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Finances are a leading cause of stress, say 65% of Americans | News, Sports, Jobs
More than half (55%) of Americans say they would lose everything if there were a recession.
That’s according to Clever Real Estate’s latest personal finance survey. And this feeling isn’t just reserved for low-income Americans. This widespread issue affects individuals across all demographics, transcending age, income level, and geographic location.
In today’s fast-paced world, financial worries are a prevalent source of anxiety for millions of people.
From mounting debt and unexpected expenses to the complexities of managing day-to-day finances, the pressure to maintain financial stability is overwhelming. Unfortunately, little is done to help those who are struggling and educate them as well.
Rising costs present significant barriers
While inflation peaked in 2022, prices haven’t fallen enough for people to feel financially secure. A staggering 80% of Americans say the cost of living is their most significant stressor, with inflation coming in second at 73%.
The problem is that as costs rise, incomes don’t rise—or at least not at a level that keeps consumers above water.
Wages are a problem, with salaries remaining the same despite the high costs of basic necessities. Incomes simply do not meet the public’s needs. Making ends meet is getting harder; 56% of Americans report being underpaid.
For many, especially young Americans, homeownership seems bleak. Mortgage interest rates are at a 30-year high, and only those with a substantial amount of money saved are likely to own a home.
Cutting costs is often unrealistic
For those struggling financially, the cookie-cutter solution of cutting monthly expenses no longer works. Rising prices have forced 93% of Americans to make serious spending cuts in 2023, and 70% say paying basic expenses is a struggle. Nearly half (47%) of millennials struggle to afford housing, and 56% struggle to pay their bills.
Cutting back on spending is easier said than done. When consumers can’t afford to buy more than the essentials, cutting back means denying themselves necessities like food, health care, and housing. 44% of Americans admit to skipping meals to pay a bill. These legitimate needs are often the first areas cut when consumers can’t afford the basics.
Mounting debt with little hope of getting out of it
More than half of respondents (52%) said that if they lost their income, they would run out of money within 30 days. Nearly a third (29%) said it would take just a week or less. A quarter of respondents listed their net worth as zero or negative.
By 2023, nearly 40% of Americans will have sunk deeper into debt. An alarming 35% believe they will never overcome their debt. Credit card debt continues to be a growing problem among Americans, with 61% reporting that they owe an average of $5,875 on their credit cards.
Millennials owe the most, with an average balance of $6,794, followed by baby boomers with $5,143 outstanding. Of those who report credit card debt, 23% say they go into more debt each month.
Lack of retirement savings
About 37% of respondents say they have not saved anything for retirement. Those who do have money saved don’t have nearly enough, and 48% believe they will outlive their savings. But the problem is more complex than offering a retirement calculator to help people better estimate how much they need to save. Because of high prices and low wages, most people can’t afford to save money for their golden years.
Financial illiteracy poses problems
Nearly half of Americans (46%) believe that money management is more important than problem-solving, critical thinking and communication. However, 46% admit to being insecure because they lack adequate financial knowledge.
There is a lack of financial education, awareness and financial responsibility, as 28% do not know the interest rates on their credit cards and 21% do not know what a 401(k) is.
Ways to Improve Your Financial Situation
The economic climate is not favorable to consumers, and many believe it never will be. This doesn’t mean that people will never escape debt or pay for things beyond basic expenses, but they need to be smarter about it.
If cutting costs isn’t helping, they may follow the path some are taking and opt for a second job, but work-life balance is vital for mental health. Demanding work schedules negatively impact quality of life and overall well-being.
Finding good side hustle ideas is an option that works for many Americans. These gigs are usually outside of the standard 9-to-5 schedule and often have flexible hours. This flexibility means a person can choose when to work and when to relax.
The key is to learn to work smarter, not harder. Educate yourself to improve your financial literacy and plan to get on the right track. It may take some work, but it is possible.
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This article was produced by Media Decision and distributed by Wealth of Geeks.
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