Most Americans have been feeling economic pains. Whether it’s the grocery bill, gas prices, rent, the housing market, or the high cost of used cars, it hasn’t been easy—with no sign of it getting better quickly.
According to Forbes, a recent survey by Fidelity’s eMoney Advisor found that Americans’ number one concern is currently the cost of gas prices, which have surged. Meanwhile, COVID-induced supply chain issues have led to rising inflation. While it might be harder to pay the bills right now, managing your money wisely can help get you through the tough times.
Here's how you can manage your money during an economic downturn:
- Now is the time to get your budget in order. Knowing where your dollars are going each month makes it easier to cut back and eliminate unnecessary expenses. To help maintain your budget, plan as much as you can. Make a grocery list before you head to the store to curb any extraneous spending and consolidate errands to lessen your pain at the pump.
There are different methods of budgeting that can help, as well as apps you can download to your phone—making it easier to manage your money at home and on the go.
- While it’s important to make sure you can pay your bills on time each month, designating money to your savings is an important component to healthy money management. It’s recommended that 20% of your monthly income go toward savings, but if this isn’t feasible, put away what you can. You’ll have money to fall back on if necessary while also investing in your future.
- Pay down your debt. Because it’s tax season, it might be tempting to take your return and spend it on home renovations or a vacation, but the smart choice is to apply it to your debts. The less debt you have, the more dollars you’ll have for your savings and everyday expenses.
However, if you’re struggling to pay your bills on time, it might be time to consult a credit counselor. During your appointment, your counselor will help you build, or tweak, your budget. They may also recommend enrolling in a debt management plan. If you qualify, the counselor will work with your lenders to lower your interest rate and consolidate your loans into one affordable monthly payment, so that you can pay off your debt in three to five years.
While it may seem like a struggle right now, if you manage your money wisely and seek help when you need it, you will find yourself more financially stable and without the crushing weight of debt.