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Poll: One in four devoting half of their paychecks to rent

Posted On Thu, May 5, 2011

With the economy still sputtering along, many Americans are being forced to live paycheck to paycheck, and this may be because people are devoting so much of their earnings to rent.

According to a recent report from the Harvard Joint Center for Housing Studies, 10.1 million households - or what amounts to one in four renters - are spending more than half of their weekly paychecks on rent and utility bills. Twenty-six percent are spending slightly less, between 30 percent and 50 percent.

Eric Belsky, author of the study and managing director of the JCHS, said rent payments have been increasing well before the housing crisis.

"In the last decade, rental housing affordability problems went through the roof," said Belksy. "In real terms, it means more people have less money to spend on household necessities such as food, health care, or savings."

As Belsky alluded to, less discretionary income means more people may look to save money by purchasing less health insurance or home insurance than they would normally. However, doing so may put someone in significant financial jeopardy should a homeowner or family member have a serious illness or if one's house is badly damaged.

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