Half of Americans Are Anxious About Their Finances. Do These 4 Things if You're One of Them
- New data reveals that a large chunk of Americans are worried about money.
- There are steps you can take to shore up your finances and prepare for events like a potential recession.
Don't spend your days stressing over money when there's action you can take.
These days, a lot of people are worried about their finances, and for good reason. Not only is inflation eroding consumers' buying power, but warnings of an impending recession are making a lot of people fear for the worst.
If you're anxious about your finances, you're in good company. A good 54% of Americans feel that way, according to Northwestern Mutual's 2022 Planning & Progress Study. But rather than expend energy worrying about money matters, it pays to take the following steps to improve your financial outlook.
1. Boost your emergency savings
Are you worried that your next unplanned bill, whether it's a home repair or an issue with your car, will drive you into debt? If so, then boosting your emergency fund is a good strategy. Start cutting back on spending and filtering more money into your savings account so that you have, at a minimum, enough cash to cover three full months of living expenses.
If you're worried about losing your job due to a recession, this is an important step to take. A solid emergency fund could get you through a period of unemployment -- even an extended one.
2. Pay off high-interest debt
Carrying debt can be stressful -- even if you're managing to keep up with your payments. And if you're concerned about losing your job during a recession, it's important to do what you can to eliminate unhealthy debt. After all, if you were to become unemployed, the last thing you'd want is a monthly credit card minimum payment to deal with.
Take a look at your various debts and aim to pay off those that come with high interest rates -- namely, your credit cards. Don't worry about whittling down mortgage debt -- that's a healthy kind to have, and chances are, the interest rate you're paying on your home loan is far below what your credit cards are charging you.
3. Delay large purchases
You may be eager to buy a home or upgrade your clunker of a car to a newer model. But if you have financial concerns -- especially related to an upcoming recession -- then you may want to put those purchases on hold. The last thing you need is to take on more expenses at a time when you're already worried about money. Instead, work on boosting your savings before adding to your bills and debt load.
4. Boost your income with a second job
Between inflation and recession fears, it's easy to see why you might think your current paycheck just doesn't cut it. If that's been a source of stress for you, try picking up a second job to give your income a boost and make it easier to do things like pad your savings and pay down costly debt.
While experts are worried about an impending recession, right now, the labor market is strong and jobs are available. So it pays to take advantage of those circumstances by scoring a side gig.
Money worries could impact your mental health and cause you to lose sleep. And you deserve better. Think about the reasons behind your financial anxiety and do what you can to address them. You may find that adding $1,000 to your savings account or shaving $500 off of your credit card balance works wonders for your outlook.
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