A young couple working on their budget

Is there anything keeping you up at night? Are you worrying about your children’s safety or maybe your long to-do list? Some Americans toss and turn during the night due to feeling financially unsettled. Northwest Mutual found that 85% of the population has some sort of financial anxiety. Any type of unrest can be bad for your health.

The good news is you can take control of your financial situation, confront these money fears head-on and get in the driver’s seat of your financial future.

So, how do you address these fears? Here are some common financial concerns many Americans have and the proper steps to take to tackle them while preparing for your financial future.

Not Being Able to Retire

The sky is falling! The sky is falling! No matter what you read, you see doom and gloom about the financial state of your fellow Americans. How many times have you heard that Social Security is going bankrupt and there will be nothing left for the people that are currently working? Most likely, plenty.

Many people feel as though they won’t have enough to retire no matter how much they save. With the descent of Social Security and the extraordinary increase to health care costs, it seems impossible for anyone to even consider retiring. No wonder everyone is freaking out.

What to Do

First of all, know that the Social Security trust fund may run out by 2034; however, you will still receive benefits, just maybe not as much. But in order to really combat this fear, you must develop a personalized financial plan to reach your goals. Meeting and partnering with a financial planner and tax professional could be the best solution for tackling this fear. They can help you navigate the twists and turns that your financial journey can produce.

A financial plan can also help you prepare for unexpected situations. What if you need a new roof? What if you have a car accident? There are plenty of factors that could play a role in creating a strong financial future. Having a financial plan may help you sleep at night.

Living Paycheck to Paycheck

Some Americans are spending every dime of their paycheck. It’s a never-ending cycle and they can’t seem to get ahead or save for the future. It can seem almost paralyzing.

What to Do

Develop a budget you can stick to. Whether your focus is to pay down debt or work on increasing your contributions to your retirement accounts, decide how you can put it in the budget. A budget shows you what is coming in and going out. It will help you evaluate areas where you could cut back on your spending and what habits are keeping you living paycheck to paycheck.

For example, try canceling your cable bill and only using a subscription service. This may save you hundreds of dollars depending on your plan. Try focusing on one area of your budget every month. This way you will not feel overwhelmed. This process will slowly help you cut back your spending little by little.

By cutting back your spending, you will be able to shift your focus to some of your financial goals. Maybe your dream is to own a home. By evaluating your budget and finding ways to save, you could achieve this goal in no time.

Losing Your Job

At 4.1%, the unemployment rate is the lowest it has been in years, but this doesn’t mean that every job is secure. For example, if you work in the retail sector, layoffs happen every day. Or, your company might want to replace you with different talent. You never know what could happen.

What to Do

Build an emergency fund of 3 – 6 months of your expenses. You could either use those funds for an emergency or if you get laid off. Your emergency fund will give you a little bit of a cushion so you can get back on your feet and not stress about going further into debt.

Also, always look for ways to increase your skill set. This will make you more marketable if, in fact, you do lose your job.

Living in Debt for Eternity

The American debt crisis is real. Recently, the average American household credit card debt increased to $16,000 per NerdWallet data. With interest rates on the rise, this could cripple some Americans’ finances. We live in a society where we want to keep up with the Joneses, even if it’s financially out of our reach. It’s easy to get in the habit of living in debt. Or, maybe unexpected expenses left you buried in debt, and it can be hard to find a way out.

What to Do

Did your New Year’s resolution consist of tackling debt? If so, you have taken the first step toward debt recovery: recognizing there is a problem. You can pay off any amount of debt if you create a strategy to do so. No matter how much debt you have, develop a strategy for repayment.

One option would be to pay off your debt with the highest interest rate first. Some credit cards can charge upward of 20% annually.

You can also pay off the smallest debt first. This will make you feel as though you are crushing your debt that much faster. It will leave you feeling accomplished and motivated to continue and do more.

Once you have paid off your debt, keep it that way. Create positive spending habits. This could include waiting 48 hours to make a purchase. If you give yourself time to think about buying an item you may not need, you’ll most likely forgo the purchase.

Financial fears are real, but with a little time and effort you can combat them. If you have financial fears that keep you up at night, create different ways you can help prevent them from happening. How can you plan now to put your mind at ease? It may not happen overnight, but you can work toward relieving your financial stress one day at a time and enjoy sweet dreams.

What are some ways you plan on taking control of your financial future this year? Let us know in the comments below!

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This Post Has 24 Comments

  1. I’m looking forward to retirement in 2019 but would like to get totally out of debt do you have or know of any reliable credit counseling services.

    1. Hi Diane:

      My best advice is to talk to local nonprofits and/or check online reviews. We don’t have any particular group we recommend. If they charge, make sure you know what they would charge for, etc. Good luck!

      Thanks,
      Kevin

  2. Hello it great to have a forum to discuss these issues. Thanks all. I had to take out a HELOC on top pf my mortgage as I needed money quickly to pay off my ex-husband for him to sign divorce papers. Just wonderingwhat’s the fastest, best way to pay the heloc off when it’s so challenging to even save for an emergency fund much less retirement. How do you keep the heloc payments from getting out of control as time goes along? what would be the best way to get this debt handled. Any advice would be greatly appreciated.

    1. Hi Grace, Thank you for sharing your situation with us. Depending on how much equity you have in your home, you may be able to refinance. You can look into this option by visiting this page or give us a call at (888) 980-6716.

  3. Great article. I’m working on tracking all spending and mapping a true budget. Goals this year are to pay off / pay down debt starting with those with the highest rate first, saving to build an emergency fund and saving for a family vacation. I am also taking online courses to build my skill sets.

  4. Thanks for the insights. I have a budget but it is not tight enough. Last year I met my goal by getting all of cards down to one third. My goal is to pay down my debt more so that I can save for a down payment to buy a second home. Thanks for the tips

    1. Set a comfortable goal each pay period. Pay yourself first. Put it into a separate account. Don’t ask for a debit card. Put money into the account don’t take any out unless it is an absolute emergency

    1. I would advise finding a financial advisor or financial counseling service before making any decision on how to move forward, particularly in a stressful situation. An Internet search should help you find one in your area.

  5. Okay my bills are on course.B saying this I do have credit cards debt some I was able to transfer at 0 percent rate for 21 months
    Because I find myself with holes of income 3 months at the time I keep my Capital one Venture card which charges 16.3 percent revolving I owe presently $5,500 I set up to pay auto monthly. Then when my income is regular weekly then I pay lumps sums on credit card till is 0 (zero) balance. Then I have my house note approximately $1,635.00 monthly (set up auto pay)
    Unfortunate I have a new car note (1 month before my last car was paid out I totaled it)
    So all that shared here with the world
    My plan is the next 3 months to refinance my house lower my rate 4.75 percent now and get enough cash out to repair a my deck on water which I been told it will cost above &12.000,00.
    I want to work 18 more months then scale down to PT Nurse work.
    I been instructed by my SS advisor to wait to collect SS at 70.
    Then from then on I plan to work PT and get a reliable roommate.
    I will appreciate comments
    Thank

    1. One thing I will tell you about your plan is that rates are trending up and I can’t really say whether they will be lower than your current rate in three months. That’s the word of caution I have, but it sounds like you have a plan for paying off your debt, so that’s good.

  6. My wife is recently retired and we are actively looking at the best method to eliminate credit card debt. Ours is much lower than the national average because we have always tried to live within our means. But, things happen. We have a strategy that we think will work for us:
    1. Pay off the lowest balance first.
    2. Make larger payments to the highest interest rate balance.
    3. Retire all department store credit cards. These all have the highest interest rates. Cut up the cards and cancel the accounts.
    4. Develop weekly menus and grocery shop for those items. My wife is diabetic, so splurges are rare.
    5. Have weekly discussions on the budget to stay on course.

    1. Hi Sherry:

      We can help you with that. Depending on how much your marketing to get, you can get a personal loan through our friends at RocketLoans up to $35,000. If you’re looking to take equity out of your home, you can look at your options with Rocket Mortgage online or give us a call at (888) 980-6716. Hope this helps!

      Thanks,
      Kevin

  7. I think it’s great that you publish great ways to help people, it would be even better if you really helped your customers. I need help paying off 2 credit cards with a total debt off $1100. I tried to get equity from my house to pay these off and get rid of them. You said no. I’ve never missed a house payment and at the time I asked you I never missed a payment on the cards. Now I’m 1 payment late on the cards and my credit is shot. Thanks for nothing.

    1. I’m sorry you had a poor experience with us. There are certain qualifications you need to meet in order to refinance, but I’m going to get this over to our client relations team to see if there’s anything we can do for you and look into your experience. Thanks for reaching out.

      Kevin Graham

    2. Please don’t take this the wrong way, but if you have 1100 in credit card debt, it’s not a crisis. Even if you find yourself short one month, pay the minimum. It keeps you in good graces. Your credit isn’t as mess up as you think. Also, if you pay 50 more the minimum, you will have that paid off faster than if rocket mortgage gave you an equity loan. You would be even farther than your goal. You got this, just get yourself back on track. It’s up to you.

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