It isn’tuncommon to have financial worries at different seasons in life. For some, these worries may involve mounting student loan or credit card debt, and for others it could be monthly bills vs. their monthly income. And while occasional money worries are normal, how common is it to worry about money on a daily basis? Well, according to Varo Money, a mobile-banking company who recently completed a survey on the topic, around 30% of Americans deal with this reality every day.
The survey involved more than 1,000 adults in America, asking them how often they deal with financial stress. A high 85% stated that they feel this stress sometimes, and 30% shared they are constantly dealing with financial worry. And while many of these Americans surveyed were of varying age, you might be wondering what is the commonality they all share? For starters, lack of savings.
According to a GOBankingRates survey, as many as 69% of American have less than $1,000 in total savings, with a staggering 34% with zero savings. This is a large component of regular financial stress, as these men and women do not haveenough money in case of an emergency, medical issue, or loss of employment.
When working towards financial security, many strategies include putting money away until you have a three, six or nine month security savings blanket. While this will take some time to accumulate, there are ways to accomplish this goal, which we will get to in a minute. But first, let’s take a quick look at another financial stressor that has nothing to do with unexpected expenses; the Varo Money survey also noticed a trend in living paycheck-to-paycheck.
According to survey data, almost 20% of respondents stated they are currently living in this manor, with another 55% sharing they have had to dip into savings to make ends meet. Both scenarios highlight that many Americans are either not earning enough salary or are spending more than they are earning.
So, how can you rectify some of these situations? Let’s take a look at some financial tips that can help you:
1. Build an Emergency Fund – Having an emergency fund can help relieve stress related to unexpected expenses or emergencies in the future. Determine how much money you need to survive each month and multiply this figure by the number of months you want to create a savings fund for.
How much you want to put away depends on what you feel comfortable with – for some, they will stick with the often advised three to six months worth of savings, while others advise to aim for nine to twelve months of savings. Next, begin putting small amounts of money away on a weekly, bi-weekly, or somewhat regular basis.
You can use tracking apps or mobile alerts to help you do this. Also, take a look at your daily, weekly and monthly expenses right now and determine what expenses could be cut out. For instance, a lunch here or there, or a coffee stop each day could add up to a substantial amount of money at the end of the month. Consider shifting this money into your emergency fund instead. Last, speak with your HR representative at work about having money directly taken from your paycheck into a savings account. Many people have an easier time saving money when it is automatically done for them.
2. Consider a Side Job – Have a skill or trade that can earn you some extra money on the side? This can be a great way to pay down debt, create an emergency savings plan, or invest your money for retirement or some other goal. This side gig can be anything from freelance writing and tutoring to dog sitting and handy man work.
3. Take an Honest Look at Your Spending – Many of us do not keep track of what we spend on a regular basis. A video subscription here, magazine subscription there, monthly fitness accounts, and other fee-based subscription items can add up quickly. Groceries and eating out are another expense area that should be reexamined on a regular basis. Think about what items you use all the time, what you can let go of, and where you can cut
corners – for instance, cooking your own meals for the week rather than eating out at lunch each day while at work.
4. Reflect on the Big Three – If you are someone that is living paycheck to paycheck or having to regularly dip into savings to pay monthly bills, it is time to examine the big three – housing, food and transportation. Cutting expenses in some of these areas can typically get most people out of the scenarios mentioned above.
Not sure how to create a budget or shift finances in order to build an emergency savings plan? Why not sit down with a financial advisor and make 2018 the year you get your finances in optimal shape. With the proper strategies in place, you could have a substantial emergency fund or savings account in place by the end of the year.
If you want to learn additional strategies in order to decrease financial stress, reach out to skilled financial planner Matt Logan at www.MattLoganInc.com
Matt Logan is a Representative with Matt Logan Inc and Summit Brokerage and may be reached at http://www.mattloganinc.com/, 336-540-9700 or [email protected]
Matt Logan Inc. is an independent firm with Securities offered through Summit Brokerage Services, Inc., Member FINRA, SIPC. Advisory services offered through Summit Financial Group Inc., a Registered Investment Advisor. Summit Brokerage Services, Inc., its affiliates and Matt Logan Inc. do not give tax or legal advice. You should consult an experienced professional regarding the tax consequences of a specific transaction. These are the views of Matt Logan Inc., and not necessarily those of Summit Brokerage Services, Inc. and any of its affiliates and should not be construed as investment advice.