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More than half of Americans don’t expect their finances to improve this year. Hoo boy.
No light at the end of the tunnel
According to a study by Bankrate, 57% of Americans surveyed think their money situation will either stay the same (41%) or get worse (16%). I find it interesting — and probably not at all a coincidence — that this comes on the heels of a survey showing that half of American workers didn’t see a pay increase this year. (This includes regular pay raises, getting a higher paying job or a mix of the two.)
This is a problem since, as I point out a lot on here, housing prices, food prices and, often, insurance premiums/deductibles seem to rise each year.
Granted if you lead a good, frugal life, you can take some expense-inflation in stride. But even then it means less money toward savings or retirement, which is also problematic in its own right.
Of course, rising costs and stagnant pay are one of the main reasons we need to stop stigmatizing credit card debt. But even if you’re not in debt, a lack of a raise could put your finances at risk — especially if housing costs keep going the way they are (both in rent and house prices). One big emergency could wipe out savings (or put you in debt), and the thinner (or nonexistent) margin between expenses and income would make it hard or even impossible to replenish the account.
So what can workers do?
Well, they can ask for raises. There’s a plethora of advice online on the best ways to negotiate a raise. But the short form seems to be:
- Ask to schedule a time to sit down with your supervisor
- Explain that you believe you deserve a raise while:
- Clearly and unemotionally laying out all that you do for the company
- Highlighting the ways in which you increase profit and/or efficiency
If the company won’t agree or the raise isn’t commensurate with what the employee thinks they should get, then it’s time to look outside the organization and into other opportunities in their industry. (It should be noted that, from what I understand — having never job-hopped myself — this is actually a far better way to get a significant raise.)
Workers may be able to find affordable ways to beef up/add to their skill sets, such as classes through companies like Udemy (which is on Mr. Rebates). New skills will let them make a better case for a raise or make them more attractive to potential new employers.
If all else fails
If you can’t increase your pay, then you’ll probably need to see where you can trim the budget and — so sad that this is now a necessity for so many people — look into side hustles. There are also a lot of options out there both for lowering bills and finding extra work.
You may also find ways to pare down expenses or add side hustles, then use the resultant funds to build the emergency fund that so many Americans lack. Save in the good times (such as they are) to prepare for the bad, right?
And let’s not forget voting. Vote for your own interests. Get politicians who will really care about the situation you’re in — not just about protecting corporate interests and millionaires’ taxes. Obviously, I’m biased as to which party will do that (cough cough DEMOCRATS), but the choice is up to you. Just make sure you make your voice heard with a ballot.
I’m in a bubble
Taking a step back from the advice for a moment, I just want to say just how much these types of surveys remind me I’m lamentably very out of touch with the average worker.
My own financial situation has improved dramatically since the divorce, of course. It helps that I have a very generous salary. That’s partially thanks to a lot of overtime, but still…
Meanwhile, another $1/hour raise this year– seriously, at some point he’ll figure out he’s overpaying me — means that finances should be even better in 2020. Well, at least barring some major expense. (No whammy, no whammy, no whammy, no whammy!)
And in addition to all this, my mortgage is quite low. Not to mention the savings from the whole “having no kids” aspect. I obviously have mixed feelings about how that came to pass, but I have to admit that financially it’s been a godsend.
So yeah it’s utterly foreign to me that the average worker earns less than $50,000 a year and has many expenses higher than mine. With the aforementioned ever-rising costs — and often kids to pay for — I just don’t understand how most people do it.
Before we lecture them
We have to remember that it’s not just because, yes, some people indulge in new iPhones or the latest gadgets each year, but also because the rising cost just to live in this society as a so-called middle-class citizen (whatever you think that means) is threatening to outpace actual earnings. And that’s not helped when so many people aren’t seeing those earnings rise.
Yes, people who are struggling financially should cut back on some of their extraneous expenses. To an extent, most Americans live pretty cushy lives, far away from what we in the PF community would consider bare bones budgets.
But how much should the average person have to cut out of their life, how much should they have to scramble for new jobs or side hustles, before the blame stops being on them? How long before we look at the system as a whole and see that it has widespread issues perpetuating the cycle of debt — even for many people who are living financially-conscious lives?
So what’s the answer?
I’m not sure I know, honestly. And I doubt any politicians have it completely right. (Though as a knee-jerk liberal I obviously agree with some solutions more than others.)
So for now maybe we’ll just have to focus on getting Americans’ earnings up by asking them to muster up yet more grit and determination. Because in the end, whatever the problem causing the lack of funds, the fact is that you can’t save money you don’t have.
Did your pay increase in the past year? Is your financial outlook better for this year?