The most recent economic recession left millions of American households struggling to hold their finances together. While a solid financial plan can help this process, some families still struggle to make ends meet. If you ever find yourself in this situation, you may be able to use a signature loan even with bad credit to keep your head above water. According to a recent survey conducted by the Consumer Federation of America and the Certified Financial Planner Board of Standards, nearly 38 percent of households currently live paycheck-to-paycheck as a result of economic hardship. Meanwhile, just 30 percent of respondents claim they are comfortable with their financial standing.
In contrast, when the survey was conducted in 1997, only 31 percent of respondents said they were living from paycheck-to-paycheck.
Specifically, income level differences and poor money management skills are believed to be responsible for this rift. As it stands, a majority of Americans making less than $25,000 per year don’t have a comprehensive money management plan and struggle to make ends meet every month. Meanwhile, many households making between $50,000 and $99,999 per year that have financial plans are able to put at least 10 percent of their incomes into savings.
Many Unprepared For Retirement
Planning for retirement is also a serious concern for many Americans. In 1997, roughly 38 percent of Americans were behind on their financial plans to leave the job market. Now this share has grown to 50 percent.
Since life expectancy rates are much higher than they were in the past, this has forced many Americans to save earlier and stay in the job market longer. In fact, only 34 percent of respondents said they will have enough saved to retire by the age of 65, even though the amount of households with retirement investment plans in place has remained close to 50 percent since 1997.
Nowadays, the average American spends close to 20 years in retirement, so it’s a good idea to start planning now.
Never Stop Saving
The best thing about putting money away sooner rather than later is that it gives your finds time to grow and mature. If you’re just starting out, make small monthly contributions to a retirement fund, and increase this amount as your income level improves, advises the Department of Labor.
Meanwhile, if you’re already good about putting money away, be sure to keep it up. Further, do all you can to refrain from tapping these funds until you leave the job market.
Know Your Needs
The average American will need about 70 percent of their pre-retirement income to maintain the same lifestyle after they stop working. However, those who make less may need closer to 90 percent.
If it seems like you won’t be able to meet these requirements, consider making some changes to your lifestyle. For example, if you live in a home with expensive monthly payments, consider downgrading to a smaller property or one located in a state with more affordable property taxes.
Include Social Security
While the Social Security withholdings on your paychecks may be a burden now, when you leave the job market this program will work in your favor. Social Security pays retirees close to 40 percent of their annual income. However, just because this will help once you retire doesn’t mean you should stop saving.