What have you thought about most today? If your answer is “money,” then you are in good company, according to a GoBankingRates survey.
A study aiming to look into the American mind revealed that U.S. citizens think most about money on a daily basis, followed closely by thoughts about work, according to
the survey. Approximately one in three Americans report that daily thoughts of money and work are more prevalent than those about vacations, politics, health and fitness, and even love.
With money on their minds as often as it is, it's no surprise that many people are struggling with money management. The survey, which asked Americans about their greatest financial concerns and obstacles, indicates that most respondents fear that they will always be living paycheck-to-paycheck.
GoBankingRates' survey results come from a national online poll of 5,003 individuals ages 18 and older.
There is reason to believe that such financial concerns are not unwarranted, as
reports earlier this year showed that as many as one-third of American households bringing in $75,000 annually were barely making ends meet.
These reports indicate that overspending is a main cause for the inability of even middle-class workers' household income to keep up with expenses, which corroborates another key finding in the survey: Americans are most challenged by sticking to a budget, an obstacle that affects 22% of women and 20% of men.
Fortunately, financial planners work with clients who struggle with saving and budgeting all the time — and they are trained to know some quick fixes and some long-term life changes that people can make.
“The Bureau of Labor Statics shows that in August 2015, for the average American, almost 6% of their income is spent on food away from home,” said financial adviser David Haraway. “That is probably triple the cost of eating at home — 4% savings right there.”
Financial adviser Gilbert Armour advocates skimping and saving as much as possible as a means to alleviate these common financial concerns.
“Americans facing economic difficulties are most concerned about keeping to a budget,” Mr. Armour said. “The key is developing an emergency reserve, since even the best budget can go by the wayside when something unexpected happens. If you have some sort of a surplus, it won't completely blow your budget so you can get back on track.”
The fear of being saddled with debt for the rest of their lives was almost as great as that of living paycheck-to-paycheck. Millennials in particular indicated that debt is a primary concern, one potentially exacerbated by the $1.2 trillion-plus in student loan debt that generation has accumulated. A whopping 33% of young millennials ages 18 to 24 say that paying for higher education is their greatest financial challenge.
And it appears that Americans are not only struggling to budget for the present. Planning for retirement was almost as daunting a challenge as sticking to a budget, the GoBankingRates survey findings revealed.
But Mr. Haraway stresses that making smart real estate decisions can go a long way in helping Americans to overcome their financial obstacles.
“I recommend to plan your affairs so as to have your house paid off by your retirement date,” Mr. Haraway said. “The Bureau of Labor Statistics estimates that households spend 32% of their income on residential costs. If the home is paid for, this cost falls significantly.”
