Yahoo Finance 7 Things You Must Do When You’re Struggling Financially
If you’re struggling with your finances, you’re not alone.
According to a recent survey by GOBankingRates, nearly 40% of Americans are having a tough time financially — with some even reporting that 2023 was their worst financial year ever.
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Unfortunately, the combination of high inflation, unaffordable housing and mass layoffs in certain industries has left many Americans trying to figure out how to stay afloat. We’ll review the details of the GOBankingRates survey and how Americans are reporting their financial health, and we’ll chat with a few financial experts on how to get your finances back on track if you’re struggling.
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9% of Americans Are In Dire Financial Straits
The recent GOBankingRates survey revealed that 28% of Americans reported to be struggling financially but still getting by. While they are getting by on a day-to-day basis, things are just plain hard right now.
But 9% of respondents said they are in the worst financial situation that they have ever been in. This comes after inflation recently peaked (at over 9% year over year). Additionally, interest rates for mortgages and car loans are sky-high, and wages aren’t keeping up.
What’s surprising is that the highest percentage of respondents in the worst financial situation they have ever been in were those aged 45 to 54. This means Gen X is feeling the economic impact of high rates, inflation and other factors more than any other generation.
Gen Z reported the lowest percentage of respondents who are struggling financially — giving younger generations hope that financial well-being could be on the rise.
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Ways To Save More Money If You’re Struggling Financially
If you’re struggling with your finances, it’s important to look at ways to save money.
Get on a Budget
If there seems to be more money going out than coming in every month, the best first step is to create a budget (or call it a “spending plan” if you hate the “B” word). The best way to approach this is to review your past spending, figure out where you’ve been spending and create a plan to change your spending habits.
This process takes time, and it requires regular reviewing of your spending habits. “Make checking your accounts a priority,” said Liz Hunter, commercial director at Money Expert. “This might be a weekly sit-down session where you review what you’ve spent and what you’ve got left to spend — or, if it feels more achievable — a quick balance check once per day.”
Negotiate Your Bills
If your regular bills have been increasing over time, that’s the effects of inflation at play. But you can save extra money by negotiating some of your bills lower. This may include calling your current provider and asking for a better deal — or shopping around to find a similar service at a better price. Negotiating your cellphone, internet, auto insurance and other bills can save you money every month going forward.
Try Meal Planning
If you find that you’re eating at restaurants too often or your grocery bill is ballooning too high, meal planning can help. Putting together a meal list before the week begins, shopping for deals on food staples and doing some meal prep on the weekends can help you cut down on your food budget and help you avoid eating out as often. The larger your family size, the more you can save with some intentional meal planning and shopping.
Cancel Unused Subscriptions
Every company seems to have a subscription service these days. From music to video to box services, it’s easy to sign up for something and completely forget it’s there.
If you want to save some money quickly, use a service like Rocket Money to connect your financial accounts and have it automatically find all your subscriptions for you. You can then quickly find ones you aren’t using, and Rocket Money will even cancel them for you.
This can help you save money and put it toward much more important financial priorities.
DIY
In the world of on-demand services, do-it-yourself, or DIY, isn’t a popular option these days. But if you want to save money and learn new skills at the same time, doing work on your own home or car can save thousands of dollars.
For car maintenance, changing your own oil or swapping out a bad radiator yourself can save you a lot of money. When it comes to your home, something simple like replacing a faulty water heater yourself can save hundreds and help you avoid the hassle of scheduling a repair tech.
Yes, it requires having a basic set of tools and the confidence of learning from YouTube tutorials, but DIY can save you a lot of money in the long run.
Increasing Your Income Can Help Too
In addition to saving more money by making your budget efficient, you can earn extra income on the side to help supplement your day job. There are several jobs that can quickly generate cash.
Driving services. Whether it’s Uber, Lyft or DoorDash, driving services allow you to quickly sign up and start earning money right away.
Freelance work. Whether you’re a graphic designer or a writer, using a platform like Fiverr can help you land freelance work and earn money as soon as it’s completed. This allows you to work from home too.
It may take some time to build up a side hustle, but you can learn new skills to start making money and help you save more. “It is essential to consider developing new skills or pursuing additional education to enhance your earning potential,” said Michael Benoit, owner of Contractor Bond. “This includes taking online courses or attending workshops related to your field of interest.”
Investing Can Grow Your Passive Income
Outside of saving money and earning more, it’s important to start investing. Even just a few dollars per paycheck can grow over time and make a meaningful difference in the future.
“I have found it necessary to educate yourself about investment options such as stocks, bonds, mutual funds or retirement accounts,” Benoit said. “My suggestion is to start small and gradually increase your investments as your income grows, such as through a 401(k) plan or investing in low-cost index funds such as ETFs.”
While it might seem overwhelming at first, there are some great platforms that help you invest with very little money. Robo-advisors like Wealthfront help you choose what to invest in and set up automatic deposits. This lets your money grow automatically with very little effort.
Or — if you’re just getting started — Acorns is a great app that rounds up your purchases and invests the spare change. This helps you set aside very small amounts automatically and start investing with your spare change.
Long term, investing is one of the keys to unlocking more financial freedom.
Methodology: GOBankingRates surveyed 1,039 Americans aged 18 and older from across the country between November 9 and November 13, 2023, asking 10 different questions: (1) How would you rate your financial well-being/situation at the end of 2023?; (2) How much do you want to realistically save in the next year?; (3) What types of investments are you considering for 2024? (Select all that apply); (4) Will you be in debt in 2024?; (5) Will you have an emergency fund going into 2024 and how many months will/would it cover?; (6) Which best describes your top financial goal for 2024?; (7) Are you planning for any of these major milestones in 2024? (select all that apply); (8) What is your top financial stressor heading into the new year?; (9) Are you planning for any major job changes in 2024?; and (10) What would you like to have happen the most in 2024? GOBankingRates used PureSpectrum’s survey platform to conduct the poll.
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This article originally appeared on GOBankingRates.com: 7 Things You Must Do When You’re Struggling Financially
