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Two years of high inflation has soured Americans’ view of the economy. Read on to find out how to improve your financial situation. [[{“value”:”
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America has thankfully avoided a recession that once seemed all but inevitable. But two years of rising inflation and aggressive interest rate cuts that have driven up the price of debt has taken its toll on many Americans.
A recent Pew Research Center survey found that 31% of Americans say that economic conditions are “poor,” and an additional 41% say that they’re “only fair.” This is in stark contrast to the remaining group of Americans who label the economy as excellent or good.
Here’s why a majority of Americans don’t have a favorable view of the economy and what you can do to help get your personal finances back on track.
Why so many people don’t feel great about the economy
There are many individual reasons why people feel bad about the economy, Pew found, including someone’s political leanings or socioeconomic status. But of the 72% of respondents who said the economy isn’t doing well, their top three reasons for feeling this way were because of:
High inflationHigh cost of livingLack of well-paying jobs/low wages
While inflation has cooled, it’s understandable why so many people are still concerned about it. Inflation is growing at a slower pace — 2.8% in February, using the Federal Reserve’s preferred gauge — but the rise in prices over the past few years has made everything more expensive.
Consider some of the cost-of-living increases recently:
Americans now spend an average of $779 per month on food, up 13%.The average selling price of a house increased nearly 24% over the past three years to $417,700.The average transaction price for a new car is $47,244, up 14% from three years ago.
So, that’s the bad news, but the good news is that there are a few steps you can take to help improve your personal finances.
How to help improve your financial situation right now
Getting yourself out of a financial hole is difficult, but there are some practical ways to make incremental improvements. Here are a few ways to start moving in the right direction.
Start an emergency fund
Most experts recommend having a minimum of $1,000 of cash in an emergency fund to help cover unexpected costs like a car repair, medical bill, or house repair. If you can’t reach that amount, try to put as much as you can spare into a savings account every month. The more you have saved, the less you’ll rely on credit cards or other loans to help cover unplanned expenses.
Consider a balance transfer card
These can be tricky if you’re already in debt, but they can also help you catch up on payments. Many balance transfer cards offer a 0% promotional rate on balance transfers for a year or more. Signing up for a balance transfer card could help you lower your interest rate while you work to pay off debt.
Talk with a professional
When you’re in a difficult financial situation, having an extra set of eyes on the problem is helpful. A financial advisor can help you devise a plan to pay off debt, create a budget, and get your finances in order. The National Association of Financial Advisors’ website can help you find fiduciaries who are legally obligated to work in your best interest.
Find some gig work
I know what it’s like to have stubborn credit card debt, and I recently picked up additional freelancing work to pay it off. About half of Americans have a side hustle, and there are lots of great work platforms to help you get started. While they won’t make you rich, the average side hustle generates about $9,720 annually.
Ask for a raise
If you’ve been in your position for a while and your responsibilities have increased, it may be a good time to ask for a raise. Some estimates put the success rate of receiving a bump in pay after asking at 70%.
Focus on what you can control
Not all of the above suggestions may apply to your individual situation. But the thing to remember is that doing one or two of them could be a small step in the right direction. Identifying what you can control when unexpected financial circumstances happen will help you know which steps can help you get back on track.
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