Families today are burdened with serious financial challenges. How do you save enough for a rainy day? How do you help send your kids to college? And, what about your retirement? Here are a few smart ways to overcome common modern money problems.
When You Don’t Have Enough Income
This is a tough one, because there’s not a lot you can do to force your employer to give you more. Even business owners are struggling in this economy, and the only way to make it through is to figure out how to make more dough on your own. Each year, Americans say lack of money and too much debt are their biggest problems. And, to add to that, 25% of families rely on one income. It can make things feel hopeless.
Your solution: a reality check.
One of the most common problems is that people don’t want to face the reality of their situation. They somehow think that things will get better all by themselves. They won’t. Eliminate expenses or increase your income by getting a second job — even a side hustle or “gig” to get your through tough times. Take a long and honest look at what your net income is and where that money goes. Maybe you need to boost your income, but maybe you can get by on fewer extravagances.
Too Much Debt
According to Marks & Harrison, sometimes the problem is debt created by medical bills and accidents — accidents which insurance companies are supposed to pay on but sometimes don’t. The average U.S. household has $1,766 in overdue medical debt.
Another problem is credit cards. The average U.S. household has credit card debt of over $15,000. And, the average mortgage debt is $150,000, and student loan debt is over $30,000.
With all these expenses, it’s impossible to save. The solution isn’t to spend more. It’s to save more. Do what you can to pay down debt as fast as you can. Then, put all the money you were putting toward your debts into savings.
Losing Your Job
When you lose your primary or only source of income, things get tough real quick. One in three Americans have anxiety over losing their job. Even people with “secure” incomes have seen the rug yanked out from under them. Job loss is usually a shock to the system, and very traumatic.
The solution is to work on your savings. Savings can be depleted between jobs, but the fact that it’s there means you have some kind of safety net. Diversifying your sources of income might also help. Consider picking up a side job for extra money.
Money is the number one cause of divorce in America. It has nothing to do with how much or little you make either. It all has to do with the values and goals and attitudes you have towards money. The solution is simple, yet difficult to implement: You must talk out your goals and values with your significant other.
Compromises and open discussions need to happen on a regular basis. It’s OK to have disagreements, but you have to operate within the confines of reality. Meaning, your spending must align with your income and long-term goals. If you can’t do that, and things are irreconcilable, the sad fact is that your marriage (or relationship) will end sooner or later.
Addie Tilghman has a job in the loans department, she’s also a single Mom so knows a thing or two about money, making it stretch and staying out of debt. She hopes her articles will help folk, look out for her articles around the web!