Americans are experiencing financial stress from many different angles these days. With U.S. inflation numbers reaching a record high of 9.1% in the summer of 2022, chances are high that you’ve felt financial pressure too. From rising gas and grocery prices to higher rents and declining savings balances, the economic realities that many Americans are facing can start to feel overwhelming.
The good news is that even when funds are tighter than usual, you may be able to find ways to make the situation more manageable. Below are four helpful strategies that could help you cope with the financial stressors you are encountering in your own life.
Financial stress can often feel debilitating. Yet one of the best ways to change (and hopefully improve) your situation is to take action.
If you find yourself in an uncomfortable financial spot, Winnie Sun, Managing Director, Sun Group Wealth Partners, offers some simple but powerful advice. Sun says, “Control what you can control.”
Sun gives several examples of actions you can take to try to regain control of a financial situation that is causing you to feel uncomfortable.
Tip: If you’ve never created a budget before, these budgeting guides from Self could be a great place to start.
Despite the increased financial pressure you may be under at the moment, now is not the time to neglect paying important bills — especially bills which may impact your credit history and credit score. Late payments have the potential to remain on your credit report for up to seven years. As a result, you may want to consider setting up automatic drafts as a backup for each of your credit obligations.
You probably shouldn’t neglect your credit-building accounts either, like credit builder loans. Doing so might delay or perhaps even set back your progress. Having good credit remains important in the current economic climate — perhaps more so than usual since interest rates and overall borrowing costs have been trending upward in recent months. Good credit, after all, has the potential to save you money on interest rates with future loans, credit cards, and more.
And, of course, you’ll want to stay on top of bills for essential needs like rent and utilities. As an added bonus, you might be able to get credit for your good payment history on these accounts by using a third-party service like Level Credit.
There’s no question that cutting expenses is important when you’re feeling a financial pinch. But adding more money to your budget could also be an effective way to help combat the financial stress you’re experiencing.
Below are a few potential ways you might be able to generate some extra cash.
Don’t be afraid to involve your partner, spouse, and even your children (if you have any) in your plan to tackle financial stress. “If your kids understand your financial struggles,” says Sun, “they can help find creative ways to save.”
When the whole household works together toward a common goal, you may have a better chance of success. At the very least, being open with the people who are closest to you about your financial struggles can provide you with an outlet to help you cope with the stressful emotions that are often associated with money-related worries.
Michelle Lambright Black is a nationally recognized credit expert with two decades of experience. She is the founder of CreditWriter.com, an online credit education resource and community that helps busy moms learn how to build good credit and a strong financial plan that they can leverage to their advantage. Michelle's work has been published thousands of times by FICO, Experian, Forbes, Bankrate, MarketWatch, Parents, U.S. News & World Report, and many other outlets. You can connect with Michelle on Twitter (@MichelleLBlack) and Instagram (@CreditWriter).