It seems that Americans will never run out of financial worries. There will always be something to worry about: the bills, your job security, the minimum wage, the rising healthcare costs and now, insufficient savings funds.
According to PovertyUSA.org there are more than 46 million Americans who are currently living in poverty in the country. The website explains that this number of people, and more, are having trouble meeting even the basic necessities of food, healthcare and childcare.
Getting them out of that financial situation will be tough but you have to realize that it all boils down to one thing – we need to do something about the insufficient funds in every household.
This is where financial literacy will come into play. Although financial education is not enough to keep you from money problems, it will give you the insight and tools that will have to be implemented to improve your situation. The only way that you can keep yourself from financial worries is when you understand what exactly you need to do to keep yourself from falling into another crisis.
Survey reveals why Americans should still worry about money
The 2014 Consumer Financial Literacy Survey done by Harris Poll for the National Foundation for Credit Counseling (NFCC) gives us some foundation on what we should do exactly. According to this study, 1 out of 5 Americans are currently worried about their finances because of two things: insufficient emergency and retirement funds. Although we have gone through a lot of difficulties in the past, we still have to yet to prioritize saving up for the funds that will keep us sustained when another crisis comes around.
It is tough to survive a crisis without an emergency fund and it is tougher to live out your retirement without money either. You know that you need to come up with a plan to solve your problems with insufficient funds. That will help keep your financial worries from ruining your everyday life.
Thankfully, the Financial Literacy Survey published on NFCC.org revealed some statistics that points out the reason why 16% of Americans are most worried about insufficient funds. Here are the key findings in the report.
Only 39% of Americans use a budget to track their spending.
Budgeting is the key to save money despite your limited resources. If you use a budget, you can see the expenses that can be cut back on to make way for more savings. That will help you set aside the money to grow your funds.
Only 32% of are saving for retirement.
This is a direct statistic that answers the question why people are worried about their retirement fund. If you are worried about it, just save up for it. Use a budget as suggested previously.
34% still carry some credit card debt every month.
The initial fear of credit card debt is now gone. Apparently, people have begun to take on this type of debt once more. The high interest rate is robbing you of money that could have been going into your saving funds. More than 35 million consumers carry over $2,500 balance to the next month. If you have to use your card, make sure you can pay for it in full when the billing arrives. That will keep the interest rate from taking your money. When you carry over an amount each month, that can add to your monthly card payments.
These three statistics simply tells why Americans have financial worries about their funds. First is they lack a budget to help organize their finances. The second is they do not put savings high in their priority list. The third is they are letting their money go to waste because of interest fees that could have been avoided if they only learned how to manage their money properly.
Tips to grow your savings and thus avoid money concerns
The obvious solution to relieve your financial worries about insufficient funds is to just put aside some money to increase your savings. We don’t have to dwell on the reasons why you need both a emergency fund and a retirement fund. They are both important because they can protect you during times when you are most vulnerable. It will keep you from both debt and money stress.
Of course, that is easier said than done. There are sacrifices that you need to make along the way in order to implement the strategies to save money. Here are some of our suggestions.
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Create a realistic budget and stick to it. When you have a budget, you are made aware of the money that comes in every month. A budget plan will also help you decide where your limited resources should go. If you put your savings high on your budget list, that will help you meet your target every month.
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Change your spending habits. Obviously, if you want to save more money, you need to start implementing better spending habits. You need to stop making purchases that you cannot afford. Or even if you can afford them, if you do not need it, you may want to pass up on the purchase and put the money in your savings instead.
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Opt of the economical version of expenses. It is ideal that you pay for the cheapest product that will give you the best value for your money. Take note that the most expensive is not always the best product to choose. Sometimes, you are merely paying for the name of the brand. Just be careful that you are not sacrificing the full quality of your products over the price. Find the balance at all times.
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Set up an automatic savings transfer. One way to make sure that you will save money is by setting up an automatic transfer to your savings account. That way, the only money that you will see will be post savings. Just like your taxes, you may want to do this so that you will not feel the decrease in your net income. Well, at first you will feel it but eventually, you will get used to it.
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Downsize your expenses. In some cases, it is tough to make ends meet simply because you are living a lifestyle that you cannot afford. Lower your standards a bit. Live in a smaller home, get rid of your second car and cancel some of your subscriptions. There are so many areas in your budget that you can cut back on to help you boost your savings.
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Review your tax breaks. Sometimes, you do not know it but you are entitled to some tax breaks that can increase your monthly net income. You may want to check this out and anything that you find can be added to your saving funds.
You have to realize that your financial worries can be addressed when you have financial security. Once you feel secure, you will feel that the stress will mostly just go out the window. You do not have to think about the unexpected because of the security that you have set up around your money. Saving for the rainy day and your retirement is a clear solution only because of the financial cushion that it will provide. It is also because it can keep you from the need to acquire debt and thus wasting more money on interest payments.
Remember that in growing your savings, the amount of money that you can afford to put aside matters. However, do not be discouraged if you can only put side a small amount because you still have debt obligations. A small amount is better than nothing. Just be consistent in putting money in your savings. That way, you will not be left with nothing when you need it the most.