If you’re feeling financially stuck, you’re not alone. According to a report from the National Foundation for Credit Counseling, 53% of U.S. adults feel that despite their best efforts, something always happens to set them back financially, making it challenging to get ahead—with 48% of respondents reporting that they feel like they’re constantly trying to stay afloat financially.
Additionally, 57% of respondents said that uncertainty in the U.S. economy makes it impossible to achieve long-term financial goals. If this sounds all too familiar, getting prepared for financial uncertainty can help you get back on track—or get ready for an unpredictable market.
Determine the Essentials
Knowing where your money goes each month is a critical component of getting on top of your finances. Make a list of your essentials, including rent, mortgage, auto loans, food, as well as non-essentials, like streaming subscriptions, entertainment, and dining out. This helps you identify areas where you can cut back on entertainment and non-essential spending while gaining a clearer picture of what it costs to cover your essential needs each month.
Prioritize Debt
If you have debt, prioritizing it by penalty or interest rate can help you get a plan of action in order. Struggling to pay back credit card debt can be stressful, so talk to your lender. You may be able to enroll in a hardship program or request forbearance, which pauses or reduces your payments temporarily. However, be aware that your interest may still accrue during this time. Strategic methods of repayment include the snowball method (pay off your smallest loan first) and the debt avalanche (pay down the debt with the highest interest rate first). You should of course continue to pay minimum payments on all other loans.
Start Saving Now
Building an emergency fund can help you weather even the hardest financially challenging times. It’s also important to be thinking about retirement. Putting a percentage away each month ensures you’re steadily building a cushion for the future. Experts suggest the 80/20 rule, which recommends putting 20% of your income toward savings and debt repayment while using the remaining 80% for living expenses.
Get Financial Guidance
Seeking support through financial counseling can help you take better control of your life. Whether you need budgeting help and guidance, or are looking for a way to get yourself out of debt. Credit counselors through nonprofit, certified credit counseling agencies can help you with all of this, including enrolling in a debt management plan (DMP). With a DMP, your credit counselor can work with your lenders to combine your credit cards into one monthly payment while reducing your interest rate, making it easier to pay back your credit card loans.
Bottom Line
While you can’t control the economy, you can control your approach. Understanding what’s essential, managing debt, and building savings can help you face uncertainty and move toward long-term financial stability.