Bills Are Piling Up and Americans Are Freaking Out

As the Federal Reserve announced it is raising interest rates again, a new study shows that most Americans aren’t doing so well with their finances. In fact, 2 in 5 Americans struggle to pay the bills, and they are anxious.

Struggle To Pay the Bills

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The report found 69% of Americans have financial anxiety, and 2 in 5 are having difficulty paying their bills.

  • 30% are hiding their financial concerns from loved ones
  • 1 in 5 Americans consider themselves impulse shoppers
  • 1 in 4 admit to making risky financial decisions (1 in 3 have made a risky financial investment in the last year!)

The study from Play USA found 37% of Americans have 3+ cards, nearly half (47%)  can’t pay off their credit card balance each month, and the average person has $2,893 in credit card debt.

Despite this, 1 in 4 are not budgeting at all right now.

6 Steps to a Monthly Budget

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Creating a monthly budget can help get your financials under control and reduce the financial anxiety that many Americans are feeling. While budgeting cannot solve all your monetary problems, knowing where your money is going each month can help you create an action paly and help you close the gap between your expenses and income.

Choose a Budgeting Method

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There are various budgeting methods you can choose from, but the right one to use is whichever one you’re most comfortable with. You can consider a few methods: the 50/30/20 budget, the pay-yourself-first budget, and the zero-based budget.

The 50/30/20 budgeting method divides your expenses into three categories: 50% of your budget goes to necessary expenses, 30% to discretionary expenses, and 20% to savings and debt payments. A pay-yourself-first budget involves putting away a specific amount of your monthly income towards your savings first.

The rest is used for bills and other costs. A zero-based budget is where every dollar is allocated towards a specific expense. Your income minus your expenses equals zero each month.

Calculate Your Monthly Income

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Write down the monthly income that you receive from your employer. If you have other sources of income, such as social security or child support, add that as well. If you’re self-employed and your income varies a lot, use your lowest earning month in the past year as your baseline income.

List Your Monthly Expenses

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Use your credit card statements and bank statements to figure out what your expenses are. List everything you’ve spent in the last three months, including expenses such as rent, groceries, loans, and other costs.

Separate Your Fixed and Variable Expenses

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Once you’ve listed all your expenses, separate fixed and variable expenses, a fixed expense is an expense you pay the same amount for each month. This type of spending includes rent, mortgage, and car payments. Variable expenses change from month to month. A few examples of this type of spending include gas, eating out, and entertainment.

Adjust Your Spending To Stick To Your Budget

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After figuring out your income and expenses, you can determine how to adjust your spending to stick to your budget. How you adjust your spending will depend on your chosen budgeting method.

For example, if you’re following the 50/30/20 budget, and your discretionary expenses are more than 30%, you would find ways to cut those expenses until they amount to 30% of your budget. In this case, you might choose to eat out less or cancel unnecessary subscriptions.

Set Financial Goals

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With a monthly budget set, it can be easier to start setting financial goals to achieve. Short-term financial goals you might consider achieving are paying down credit card debt or building your emergency fund. Long-term goals you can achieve are funding your child’s education or saving for retirement. Keep all these steps in mind as you begin to create your monthly budget.

The IRS Adjusted Its Tax Income Brackets — Are You Ready?

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Have you heard that the IRS adjusted their tax brackets? The reason behind the IRS adjusting its tax income brackets for next year is tax consolidation, which aims to simplify the tax code. You might have already heard about it.

The IRS Adjusted Its Tax Income Brackets — Are You Ready?

Travelers Beware: 10 Most Dangerous Cities In The World To Avoid

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There are endless sources of inspiration for travelers nowadays, and with pandemic travel restrictions having been largely lifted, you can explore nearly every corner of the world. However, there are some places that you are better off avoiding- dangerous cities.

Travelers Beware: 10 Most Dangerous Cities in the World To Avoid

20 Legal Things That Will Probably (Hopefully) Be Illegal In The Next 20 Years

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In today’s modern world of legalities and regulations for everything, there are certain things that people are eager to see illegalized in the next two decades, despite the complex legal landscape or things people think will become illegal in America.

20 Legal Things That Will Probably (Hopefully) Be Illegal in the Next 20 Years

15 Things That Are Really A Scam But Have Been Normalized By Society

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Have you ever seen something that is so crazy and ridiculous that you are sure it’s a scam but is actually normalized by society? Do you know that society is being scammed, but everyone is just acting like it’s normal?

15 Things That Are Really a Scam but Have Been Normalized by Society

10 Crazy Myths About Women Men Actually Believe

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In our society, many myths and stereotypes exist about women. Unfortunately, some men still believe in these myths, even though they have been debunked time and time again. Here are some of the crazy myths that men believe about women.

10 Crazy Myths About Women Men Actually Believe

This post was produced and syndicated by A Dime Saved. 

Hi! I am a millennial mom with a passion for personal finance. I have always been “into” personal finance but got inspired to start my blog after a period of extended unemployment. That experience really changed the way I viewed my relationship with money and the importance of accessible personal finance education.