4 Signs You Are Underemployed


While most people have heard of the term unemployed and it’s fairly easy to figure that one out, most people are strangers to the concept of underemployment. Regardless, underemployment is a cold, hard reality in the United States and in many other countries. Underemployment is defined as being employed but not making enough money to earn your desired standard of living.

In short, there is some sort of psychological deficit between the life that you’re living, the amount of income that is paying for your lifestyle, and the lifestyle that you want. Of course, we’re not talking about people dreaming about living like Donald Trump. We’re talking about people who just want to live a basic and decent middle class existence, but they don’t have the means to do so. This leads to a lot of frustration, also a feeling of constant financial tightness.

If you see these signs, then it’s a good idea to start looking at your options. Either increase your income by working online, taking sideline jobs, working a second job, or decrease your expenses. Either way, doing so would decrease the personal financial tightness, frustrations, and anxieties that you’re feeling.

Here are the top four signs that you are underemployed.

1. You tend to pay your rent or mortgage late

If you are underemployed, one of the biggest signs you should look for is the fact that you can’t pay your mortgage or rent on time. This happens because it seems that other expenses pop up at the most unfortunate time, and take up some or almost half of the money that should go towards paying your mortgage or rent. This is a serious problem because for most middle class Americans, housing cost is the biggest expense item at the end of every month. So if you are having a tough time covering your housing expenses, this is a serious sign that you may be underemployed.

2. You never have any money left over

If after paying all your expenses and your liabilities, you end up with no money to watch the movies or go out to dinner, chances are you are underemployed. You basically just have enough to cover your living expenses. Many people are okay with this. However, if you dream of a better financial life and a more comfortable life, this can be quite a grueling ordeal. Financially, you may be okay because you’re just breaking even. But there are a lot of anxieties and frustrations when you don’t have any money left over because emergencies pop up all the time. You don’’t want to get sick, or have a loved one get sick, and then have that situation drive you into a credit hole.

3. You don’’t have enough to cover month’ly expenses

If you are the type of person that pays the rent or the mortgage first, then congratulations to you; you resisted the urge to have your expenses eat up the biggest payment you need to make on a monthly basis. With that said, if after you’’ve made all the payments you don’t have enough money to cover your monthly expenses, this is a serious sign that you are underemployed. At this point, you need to choose whether to reduce your expenses or try to earn more money. Regardless, you are officially underemployed if you are constantly having to push off expenses from one month to the next.

4. You can never pay off credit cards

If you notice that you are constantly unable to pay off your credit cards, this is a big sign that you are underemployed. Credit cards weren’’t meant to extend your income or give you free money. This isn’t free money. You have to pay it off. Unfortunately, this is debt that increases every single month because of high interest rates, and the longer it takes you to pay this off, the higher your cost would be over the long haul. It’s a big sign that you’re underemployed when you can never pay off your credit cards.

Again, the solution to this is to cut down on your expenses so you can free up some resources to pay off your credit cards eventually. The sooner you knock off your credit card debt, the better.


Anum Yoon is the founder and editor of Current on Currency. She loves all things personal finance, which is why you'll find her work all over the PF blogosphere.