Health, Wealth, Divorce, and Death by the Dollar
More than half of the U.S. is struggling with their financial security. Here’s how you can get yourself above water and build margin in your budget.
New Reports Say 61% of Americans Are Living Paycheck to Paycheck
Inflation has made a lasting impact on the U.S. economy and around the globe.
Families who were struggling before the rapid increases for the costs of common goods like food, shelter, and toilet paper feel even more burdened and stressed out today.
Financial stress doesn’t just impact your wallet but it puts a real strain on your mental health, emotional wellbeing, and your relationships at home and work alike.
Money is widely known as one of the leading causes of divorce in America.
It’s estimated that financial problems contribute to 20–40% of all divorces. That means that for every 10 marriages that end in divorce, four of them are because of money. Not every person sees money the same way. Not every household has a developed financial system designed for sustainable wealth and security. According to a survey from Ramsey Solutions, fights revolving around money are the second leading cause of divorces in the U.S., with infidelity being the leading cause.
For many families, they cannot take on any new unexpected financial expenses. According to Bankrate, 57% of Americans cannot even afford a $1000 emergency expense. If you need a new water heater, air conditioner or furnace, washer or dryer, or an emergency repair on a vehicle that you rely on to take you to and from work so you can actually earn an income, $1000 doesn’t buy as much as what it used to.
Food prices spiked with an average rise of nearly 10% through this inflationary period with some foods costing much more, such as the unexpected surge in egg prices in 2022. Over the last 12 months through June 2023, consumer price index changes show increased prices for Food (5.7%), Transportation (8.2%, Shelter (7.8%). Hopefully, the decrease in Energy prices (-16.7%) has helped alleviate some of the financial strain felt from several other areas of daily, weekly, and monthly expenses for families.
Recent polls and reports have told us that 61% of Americans are living paycheck to paycheck — meaning they are barely making ends meet while their monthly income and expenses nullify their bank accounts. For people spending 40–60 hours at work each week without seeing their wealth truly grow, this can feel exhausting, suffocating, depressing even and lead to burnout.
Budgets have been squeezed.
Wallets have been emptied.
Nearly half of Americans (44%) continue to struggle paying for quality healthcare that they depend on, some people being unable to pay for needed medical treatment or even skipping medication due to the cost over the prior three months. Healthcare costs prevent people from getting the care they need as it simultaneously puts them at higher risks for stress-related health effects such as poor sleep, higher blood pressure and more as the cost burden looms over their heads without remedy.
Americans as a whole still owe billions of dollars in medical debt each year, while the healthcare cost burden to the country continues to rise beyond $4,000,000,000,000, which accounts for almost 1/5th of the country’s annual GDP. According to polls completed by the Kaiser Family Foundation (KFF), high healthcare costs disproportionately affect uninsured adults, Black and Hispanic adults, and those with lower incomes.
ou’ve probably thought before, “There’s got to be a better way.”
And I have news for you, there is.
This doesn’t have to be your diagnosis.
This doesn’t have to be your destiny.
Yes, you can in fact take a leading role in your financial future. You do not need to be self-critical or ashamed by any financial hardships through your journey of life. We each go through stages and phases of life.
Here’s how you can transcend the weekly grind of living paycheck to paycheck and finally get ahead. Let’s dive in!
Build a Better Budget
Yes, this may sound like common sense but many people do not track their spending habits like they should. I know friends of mine who were shocked to learn that they had spent a whopping $6,000 on delivery food for the quarter without taking the time to keep track of their spending habits. I understand that cooking at home can feel uncomfortable or estranged for some people, but you can save thousands of dollars a year by simply cooking and eating at home more.
As the famous management guru, Peter Drucker reported, “What gets measured gets improved.” You’ve also likely heard it said that we measure what matters to us. If our health matters to us, we start tracking measurements used to assess our overall health and vitality. The same is true with our wallets. If we need to take our finances under a microscope we will gain greater insights for how we can easily move the needle in the right direction and improve our financial wellbeing. Take the time and build a better budget, you’ll be glad you did. Go back to it every month or every quarter for the first 12 months as you develop healthier habits around saving and spending.
Grab Your the Scissors and Start Cutting
My friends that I mentioned above went from spending $6,000 a quarter on food deliveries to cutting back their spending to include no more than $5,000 a year in delivery. This left them with a budget of around $400 per month for eating out — using monthly metrics like this make it much easier to track and measure progress towards budget goals.
Maybe you have a handful of scarcely used subscriptions for various forms of media between watching movies and television, computer software, application subscriptions on your phone or your kid’s ipad. Take a closer look at your monthly subscriptions and start cutting. You probably don’t need 5 entertainment subscriptions for everyone in your home to be happy. You’ll do just fine consolidating those subscriptions to 1–2 each month and consider making a bi-annual rotation if you need to switch things up.
And since you already have the scissors out, grab a local paper and the junk mail flyers you receive in the snail mail. You’ll likely find several coupons for common household products you can use this week — things like milk, eggs, cheese, toilet paper, laundry soap, and toothpaste.
Inspect Your Insurance Rates
This one may take some time to get to the details of your potential offers but many people sign up for insurance and forget about it. We hold multiple policies without ever going back to our agent to reevaluate potential cost saving opportunities. Can you add a good-driver discount or a 5-year loyalty customer discount?
Ask your agent about any cost savings available by packaging your policies together or consolidating separate insurances under one roof. It’s likely that you can generate a few hundred dollars of savings each year. Do some shopping around to find the best rates.
Double Down on Your Debts
Whenever possible try to make extra payments on your highest interest loans. One of the most frustrating things in finance is to see someone paying 100–200% in interest for a big purchase over the course of decades. This can keep you swimming in water for many years without ever getting a chance to dry off interest free. You will save thousands of dollars on interest if you can slowly chip away to add extra payments to your debts.
If you have 3 lines of credit and your credit card rates are 2–3x the interest rate on your car, home, or personal loan rates then never let yourself overspend on credit cards. Always pay them off at the end of the month with an automatic withdrawal from your checking account, but make sure to budget those purchases in so you don’t overestimate how much money you really have until the end of the month when the cards are paid off.
Start a Side Hustle
Everybody’s doing it, so why not you? After studying side hustles and online business for the last several years, I can confidently say that you can make money doing pretty much anything you want. And in our current economic era, there are countless ways to make a few extra bucks each month to give you a financial hedge (and an extra boost of dopamine to keep you focused and motivated).
Sign up to be a driver if you have a car. Team up with someone who does have a car and sign up as a grocery delivery specialist with third-party apps servicing your local grocer. Every superstore and grocery market seems to have delivery or car-side pick-up options available these days.
You can always go knocking on your neighbors doorstep and ask if they have any extra work they could use some help with around the house. Go to the richer neighborhoods, nicer housing editions, and dress well. Offer to clean gutters, mow lawns, carry boxes up and down stairs… anything. You can serve others while being served a handful of cash in return.
Get Ready for Retirement
Along with taking extra dollars and putting them towards paying off your debts, you can also consider including a few extra funds for your retirement. There’s a few reasons why you might want to think about your retirement. For one, the earlier you start saving or allowed to begin your retirement investments, the more time the money has to grow with compound interests. So even if you can only save a small amount each month, it will add up over time. If your employer offers any sort of % match to your 401k allocations then this “free money” offer is definitely something you need to think about for the better budget you are building.
Another reason why I wanted to mention retirement is because I have seen so many people in just my local area alone who have had to step out of retirement to go back to work because of unexpected and extra expenses that have accumulated in their late years.
If someone wants to go back to work to be able to pursue an appropriate lifestyle design that makes sense for them and it helps them feel good about the work they contribute to in the world, that's wonderful. I just don't want anyone to have to feel like they “need” to go back to work out of a place of fear, scarcity, or financial hardship.
Health Yourself
In 1860, Ralph Waldo Emerson penned the phrase, “The first wealth is health,” and I’ve also heard this phrase expanded to “… and if your health is taken away it is the only wealth you seek.” Maybe you can relate.
I don’t know your current state of health and wellness but I can fully attest to the fact that Americans spend a lot of money on healthcare each year as we looked at above. One of the best returns on investment you can find is when you take the time to invest time and attention in your overall health. The better you feel in your body and mind, the better you can perform at work, at home, and in relationships.
The healthier you are, the lower your cost burden will be for healthcare expenses and likely you will reap a lower cost involved with your health and life insurance policies as well. Want to reduce your medication expenses and medical bills by supporting yourself through diet and lifestyle medicine? I might know a guy. I’ve often said that real health and healing happens in the household. Healing doesn’t live in the hospital. These are lifelong benefits you stand to gain by taking the time to develop healthier lifestyle habits for you and your family. Health yourself. Save money and save your health.
Be Patient & Don’t Give Up
Financial security takes time and effort. It will feel difficult at first when you start to cut back on things you used to enjoy, but in time those changes will feel like real healing to your financial needs. Remember, life happens to all of us. Unexpected expenses come up and accidents happen. It’s important to set aside an emergency fund for that $1,000 unexpected expense in time so you don’t lose your mind when life hits you hard between your paycheck and your bank account.
There will be setbacks along the way, but don’t give up on your goals. Keep working towards your budget goals and iterate along the way as life’s needs and resources change with you. If you remain patient, determined, and disciplined you will eventually reach a place of margin where you can breathe better with your head above water. Once you have that margin, it will make your life that much easier to plan, prepare, and propel you forward in your financial future.
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