Four steps to handling financial stress
The U.S. economy may be booming, but many Americans are stressed about their financial situation.
A new study by the FINRA Investor Education Foundation shows that more than half of the respondents say that their personal finances make them anxious and only 31 percent of Americans are satisfied with their financial condition.
Financial expert and “Everyday Millionaires” author Chris Hogan said there’s hope for those individuals who are stressing about their finances.
“People are stressed because they don’t understand what’s going on. They know they have real world things that are requirements for them financially, but they don’t have a plan,” he told FOX Business’ Maria Bartiromo on Tuesday. “The best way to get rid of stress is to have a plan and to understand the steps that you’re taking.”
The survey conducted by the nonprofit dedicated to financial education and empowerment had some upbeat news. Only one-in-five Americans experienced an income drop in the last year and half can comfortably meet their monthly obligations, according to the FINRA Foundation. When asked if they could come up with $2,000 in emergency savings in a month, 43 percent of Americans were certain they could, while another 22 percent said they probably could – an improvement since 2012.
“The cost of living is going to increase each year, so we’ve gotta get better. We’ve gotta understand what we need to do,” Hogan said.
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Despite Americans able to make ends meet, the percentage spending less than their income has stayed nearly unchanged over the last decade.
Hogan’s four steps in handling financial stress:
- Start budgeting today- that means you’re gonna tell your money where to go instead of wondering where it went.
- Get out of debt- when you get out of debt, you give yourself a raise which gives you more of an opportunity to understand what you’re attacking.
- Start saving for an emergency and build one up- this is a cushion between you and life, so if something does come out of the blue, you’ve got money to reach and grab to be able to take care of it.
- Invest for your future –when you have a plan and you’re following these steps, you gain confidence and you feel better about what it is that you’re doing.
How do you invest in your future and make sure your money grows?
“I want people to know what it is that you’re investing in. I tell people to look at growth stock mutual funds because we want the investment to grow over time,” Hogan said.