A new report by the Consumer Financial Protection Bureau show that about one in five Americans struggle to pay for life’s basic needs to include food, shelter and medical care. It further states that while roughly one-third of consumers have a hard time making ends meet.
The research asked respondents 10 questions that were answered on a scale of 0 to 100. About a third had scores of 50 or below meaning they would have a high probability of not being able to make ends meet. A similar number of respondents scored above 61 meaning they were unlikely to face financial struggles. The remaining third fell in the middle meaning they were between financial security and financial hardship.
Financial Well Being
I see this daily with my discussions with clients about their financial struggles. They may have to choose to pay either their rent or buy food in some cases. Many make it from payday to payday. If an unplanned expense arises, they rely on high risk lenders and fall further into a financial trap.
- Can you meet your current and ongoing financial obligations?
- Do you feel secure in your financial future?
- Are you able to make choices that allow you to enjoy life?
If so, you have financial well-being.
If not, how can you reach financial well-being?
While making more money or cutting expenses can help, the researchers found that knowledge helps the most. Those who have a higher financial know-how appear to have strong and positive relationships with financial well-being according to the report. The research also showed that people who learn how to invest well and make saving money a part of their regular plan have a better chance of reaching financial well-being.
The first step of taking control of your finances is to take responsibility for it. Know who you owe, what you owe and create a budget so you control where you spend your money every month. After you take control of your basic needs, you will need to examine where you are spending your money each month. Are those extra expenses necessities or could you live without them? Finally, reach out to discuss your finances. One of our Bond & Botes attorneys would be happy to discuss your financial situation and help put you on the path to financial security.