A new study has found that a record-breaking number of workers spend more than they earn. Rising inflation and major interest rate hikes are hitting people everywhere, from the grocery store to their mortgage payments.
Today, a quarter of working adults now live paycheck to paycheck, and 11% of workers spend more than their after-tax pay. It’s an unsustainable position to be in, and it can cause a great deal of financial anxiety.
These are five things you can do to improve your financial situation and control financial stress.
#1 Take Control of Your Discretionary Spending
Discretionary spending is one part of your budget that you have more control over, and it’s the easiest part to rein in when you’re spending more than you earn.
This is what you spend on non-essentials like dining out, entertainment, and hobbies. Even things like groceries or clothes can fit into this because you have wiggle room to spend less depending on the brands and stores you go to.
Create a list of priorities when it comes to discretionary spending and fit your budget within it. You may find you have room to indulge in one thing if you can give up the other. For example, you may be just fine to go out for dinner a few times one month, as long as you think twice about that new handbag.
#2 Sell Old and Broken Jewellery
There’s no better cure for financial anxiety than a bit of extra cash. Getting a cash injection through payday loans or relying on credit can be even worse for your financial health. The interest rates will make that cash much more expensive in the long run, and they can cause lasting damage to your credit rating.
Instead of borrowing, why not raise cash from selling valuables that you no longer wear? Even broken silver jewellery can be worth something, as silver buyers are interested in the precious metal content, not the design of the jewellery. Research places to sell your silver nearby to get some quick cash.
#3 Focus on Paying Down High-Interest Debt
It’s expensive to have debt. High interest rates mean that you’re paying the lender and getting nothing in return. You’ve already used the money you borrowed, and now you’re paying extra for it.
Consider reorganizing your debt payments so that you can focus on high-interest debt first, including your credit card bills. Keep making minimum payments on other types of debt while you put all the extra cash you can toward one account.
#4 Eliminate Non-Essential Bills
If you can’t keep up with the cost of essential bills, it may be time to start canceling subscriptions, whether that means magazines, newspapers, cable, or streaming services. One trick you can use with streaming services is to rotate through them every few months. There’s usually no up-front cost or installation fee, so once you’re caught up on all the new shows on one service, cancel your subscription and sign up for a new one.
#5 Consider a Balance Transfer
If interest rates are weighing you down, consider looking at a balance transfer credit card. Some credit cards will offer 0% interest rates for a limited time (i.e., 6-12 months). This can be a huge relief on high-interest credit card balances and save you a lot of money. Just make sure you keep aggressively paying down the interest. It’s a great opportunity to pay down the principal directly.
Don’t let financial stress and anxiety run your life. Try these five tips to get financial stress under control.