Feeling financially strapped lately? You are in good company. KeyBank’s 2023 Financial Mobility Study shows that Americans are in an increasingly difficult financial situation as we enter 2023.
The survey found that 55% of people have experienced financial problems in the past year, which is a significant increase from 2021, when only 37% experienced financial stress. Biggest concern? Stick to a budget when inflation sends prices sky high.
Some of this stress can be seen in the growth of consumer debt, especially credit card debt. Federal Reserve data this week showed that consumers increased their debt by $28 billion in November.
“After the rollercoaster of the past three years, Americans are becoming more aware of their financial challenges and looking for ways to improve their lives,” said Mitch Kime, vice president of consumer client development at KeyBank. “More people have experienced income loss, fewer are financially literate, and burnout is increasing among younger respondents. Given the current economic climate, it’s no wonder Americans want to take control of their finances.”
Personal finance advisors say that taking control of your finances is the best way to reduce financial stress. It starts with creating a budget. Even if you already own one, inflation in the last 12 months has probably made it unusable.
Start with your food budget. You may need to change your diet, at least temporarily, to eat more vegetables and less meat.
Take a close look at your expenses and find ways to reduce them. This may include cutting unnecessary expenses, such as eating out or subscribing to services you don’t use often, or negotiating lower bills and expenses that you have to pay.
Can you go six months without a streaming service? You might be surprised how much free content is out there.
Don’t be afraid to seek help. For example, the National Foundation for Credit Counseling can connect you with a nonprofit credit counselor who charges a minimal fee. There may be some useful services that can help.
ConsumerAffairs researchers have also compiled a valuable resource for consumers looking to improve their financial situation. We’ve collected verified reviews of credit counselors, debt consolidation companies, and debt settlement companies.
One of the best ways to pay off credit card debt is to apply for a balance transfer credit card that offers 0% interest for at least one year. Thus, the entire payment goes towards paying off the balance.
If your credit score needs improvement before you qualify, ConsumerAffairs also has many reviews of companies that can help improve your credit standing.