Inflation is challenging for many Ohio families. Skyrocketing costs can cause additional stress and possibly mental or physical health issues. A Fidelity Investments survey showed that going into 2024, a third of Americans were worse off than they were one year ago, with the same number considering more conservative money goals this year.
In addition, according to a National Credit Union Foundation Health and Financial Well-being white paper, 75 percent of Americans cite finances as their primary source of stress, exacerbating existing health disparities and perpetuating a cycle of poverty.
Despite these challenging times, younger generations are the most optimistic about their finances, and, according to Fidelity, “showing a remarkable commitment to improving financial wellness in the coming year.” Of those surveyed, 76 percent of Gen Z-ers and 79 percent of millennials believe they’ll be better off financially in 2024, compared to 64 percent of Gen X-ers and 52 percent of baby boomers.
No matter what stage of life you’re in, you can take steps to improve your financial well-being and reduce stress in your life. Here are a few tips to get started:
- Don’t be embarrassed about money challenges. It’s never too late, or early, to review your personal finances and set goals to improve them. Tackle one area at a time, based on your current priorities, whether it is cutting monthly spending to reduce debt or build an emergency nest egg.
- Review your budget. Experts recommend a 50-30-20 split with 50 percent of your take-home pay to be used for basic expenses such as mortgage or rent, and food. Thirty percent should go to discretionary items like clothing and entertainment. The final 20 percent should be used to pay down debt and increase savings.
- Reduce spending. Are there fixed expenses that you could reduce. These are things that cost the same amount each month like rent, cell phone bills and insurance. Consider moving to a less expensive area, taking on a roommate, or shopping around for better deals phone plans and insurance.
- Get creative. Many spending categories fall in the ‘nice to have, but unnecessary’ bucket. This includes streaming services, digital book subscriptions, gym memberships, and eating out. Don’t cut out all entertainment or fun activities, because these can reduce stress and improve your health. But do make a list of those that most important to you. Then find creative ways to reward yourself without breaking the budget, such as renting books and movies from the library, exercising at home or outside with friends, having home binge-viewing parties with friends and sharing the cost, and packing your lunch instead of buying.
- Pay down debt. Make sure your monthly budget includes your minimum payments for any debt, including credit cards, student loans, and car payments. If you can, pay more each month to reduce your loan payoff time and the interest you will pay. You can also call your local credit union to discuss debt consolidation options.
- Use free online resources. There are many free online resources that can provide advice for managing your finances. YourMoneyFurther.com and AmericaSaves.org are two good ones where you can find more information on how to reduce debt, invest your tax refund, and save for a large purchase.
- Take a class. There are plenty of financial education classes available through your local credit unions, adult education centers, and higher education institutions. If you would rather learn at your own pace, consider picking up a financial literacy self-help book or taking an online course.
- Seek help. Sometimes, one-on-one help can be the most effective way to improve your financial situation. Reach out to a trusted friend or mentor, or your local credit union. Many of them employ certified financial planners or financial coaches who are happy to review your situation and provide guidance for meeting your financial goals.
Learn how Midwest Community can help strengthen your financial literacy and plan for the future by reaching out to us today.