In America, financial insecurity is a big problem and it can affect anyone, regardless of their income. According to one study, almost 40% of Americans making over $100k per year are living paycheck to paycheck! Hard to believe, right?
Those who are financially insecure aren’t just struggling to get by, either. Due to their spending habits, they have large amounts of debt and a personal financial statement that shows they’re deep in the red. As a consequence, they’re handcuffed to a job, greatly reducing their freedom!
Unfortunately, it gets even worse. Nearly 68% of financially insecure Americans experience a great deal of anxiety, too. They feel tremendous pressure and strain about how they’re going to make ends meet, draining their energy and affecting their health in the process. Most of them report experiencing migraines, having trouble sleeping, and they even have an increased risk of developing heart disease!
As if all that wasn’t bad enough, people experiencing financial insecurity aren’t as concerned with their health as they should be. Most of them are struggling to pay their bills as it is and they don’t have extra money for medical treatment which further compounds their health problems!
It’s clear, financial insecurity not only affects your money, but it also impacts your emotions, health, and overall quality of life. As a result, you should review the list below and determine if you’re at risk of becoming financially insecure.
If you’re like most people, your job is your sole source of income. It acts as the glue that holds your entire financial situation together. But, have you ever thought what might happen if you lost it?
Without a job, many people would be left scrambling to make ends meet. In their panic to find fast cash, they’re forced to use credit cards which causes them to go into debt and waste money on interest!
It’s not healthy to live in constant fear of any type, including losing your job. If that’s how you feel, you might want to think about changing employers.
You can also help ease your worry by being frugal and setting a little more money aside. With reserves in a cash runway or emergency fund, you’d have resources to rely on if you were ever let go or chose to make a change!
An empty or nonexistent emergency savings account is a sure sign that you’re facing financial insecurity. Without one, you’re likely a sudden bill away from having a full-blown personal financial crisis!
To avoid financial insecurity, you should consider having both a rainy day savings account and an emergency fund. Not only will they help you cover unforeseen expenses, but you’ll feel confident knowing that you can withstand almost any financial event that comes your way!
Some money personalities pay little attention to their finances. Most often, they don’t know how much they earn, where it’s spent, or if they even save. Therefore, they may not even realize whether they’re financially insecure or not!
Many people who overlook their finances don’t think it’s a big deal, but it is. By neglecting their circumstances today, they’re showing complete disregard for their future as well!
For your finances to improve, you have to take responsibility for them. To get started, try taking a financial assessment so you can understand your situation. With this information, you can take steps to move forward and reduce your feelings of financial insecurity!
For many people, it’s easy to assume that budgets are only for those who have low incomes and are likely to be financially insecure. But, this is one money myth that couldn’t be further from the truth!
Regardless of your pay, you should have a budget. It helps establish the way you’re going to spend and save within the confines of your income. By creating one, you’ll set yourself up to live below your means and feel financially secure. Besides that, you’ll be more in control of your money and empowered to work towards your financial goals!
Your budget creates a plan to get the material possessions and have the life experiences that excite you. But, if you don’t stick to it, then your budget is essentially useless!
By tracking your spending, you’re able to see where your income is getting exhausted. This allows you to quickly determine if you’re living above your means and at risk of becoming financially insecure. Not only that, it shows if you’re adhering to your budget and working towards a better financial future, too!
It’s no secret that credit cards make shopping easy and convenient. They allow you to buy on impulse and spend until your heart’s content without having to pay the bill for weeks to come!
While it’s possible to use credit cards responsibly, many people don’t. Instead, their temptation to satisfy sudden cravings and emotionally spend can be so great that it leads them straight into debt!
Not being able to pay off your credit cards in full each month is another sign that you may be financially insecure. It shows you’re spending more than you make which makes it even more difficult to have breathing room or find peace!
If you have high-interest rate debt, then one of the best money moves you can make is paying it off. By becoming debt-free, you’ll not only find space in your budget, but you’ll feel mental relief, too!
Having restless nights that are full of tossing and turning can be another sign of financial insecurity. Instead of being able to get the rest you need, your mind races and you find yourself laying awake worrying about money. You may have concerns about your income, paying bills, or even the state of the financial markets.
While it’s easy to say you need rest to function and think clearly, doing it isn’t quite so simple. Still, here are some tips that can help you get a better nights sleep:
Typically, if you’re losing sleep over money, then you likely have some unresolved financial concerns. But, by investing in yourself and speaking with a professional, you’ll feel comfortable and have a greater sense of security!
It doesn’t matter whether you think it’s impossible to get out of debt, achieve financial freedom, or live out your dreams; losing hope hints that you’re facing financial insecurity.
Oftentimes, people sink into despair when they’ve given up. They’ve decided to stop putting in effort or started to believe their goals are never going to happen. Regardless of this, no challenge is ever too big and financial success is possible, no matter your age!
As you pursue your dreams, you’re going to face problems, feel run down, and hit dead ends. And that’s okay because they’re all a part of the process. Over time, your circumstances will change and your situation will improve. Sometimes, all you need is a little help, encouragement, or perspective to persevere over your obstacles!
In personal finance, some things get better with time. Such as, watching your net worth grow due to the power of compounding. But, others don’t and putting off important bills can turn a bad situation worse!
For example, imagine you own a home that has an old leaky roof. By that time, you’re left with no choice other than to replace it. Not only that, but you’ll likely have interior damage that was caused by your delay as well!
By ignoring important expenses and bills today, you’ll end up paying more for them in the future. Not only will you get charged interest, but in some instances your negligence and inflation cause them to rise higher, too!
While some costs take you by surprise, the majority of them you can anticipate. For the ones you know are coming due, budget and use reserve funds. They’ll help you pay bills promptly and save for large expenses over time so that you aren’t left short on cash!
Without realizing it, many financially insecure people waste money. Paying interest, late, and overdraft fees have become so routine that they do it without blinking an eye!
Incurring these types of fees is further evidence of financial insecurity. Paying them shows you don’t have the financial discipline to manage your money effectively. If you did, you wouldn’t incur them and you’d be able to avoid these recurring costs altogether!
You would never know that someone is facing financial insecurity by looking at them. On the outside, they may seem like they have a good job or nice things, but on the inside, they may feel financially unstable. In addition, they’re often afraid to ask for help out of fear or shame. So, they bottle their emotions, instead of finding the support they need.
If you have feelings of financial insecurity, then please know it can all get better. By telling a trusted family member, friend, or mentor, you can get the assistance that will improve your situation.
While feeling financially insecure can seem overwhelming and feel daunting at first, you can turn the corner. With time, effort, and a little guidance, you too can start to see light at the end of the tunnel!
What makes you feel the most financially insecure? Comment below.
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