partnerships at the Center for Disaster Philanthropy.

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“It is a lot, and at the same time, it’s never enough,” Gulliver-Garcia said.
The generosity shown by many in the immediate aftermath of the fire that ignited Aug. 8 has shown “the aloha spirit is alive and well throughout Hawaii and far beyond our waters,” said Kaleialoha “Kalei” Cadinha-Pua’a, president and CEO of Cadinha & Co., a Honolulu-based registered investment advisor.
“The outpouring of love and support has been critical to help the people of Maui heal and provides much-needed hope during this inexplainable time of sadness,” Cadinha-Pua’a said.

For those who are interested in helping with the recovery, experts say there are several tips to keep in mind.

1. Send money, not stuff

When it comes to donations, it may be tempting to send clothing and other items you no longer need. But that may not end up doing as much good as you hope, experts say.
“Sending stuff is causing problems in Hawaii,” Gulliver-Garcia said.
Shipping containers are clogging up Honolulu’s port, she said, and require people to go through them.

Monetary gifts provide the most flexibility to families displaced by the wildfires.

Kaleialoha Cadinha-Pua’a
president and CEO of Cadinha & Co.

Finding the help to accomplish that task amid the disaster is difficult, Gulliver-Garcia said. Moreover, what is being sent often doesn’t meet the immediate needs.
Instead, donating money may help victims decide what they need most.
“Monetary gifts provide the most flexibility to families displaced by the wildfires,” Cadinha-Pua’a said.
By selling items you don’t need rather than donating those items, you may be able to raise funds to contribute, Gulliver-Garcia suggested.

2. Remember recovery will be long term

Typically, about 80% of individual donations go out in the first five to six days after a disaster, according to Gulliver-Garcia. Since the Hawaii disaster is likely to stay in the news for longer, that timeline may be a bit longer, she said.
However, the recovery from such a large disaster will take years.

Other U.S. areas affected by recent disasters, including parts of Kentucky affected by flooding and areas of Texas struck by Hurricane Harvey, still need assistance, Gulliver-Garcia noted. Moreover, 18 years after Hurricane Katrina, some parts of Louisiana are still in the process of being rebuilt, she said.
“Even next year or the year after when you’re thinking about, ‘How am I going to give out money to help with disasters?,’ remember that past disasters in many ways are just as important as current disasters,” Gulliver-Garcia said.

3. Choose your charity wisely

When it comes to donating, choosing trusted, well-known charities should be a priority, Hawaii Attorney General Anne Lopez recently said in response to the tragedy.
To help with the immediate response, the Red Cross and Salvation Army are the prominent organizations on the ground right now, Gulliver-Garcia noted.

4. Beware of scams

Unfortunately, when big-headline disasters arise, scammers may try to solicit donations.
“In moments of crisis, we all must be extra vigilant against bad actors who try to take advantage of people’s good will,” Lopez said, in a recent statement.
If an organization is very insistent that you make a donation over the phone, it would be wise to hesitate, Gulliver-Garcia said.

In moments of crisis, we all must be extra vigilant against bad actors who try to take advantage of people’s good will.

Anne Lopez
Hawaii Attorney General

Other red flags include demanding a cash or gift card donation, using false names that sound like real charities or giving no specifics on how the money will be used.
Before committing to donate, look at an organization’s website and its financial information to see how much may go toward fundraising costs versus charitable endeavors, Gulliver-Garcia suggested.
If you’re tempted to give directly to a GoFundMe campaign, be sure to check that it has been verified by the platform, she said.
The website Charity Navigator can help provide more information on a charity’s activities. In addition, the IRS also offers a tool to search whether an organization is eligible to receive tax-deductible contributions. More

There’s a lot of speculation about whether a recession is still on the horizon.
Some economists say the country is already experiencing a “richcession,” rather than a broad contraction to come later.
Layoffs have been largely limited to white-collar jobs while the unemployment rate, as a whole, remains near 50-year lows.

A ‘richcession’ may be underway

“In most recessions, unemployment rises more for lower-income groups,” said Tomas Philipson, a professor of public policy studies at the University of Chicago and former acting chair of the White House Council of Economic Advisers.

“Although we are not in an overall recession yet, the demand for and wages of lower-income groups are outpacing higher-income groups.”

Maskot | Digitalvision | Getty Images

The start of the year was plagued by waves of layoffs: Employers announced plans to cut 481,906 jobs in the first seven months, up 203% from the 159,021 cuts for the year-earlier period, according to Challenger, Gray & Christmas, a global outplacement and business and executive coaching firm.
Some sectors, such as banking and tech, have been particularly hard hit, and a series of Wall Street layoffs earlier this summer fueled fears that a recession still looms driven by those professional job losses.
But there still aren’t enough workers to fill open positions in the service industry and the unemployment rate remains near a 50-year low at just 3.5%. 

What a ‘richcession’ means for consumers

“Recession is a loaded term,” said Jacob Channel, senior economist at LendingTree. “White-collar jobs might not be as plentiful as they were last year, but they’re still around.”
And “at the end of the day, even if white-collar hiring does appear to be on the decline, that doesn’t mean that the entire economy as a whole is struggling,” Channel said.
“On the contrary, most current data indicates that despite numerous headwinds, the broader economy is doing remarkably well, all things considered,” he added.
But regardless of the country’s economic standing, many Americans are feeling the pain of higher prices and most have exhausted their savings and are now leaning on credit cards to make ends meet.

Several reports show financial well-being is deteriorating. Rather than a “richcession,” this more closely resembles a so-called K-shaped recovery, said Greg McBride, Bankrate.com’s chief financial analyst.
Wealthy Americans aren’t exactly suffering, but credit card debt is at an all-time high and 61% of adults are living paycheck to paycheck. “Those are signs of financial strain,” he said.
However this economic period is ultimately defined, it will only be in hindsight, McBride said. “Typically, by the time a recession is declared, the recovery is underway.”
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Life Changes

Alarmingly, as graduate school borrowing increases, wages for those with an advanced degree haven’t changed much, a new report by the U.S. Department of Education finds.
“A closer look at borrowing trends and the outcomes of graduate programs … suggest cause for concern,” department economists wrote.
Those with graduate degrees tend to earn more than those who stopped their education after college.

Gatot Adriansyah | Istock | Getty Images

The share of federal education debt going to graduate students is at its highest point in history, a new report by the U.S. Department of Education finds.
Alarmingly, as graduate school borrowing increases, wages for those with an advanced degree haven’t risen nearly as much.

“A closer look at borrowing trends and the outcomes of graduate programs … suggest cause for concern,” department economists wrote.
“There is generally very little correspondence between the amount students borrow to finance their advanced degrees and their labor market outcomes,” they said.

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In 2006, the Education Department introduced the Grad PLUS loan program, which lets graduate students borrow as much as it costs to attend their program. Meanwhile, the most an undergraduate can borrow in government loans in an academic year is typically $12,500.
In its new report, the department analyzed debt and earning outcomes at about 5,300 graduate programs. It found that between 2000 and 2016, the share of graduate students who borrowed more than $80,000 to pay for their degree was almost 11% in 2016, up from just 1.4% in 2000.
On average, graduate students with debt in 2016 borrowed about $66,000 in total to finance their advanced degree, up from roughly $53,000 in 2000.

“If these trends continue, graduate loan disbursements may exceed undergraduate disbursements in the next few years,” the department economists wrote.

Earnings haven’t kept up with debt levels

Those with graduate degrees tend to earn more than those who stopped their education after college.
In 2022, workers age 25 and older with only a bachelor’s degree had median weekly earnings of $1,432, compared with $1,661 for those with a master’s degree, according to the U.S. Bureau of Labor Statistics.
Still, as graduate debt has shot up, “the earnings premium for graduate degrees has stagnated or decreased,” said higher education expert Mark Kantrowitz.

The earnings premium is the difference in average income between people with different levels of college education, as well as high school graduates, after adjusting for several variables, including race and location.
The Education Department found that the earnings premium for those with a master’s degree has stayed between 55% and 63% over the past several decades, suggesting the “net returns of graduate degrees may have fallen over the past 20 years.”
“This is causing more graduate and professional school students to have trouble repaying their student debt,” Kantrowitz said. More