We hear about the economic crisis so much nowadays that it feels like it will never go away. Many of us have been struggling with money for quite some time now, and it seems like things are just getting worse. According to new research there are now a lot of things most Americans now cannot afford (yes even with the huge 2008 crises almost 7 years behind us!). Let’s take a look at the things that people are struggling with the most, including ways that will help you to be able to afford them in the future.
1. New Cars
There are very few people in America who can now afford to buy a new vehicle, whether that be a car or a truck, nowadays. If you look at the prices of new cars, compared to the average income in the US, it shows that they’re no longer as affordable as they used to be. The average price of a new car is around $32,000 which is very close to the yearly salary for most middle earning Americans. This means that even financing a car can be difficult.
Luxury vehicles are even harder for people in America to purchase, with many having to settle for cheaper family cars. Even if you think you can afford to buy a car on a monthly financing option, you should always check to see that this really is affordable. Work out all of your incomings and outgoings on a monthly basis, then compare this to how much a car would cost you a month. Don’t forget to add extras you may need, such as insurance, fuel and repairs. If you’re finding it difficult to purchase a new car, have a look for secondhand vehicles instead. It’s a well-known fact that cars depreciate in value very quickly, so you should be able to get a good deal for an older vehicle. Put some money aside each month for a new one, then use it to pay off a big lump sum when it comes to buying, this will leave you with smaller monthly payments long-term.
2. Family Vacations
There was a time when most Americans could afford to take their family on long and luxurious holidays, even if that was just to another state. Nowadays, more and more people are resigning themselves to taking mini breaks, if they even have a vacation at all. It has become difficult for people to go away for long periods of time, unless they sacrifice another luxury in their life. Many people now cut down on their trips to the movies or going out to restaurants, just so they can save up to go on vacation. It seems as though we’re constantly having to sacrifice something, in order to just have a nice time away with our families. There are clever ways of getting cheaper deals and being able to afford vacations, however. Having a coin jar in the home is one of the ways many of us will save up for a vacation, ensuring we put all of our spare change in the pot. You should also look out for holiday deals which happen during the slowest periods of the year, such as the winter. You can get yourself a vacation for a fraction of the price if you book when most people don’t even consider going away. Perhaps settle for a vacation every other year, to make sure you can save up enough money for something truly spectacular; instead of camping in your back garden. It’s important to take time out from everything, so make sure you do go away as much as you can.
3. Investing Money
We have always been told to invest money, so that we can reap the benefits at a later date. The stock market, property and other financial investments have completely slowed down in America now, as nobody has the finances to be able to invest. The fact is, if you’re spending every last penny you have on your lifestyle, then you’re not going to have anything left over to gamble with. After all, investing money is seen as an investment. However, if you want to drag yourself out of a financial slump then investing may just be the way to do it. In the midst of an economic crisis things such as housing prices fall, which is the perfect time to invest. When the economy picks itself back up, the prices will rise, everyone will want a house, and you’ll be able to sell for profit.
Try starting small on the stock market, to try and build up a good investment portfolio. Set aside a little bit of cash, say $1000, that you can use to invest and keep building on. You may want to enlist the help of a financial adviser, to make sure you’re doing it right. Before you know it, that $1000 has doubled, tripled or even quadrupled. You’ll then have enough money to invest in property and make a fortune when the economy booms again! Investments are a great way of securing your future, as long as they are done right. Do your research before investing a ton of money, however!
Just like investments, we have always been told to save as much as possible. Whether it’s for a rainy day fund or for when we eventually get round to retiring. It’s good to have emergency savings in case the worse were to happen, but it seems as though nobody can afford to do this nowadays. According to a recent survey, only one in four families have a six month emergency fund saved up. Many of these people were earning a higher income than the average American too, so they probably have the ability to do so. What’s also worrying is the lack of people with a retirement fund, with around 20% of those nearing the age of 65 having saved nothing.
We can’t stress enough how important it is to save, but we also know how difficult it can be when money is tight. Depending on how strict you are with yourself, you can try to build up savings one of two ways. The first is to transfer any spare change you have in your account into a savings account, in order to watch it slowly build up. Say you have $244.39 left in your account, try transferring the $4.39 into savings. Check your bank every day and get rid of all that spare change. The second option is to set up a monthly arrangement where your bank takes a certain amount from your checking account and puts it into your savings account. Whichever option you choose, make sure you stick to it!
5. To Pay Off Debt
According to a US debt charity, more than 160 million Americans have credit cards. It’s thought that each household with a card is also in around $15,000 worth of debt. And those debts are rising, as more people take out new credit cards in order to afford to survive. When funds get tight at the end of each month, it is too easy to grab your credit card and put all of the food shopping on it.
It’s not just credit cards that are causing debts though, it’s student loans, medical bills, mortgages, car finance and everything else. In fact, it’s estimated that most Americans will soon be in more debt than they actually earn. People are finding it too difficult to pay off their debt, which is causing some serious problems. This can then cause depression and anxiety, with the worry of debt collectors turning up at the door. It’s important that you don’t hide from any debts you have, and do what you can to pay them off. Many finance and credit companies understand that people are struggling to pay, so try giving them a call. If you explain your situation they may be able to help you with a monthly plan that can wipe the debt off. They may even hold the interest rates on your credit cards or loans, too. Don’t stick your head in the sand when it comes to debt, as things will only get worse when left. Make a plan to get out of debt, as soon as possible!
6. Full Insurance
We all know the importance of having full medical insurance, full vehicle insurance, full house insurance and full life insurance. The problem is, that none of us can afford it right now. Many Americans are forgoing insurance in place of being able to afford food and other necessary items. This means that if anything were to happen where we would need insurance, we end up paying for it. It is a vicious cycle that’s causing problems for everyone around the US; but many people don’t know how to get out of it.
The first thing to do is shop around for the best insurance deals, on the types of insurance you desperately need. We’d suggest vehicle insurance if you have a car and definitely the best medical insurance policy you can afford, at the very least. These two are the most important and could potentially save you a fortune in the long run. Although you may have to sacrifice something else, such as that trip to the movies or new clothes every season, you’ll thank your lucky stars if you do ever need to use it. Instead of paying out thousands of dollars the next time the car needs work, you’ll have insurance to cover it. Treat it like a savings account, which can only be accessed when there is an emergency. The little bit you put aside each month will far outweigh whatever you may need to use the insurance for. And if you don’t use it? Well, at least you were covered!
7. Medical and Dental Care
This is one of the most scary things about the economic crisis; people can’t afford for medical and dental care anymore. Medical care is certainly seen as a must-have and something that people on a middle income should definitely be able to afford. However, this now isn’t the case and that’s a worrying fact. Even those with insurance policies have had to pay out huge premiums, co-payments and other types of co-insurance. A shocking report shows that 66% of families face the decision whether to pay for medical care or food, with 31% saying they have to make this decision every month.
The same applies to dental care, with many people not even bothering with it anymore. Research shows that people would rather just live with toothache than pay out to see a dentist. This is horrific and something which needs to change. Unfortunately, many people are doing all they can and this is therefore something that can only be changed by more prosperous times. It is always worth talking to your employers, however, to find out more about the medical insurance packages they offer. You may find you’re best off going it alone with a cheaper company, instead of paying huge premiums through your employer. Make sure you do your research and find out most cost effective way you can receive the medical and dental care that you need. Remember, you’re not alone in this and there are also many charities who are helping those in need of medical support.
8. Organic and Healthy Food
It seems like every news story is telling us to eat healthier and that we’re an obese nation, but yet the cost of organic and healthy food is on the rise. Everyone wants us to eat healthier and more organic, but most families can barely afford to eat full stop. Those on middle incomes are finding it difficult to be able to enjoy the food they might have done, several years back. With wages not moving anywhere and organic food getting pricier, many people have resorted to living off junk food and cheap deals. All supermarkets seem to have incredible offers on chips, chocolate, microwave meals, frozen pizzas, and all the rest of it, but their fruit and veg section remains deal-free. The best way to combat this is to keep an eye out for coupons that have selected healthy food on offer, whilst also planning your food for the week ahead. Make the most out of leftovers by making a menu for the week (there’s plenty of useful online resources to help with this, that even include recipes for leftovers). You’ll find that if you can use up leftovers and plan plenty of home cooked food then it won’t be as expensive as you once thought. Yes, it can take a little more planning and preparation than usual, but the end result will be plenty of healthy food for you and your family. This also means less potential health problems, which is a win-win on both accounts.
9. New Gadgets and Technology
Every day there’s a new gadget being released, or brand new technology hitting the headlines, but most Americans can no longer afford to buy it. Even those who are making an average wage in the US are still having to wait until prices have been dropped, before buying any new gadgets or technology. With things such as the iPhone 6 recently being launched, sales have dropped in the hardest hit areas of America. This is because people can no longer afford to have a new gadget as soon as it has been released, instead having to wait until the next generation comes out and prices go down. In the age of technology this can be very frustrating for people, as we’re always told to have the latest this and latest that. It especially hits younger people hardest, who may see friends at school with all the newest technology. Our advice is to wait for these new products to be put on special offer, around big sale times such as Black Friday or after Christmas. You may be a couple of months behind everyone else, but you’ll get it for a much better deal. Set aside some money each month for your new gadgets, so that you’re ready as soon as the next generation of something is released. Also, take advantage of great monthly contract deals from cell phone networks, or keep your eyes peeled in places such as Walmart and Amazon for one-off price drops. Never buy the day something is released, as you’ll end up out of pocket.
10. Treats for Ourselves
Lastly, many Americans can now not afford to treat themselves every once in a while. We have already seen that people have had to make sacrifices just to be able to afford a vacation every few years, or even to pay for their medical bills.
It seems as though the thought of treating ourselves was something reserved for years ago, not something we do now. People no longer go to the movies or go out to restaurants for dinner with their loved ones, people have stopped going to bars with friends or bowling on the weekend. Everyone is getting reduced beauty products, haircuts and products. No one is thinking, “I’ll just treat myself to that today”, because it seems so unaffordable. However, it is vitally important that we treat ourselves once in a while.
After all, we work to live we don’t live to work. There are tons of ways you can treat yourself on the treat, whether that’s by taking a picnic down to the local park or making your own face masks. You don’t need to spend a fortune in order to give yourself a break once in a while. Despite all of the money problems that you may be going through, make sure you step back and indulge in some ‘me time’ when you can. Not only will it make you feel better, but it will also help you to focus on the important things in life too. We all need that, every now and then.