What does financial security mean to you? Is it the ability to pay your bills on time consistently? The option to spend a little more during a given month without having to worry about landing in debt? Reaching a place of financial security means not having to lie awake at night worrying about money matters. Unfortunately, however, many Americans aren't secure in their finances, and according to a new report by Prudential, here are the main reasons why.

1. Having too low an income

It's hard to feel like your finances are in order when your income is such that you're barely able to make ends meet. If that's the situation you're in, you have a couple of choices. First, you can work on boosting your skills so that you're able to get a promotion or better job that allows your earnings to increase. Will that happen overnight? No. But if you keep at it, you might be in a better place employment-wise in a year's time.

A couple, seated in a kitchen table with an open laptop, look over a document while appearing concerned.


Another option you ought to consider is getting a side job on top of your regular one. That extra income will make it easier for you to pay your bills, build savings, and maybe even have a little left over for some of the luxuries you've been missing to date.

2. Not having enough saved for retirement

Lacking in the retirement savings department is a good reason to feel uncertain about your financial future. If that's the case, take a look at your spending and aim to cut back so that you're freeing up cash for your IRA or 401(k). A second job on top of your regular one will serve the same purpose, especially sine the earnings from that gig won't already be earmarked for existing expenses.

Of course, the more money you're able to sock away for retirement, the better, but if you invest your savings wisely, you might manage to turn years of modest contributions into a rather impressive sum over time. Case in point: Saving $200 a month over 30 years will leave you about $227,000 richer if you invest your savings at an average annual 7% return (which is doable if you load up on stocks in your retirement portfolio). Make it $300 a month, and you'll be sitting on $340,000.

3. Lack of emergency savings

If you don't have an emergency fund, it makes sense to feel financially insecure. Without that safety net, you might have no choice but to resort to debt the moment an unplanned expense pops up. If that's the situation you're looking at, prioritize your emergency savings above all else. Cut back on expenses, work a second job, or do whatever it takes to sock away at least three months' worth of living costs in the bank. Having that cushion will ease some of the money-related tension you might otherwise be experiencing, and it will serve the equally important purpose of helping you avoid additional debt.

4. Healthcare costs

Healthcare is an unavoidable yet substantial expense that all of us face. If you're struggling to keep up with your healthcare costs, there may be a few things you can do to ease that burden. First, make sure you truly understand your health benefits. Staying in-network or obtaining the right referrals or pre-authorizations could spell the difference between having your care covered and being forced to absorb the cost on your own. At the same, don't hesitate to shop around for better insurance if you're covering that expense on your own. A pricier monthly premium might actually save you money via lower copays and deductibles.

Furthermore, be strategic about managing your medications. Order drugs you take regularly in bulk, and ask for generics whenever possible. Finally, don't hesitate to negotiate services that aren't covered by your insurance. Your providers might cut you a break once they learn that you're paying out of pocket.

We all have our reasons for feeling financially insecure, so think about the ones that apply to you and aim to address them. Doing so will give you the peace of mind you deserve, not to mention help you get a better handle on your finances on a whole.