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Teresa Ghilarducci

Inflation Stings Most If You Earn Less Than $300K. Here's How to Deal.

More Americans than ever expect their finances to worsen as inflation hits a 40-year high. Do you really need that extra car?

Time for the bus? 

Time for the bus? 

Photographer: David Paul Morris/Bloomberg

If your income is more than $289,000 a year, the run-up in gas prices may be alarming — but it's unlikely to hammer your overall finances. After all, Americans at that level spend no more than 1% of their take-home pay on gas and oil, according to the Bureau of Labor Statistics.

For those earning much less, it’s a different story. Those at the median, with income of about $50,000, spend more than 3% of it on gas and motor oil. Low-income households making between $7,000 and $19,000 spend about 9%. The latest inflation numbers show gas prices jumped 6.6% in February from a month earlier — even before President Joe Biden banned U.S. imports of Russian oil.