More Than Half of Americans Worry About Money Every Day | Wealth of Geeks

Are your finances worse than last year? That’s the status quo for 37% of Americans. It doesn’t help that 36% have no savings. 

Many people feel anxious due to chaotic finances and bleak economic outlooks, wondering how they will make ends meet going forward. From mounting credit card debt to the skyrocketing cost of everyday items, American finances are in a precarious position with no end in sight.

The reality is that Americans have been struggling financially for a very long time. While the pandemic improved the savings habits of many, they have not persisted. The future doesn’t look bright for the average American and much worse for those below that bar.

Americans and Their Money: By The Numbers

The average American income in 2022 was $55,640 annually. The gender breakdown shows men averaging $1,164 a week and women averaging $971 per week.

Education also influences income, with the highest earners holding a bachelor’s degree or higher — an average of $1,556 a week. High school graduates without college degrees were the second-highest earners, averaging $866 weekly. Those who did not have a high school diploma averaged $692 a week.

It’s also worth noting that the top 10% of earners own 68% of the total wealth in the United States. By contrast, the lowest 50% of earners only hold 3.2% of the country’s total wealth.

The Struggle To Stay Afloat

Financial difficulty is a growing problem in the United States. One study found that about 41% of employees live paycheck to paycheck. This number has been steadily rising over the last few years. 

More than half (52%) of those living paycheck to paycheck, primarily single parents (53%) and individuals in fair or poor health (57%) earn less than $50,000 a year. Not earning a livable income creates a genuine struggle for these people to afford basic things like food, shelter, and medical care. In fact, 43% of these employees find meeting their basic needs to be extremely difficult or impossible.

More and more Americans are having to decide whether to pay rent on time or keep the lights on. This isn’t just one or two months out of the year. They face the impossible choice of whether to pay bills or eat month after month.

It’s small comfort to know that more and more people are finding themselves in the same boat —  fighting to stay upright, doing everything they can to keep from drowning in debt.

How Financial Struggles Impact Individuals and Families

The real problem with this sad state of American financial affairs is that it affects more than just a person’s pocketbook. It doesn’t only affect their ability to take care of their families and themselves. The effects of this struggle and the inability to attend to the most basic needs wears on the person’s mental health, affecting society as a whole.

Financial issues are one of the most common reasons for domestic violence. It also explains why many women stay in violent relationships. Financial problems are the also the reported cause of about 38% of divorces.

Any difficulty increases a person’s stress. All too often, financial problems result from poor financial decisions and unpaid debt. While the money is flowing, all is well. Then, one bad month can derail the whole train, leaving people with a growing mountain of unpaid debt.

The real problem is that they don’t know how to get out of debt. That increases stress and can lead to mental health issues. One survey found that 32% of Americans said their most significant stressor was money, and 59% have revealed that finances are a daily worry. These worries have caused insomnia and sleep issues in 50% of the respondents.

Is There Any Good News?

A 2021 survey asked 11,000 American adults about their financial comfort. Of that group, 78% reported living comfortably or doing okay financially. Likewise, about the same percentage of parents said they were financially okay. However, in that same survey, less than half (48%) of respondents gave their local economy a rating of “good” or “excellent.”

The Federal Reserve reports that 12% of loan borrowers were in arrears on their payments in 2021. While this is a high number, the good news is it decreased from 2021’s 17% in arrears. Student loan balances also experienced a slight decrease in 2022, reaching $1.57 trillion.

As for retirement, 40% of non-retirees believed their retirement savings were on track. Of those already retired, 81% reported doing okay or better financially.

Turning Your Financial Situation Around

Those struggling with money may find little comfort that they are in the same financial boat as many others. However, the current state of personal finance is reaching a critical tipping point where more resources must be accessible for those going through hard times.

Many free budget templates are available for people who want to get better control of the money going in and out of their households. A budget can be a powerful tool to help with savings and spending — when used correctly.

The key to a good budget is flexibility to accommodate any unexpected expenses. This is not the same as an emergency fund; instead, it gives enough room to get school pictures one month or go out to dinner to celebrate a promotion at work without breaking the bank or borrowing from a bill to pay for it.

An emergency fund is essential, but many individuals have trouble saving. Ideally, an emergency fund should contain three to six months of the monthly budget. If the monthly budget is $1,500, the emergency fund should contain a minimum of $4,500 to $9,000.

Retirement is also a significant concern, and no one is ever too young or old to start planning for it. Some of the best retirement calculators can help people make plans, and offer many tools and resources.

Overall, the current state of American finances doesn’t look so sunny. The good news is people are not statistics. People make up statistics, which means they can defy the numbers. Good money management can help individuals pay off debt and improve their finances. It can happen for almost anyone who has discipline and commitment.

This article was produced by Media Decision and syndicated by Wealth of Geeks.