If you are facing financial stress right now, you are not alone. According to a recent Ramsey Solutions study, 34% of survey respondents indicated that they were either facing financial struggles or were actively in crisis. That's a huge percentage of people -- more than one-third of all respondents -- who are not feeling good about their personal finances.
If you are one of those people, there are some options out there that could help you to get a better sense of control and get into a better place with your money. Here are some steps that you can take to try to get back on track.
Take advantage of the help that's available
If you are in the midst of a financial crisis, you may need some help to get out of it. And there's absolutely nothing wrong with that, as plenty of state and federal programs were created for just that reason.
Depending on your situation, you may be eligible to get help paying for food, housing, or medical insurance. You can use the Benefit Finder on USA.gov. Don't forget to check with your state's Social Service agency to explore programs available to you. Many of these programs are means-tested, so be prepared with paperwork like pay stubs or tax returns when you're trying to figure out what to qualify for.
Taking advantage of this assistance -- even on a temporary basis -- may give you the breathing room to make long-term positive changes that leave you with more money in your bank account.
Do something about your debt
If you are struggling, there's a good chance you have debt that's making your situation worse. After all, if you've committed future income to cover yesterday's expenses, it's going to be harder to make ends meet.
When you're in this situation, look into whether you can lower monthly payments and total repayment costs. Refinancing using a personal loan may be a good option if you have high-interest debt. This would involve getting a personal loan at a lower rate and using it to pay off existing creditors. Using a credit card balance transfer could be another option, as you can transfer the balance from current cards to a new card at 0% interest so you can make better progress on repayment. Note that you will need to have a fairly strong credit score to qualify for these options. And you should have a plan for repaying the debt while the 0% rate applies, as it will only be temporary.
You can also talk with your lenders about what they may be able to do for you, especially if you worry you won't be able to pay the bills. Often, they'll be willing to work out a payment plan for you if they fear not getting paid at all. You may want to ask, however, if the plan they work out will have an impact on your credit score. You may move forward with doing it anyway, but be aware this could make things harder in the long run if you hurt your credit.
Increase your income
Finding a way to earn a little more could go a very long way toward reducing your financial worries. And there are a ton of side gigs out there you could try out. The average earnings from side hustles come in at $483 per month, which is a good amount of money you could use to try to catch up on bills or pay down debt so you can eliminate some of your monthly obligations.
Think about what you're interested in and where your talents are. Could you walk dogs or baby sit or drive for a ride-hailing service or provide tutoring? There are apps and websites aplenty where you can connect with people that may be interested in hiring you for these tasks.
Reduce your fixed spending
Finally, you could try to reduce one of your fixed costs. This is a big, ongoing cost that you can take action once to reduce and that will make a long-term positive impact. For example, you could sell your expensive car (with the high car payment) and opt for a cheaper one and pocket the extra cash.
Making one big lifestyle shift like this can be a lot less stressful and a lot easier to maintain, so it could really help your financial struggles to lessen.
By taking any or all of these steps, perhaps you can get some financial relief so you can move out of the personal finance crisis and stress phase and start making solid progress toward a brighter future.
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FAQs
What are Americans' main financial challenges? Over the past two years, more respondents cited inflation as the reason for their financial difficulties than any other cause. Inflation reached a 40-year high of 9.1% in June 2022 and has yet to return to the Fed's target of 2%.
How much of the American population is financially struggling? ›
More than half of Americans (58%) report being able to live within their means and not worry about making ends meet, while fewer than half (40%) feel they are in good or great financial shape, and one in four (23%) say they are in poor shape.
What percentage of Americans have $1000 in savings? ›
Key Takeaways. More than one in four Americans (28%) have savings below $1,000. This is the case for 32% of Gen Zers, followed by Millennials at 31%, Gen X at 27% and Baby Boomers at 20%.
What are the main reasons Americans have financial problems? ›
Make sure you check out the linked resources that could help you prevent and/or eliminate a specific financial stressor.
- Too much debt/Not enough money to pay debts. ...
- Lack of money/Low wages. ...
- College expenses. ...
- Cost of owning/Renting a home. ...
- High cost of living/Inflation. ...
- Retirement savings. ...
- Taxes. ...
- Unemployment/Loss of Job.
5 Ways to Achieve Financial Security
- Start living on less than you make. No matter where you are on the road to financial security, your paycheck is the vehicle that's going to help you get there. ...
- Kiss your credit cards goodbye. ...
- Pay off your debt. ...
- Build up an emergency fund. ...
- Invest 15% of your income.
It may be that you have too much credit card debt, not enough income, or you overspend on unnecessary purchases when you feel stressed or anxious. Or perhaps, it's a combination of problems. Make a separate plan for each one.
What percent of Americans live paycheck to paycheck? ›
A 2023 survey conducted by Payroll.org highlighted that 78% of Americans live paycheck to paycheck, a 6% increase from the previous year. In other words, more than three-quarters of Americans struggle to save or invest after paying for their monthly expenses.
How much money is considered broke? ›
And 28% of millennials said they got to that point just by overspending on food. On average, people considered having only $878 available either in cash or a bank account to mean they've gone broke. It may not seem like a small sum, but it's 71.3% of the national average rent.
What are Americans cutting back on? ›
American shoppers also pulled back on purchases at furniture stores (-1.1%) and shops that sell building materials and garden equipment (-0.8%). Meanwhile, spending was the strongest at specialty stores that sell sporting goods, books, and musical instruments, which jumped by 2.8% last month.
What is considered living paycheck to paycheck? ›
Those living paycheck to paycheck devote their salaries predominantly to expenses. The phrase may also mean living with limited or no savings and refer to people who are at greater financial risk if they were suddenly unemployed or faced another financial emergency.
The average retirement savings for all families is $333,940, according to the 2022 Survey of Consumer Finances. The median retirement savings for all families is $87,000.
How much money does an average person have in their bank account? ›
The median savings account balance for all families in the U.S. was $8,000 in 2022. Generally, higher-income earners and older individuals save more than younger ones. Some experts suggest three to six months' living expenses as a goal.
Are Americans in trouble financially? ›
Americans Slightly More Optimistic Their Financial Situation Is Improving. There has been a slight increase in the percentage of Americans who say their financial situation is getting better -- 43% say this, up from 37% in both 2022 and 2023. The current figure is still significantly below the 52% measured in 2021.
Are people spending money in 2024? ›
However, an alternate measure of consumer confidence from the Conference Board tracked three consecutive months of decline in early 2024, to its lowest level since mid-2022. In 2024's first quarter, personal consumption expenditures represented nearly 68% of the nation's GDP.
What does the rule of 72 tell you? ›
The Rule of 72 is a calculation that estimates the number of years it takes to double your money at a specified rate of return. If, for example, your account earns 4 percent, divide 72 by 4 to get the number of years it will take for your money to double. In this case, 18 years.
What caused the US financial crisis? ›
The catalysts for the GFC were falling US house prices and a rising number of borrowers unable to repay their loans. House prices in the United States peaked around mid 2006, coinciding with a rapidly rising supply of newly built houses in some areas.
What is the wealth problem in the United States? ›
According to an analysis of Survey of Consumer Finances data from 2019 by the People's Policy Project, 79% of the country's wealth is owned by millionaires and billionaires. Also in 2019, PolitiFact reported that three people (less than the 400 reported in 2011) had more wealth than the bottom half of all Americans.
Are Americans getting into more debt? ›
During the first quarter of 2024, household debt and delinquency rates were on the rise, according to new data from the Federal Reserve Bank of New York.
What percentage of Americans make over 100k? ›
Over one-third of American families earn $100,000 or more
The U.S. Census Bureau found that 37.1% of U.S. households earned at least $100,000 in 2022. Here's a more detailed breakdown of six-figure income brackets and the percentage of households in each one: $100,000 to $149,999: 16.9%
