Summary: A 2017 study has revealed that nearly half of every household in America live in a state of financial insecurity because they have not developed the habit of saving money for emergencies or their future. This has caused a heavy financial burden for many Americans. Read on to get over it.
Consumer spending is partly responsible for this because according to a US Census Bureau report, the spending habits of Americans have changed dramatically. Based on statistical data, an average American spends most of his money on transportation, food, and housing.
Yes, these are necessities of life however these habits are fuelled by personal preferences rather than just fulfilling a need. Today’s media and advertising have significantly influenced people’s spending habits.
It turns out people are spending more on things that they do not necessarily need.
Going back to the basics
If there’s one thing that needs to be embraced to get over financial burdens, it is practicality. This is a primary principle promoted by many, if not all, employee financial wellness programs that can help address one’s financial struggles.
This may be a hard habit to break with more and more things that are out on the market with solutions to just about any do-it-yourself or convenient gadgets that can “improve” your lifestyle. But do you really need it?
Fulfill obligations and earn your freedom
Stop spending money that you don’t have and start living within your means. What you need is a no-frills budget for your day to day needs to get you moving towards financial security. This can cut down your spending a lot, especially if you live a lavish lifestyle.
Take control of your income and spending by setting aside a portion of your earnings to settle your credit. The sooner you act on it, the better.
Reach out to your creditors to provide you with a realistic payment scheme and make sure to live up to your commitments. Exert every effort to settle your dues first because ignoring it can only add up to your existing obligations and problems.
Plan and spend wisely
Plan your finances smartly instead of surviving on payday loans.
Create a budget for your income, identify your fixed costs and allot percentages for each item. Contemplate on how you spend on these costs and see if you can make prudent adjustments by conserving energy or water, transportation expenses, and food.
Start by making a list of your expenses and sources of income then make a budget. Identify your fixed costs such as housing, transportation, debt-servicing, and food.
What remains would be your disposable income, which you can apportion for other things that you plan to have. Just make sure that you do not go over it. In due time, you’d find out that this is a better way to manage your finances.
Unless you break your lifestyle and spending habits for the best, none of these can gain good traction for you, so start managing your finances wisely and judiciously.