9% Say They’re at Their Financial Worst in 2023: How To Use a New Year To Turn Things Around
Written by
Martin Dasko
Edited by
Amber Barkley
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With inflation bringing the cost of everything up, life has become more expensive, and it has become a challenge for many to get their finances in order.
It’s not a secret that some people are in compromising financial situations. Here’s a look at how you can use a new year to turn around your finances and improve your situation, even if it feels like you’re stuck.
9% Say They’re at Their Financial Worst
According to a recent survey of over 1,000 Americans conducted by GOBankingRates, 9% of the participants rated their financial situation at the end of 2023 as the worst ever. Almost 20% of those in the 45 to 54 age bracket admitted to being in their worst financial position, while only about 5% in the 18 to 24 age range were in this situation. The amount of males and females in their worst financial situation was almost identical.
While no specific reasons were given, it’s clear that rampant inflation and aggressive rate hikes have been making life more expensive for most people. It has been a challenging period when it comes to trying to save money and focus on your finances since there are so many factors out of our control that impact our finances.
How To Turn Things Around in 2024
The good news is that you can always improve your financial situation by taking action as the new year approaches. We spoke with a few financial experts who shared advice for anyone who feels like they’re at their financial worst.
Accept That It’s Time To Change
“It’s never too late to turn things around, and realizing that you are ready to make a change is commendable,” shared Jessica Morgan, a finance expert and founder of Canadian Budget. “Whether you are struggling to get out of debt, tired of living paycheck-to-paycheck or making a good salary but not saving enough, deciding to take your finances seriously can literally change your life.”
The most important step in making any changes is to accept that it’s time. Even though you could feel like you’re in your worst financial situation, it doesn’t mean you’re stuck. You can always turn things around if you’re ready to make some sacrifices and you’re open to learning new concepts.
Figure Out Where You Stand
“As uncomfortable as it may be, taking stock of where you are at today and what got you there is the first step,” said Morgan.
You have to figure out your current financial situation to know what needs to be worked on first, and you need to collect some data to determine what needs to be worked on.
What should you look at when trying to figure out your financial situation?
- Your debt. How much money do you owe? How much of your income is going towards debt payments?
- Your income. How much money do you have coming in? Have you peaked at your current career, or could you upgrade your skills?
- Your monthly expenses. How much are you spending monthly? Could you bring your expenses down to save more money?
You want to determine exactly where you stand financially to know what you should focus on. We all have different financial struggles, from trying to pay down debt to finding ways to bring in more money.
Create a Realistic Budget
“If you don’t have a budget, it’s like driving with a blindfold — not a good idea,” said Jeff Rose, a certified financial planner and founder of Good Financial Cents. “Getting a budget together is step one. Try a zero-based budget where every dollar gets a job. It’s about making sure you know exactly where your money’s going — this could be a game-changer for you.”
It’s crucial that you make some sort of budget so that you limit how much money you’re spending. With the rise of budgeting apps, there’s likely a tool available for you that will help you simplify this process.
Track Your Expenses
According to Morgan, “If you do nothing else, the benefits of tracking expenses cannot be underestimated. This will give you a baseline of where to begin and help you make educated decisions on what changes are realistic and will make the most impact toward your goals.”
As soon as you create a budget, you should track your expenses to see where your money’s going. Look for subscriptions that can be cut and areas where you’re spending far too much money. Doing this will help you determine where you could improve your spending and save more money.
Work on Your Credit Card Debt
“If you’ve got credit card debt, especially with rates over 20%, it’s like a ticking time bomb for your finances,” shared Rose. “Think about transferring that balance to a card with a zero interest period, or check out debt consolidation options. It’s about stopping that interest from ballooning.”
It’s crucial that you figure out a plan for paying down your debt so that you can keep more of your money for yourself. You’ll want to look into debt consolidation or find a balance transfer offer that allows you to bring your interest rate down to 0% for a specific period of time so that you can speed up this process.
Learn About Money Management
Clifton Corbin, RFC® MBA and founder of CliftonCorbin.com, suggested, “Seek and consume personal finance books, podcasts, and videos to refine your skills. Engage with friends, family and advisors about money-related topics.”
If you want to improve your finances, you’ll have to learn more about the topic to understand how money management works.
Money management topics to get you started:
- Paying off debt
- Building up your credit score
- The basics of investing
- Real estate investing
- Retirement planning
Start by finding reputable sources on YouTube and social media for free advice and consider investing in a few popular personal finance books. Reach out to friends and family who are knowledgeable on the topic you’re trying to learn more about.
Set Financial Goals
“Decide on the financial goals you want to set for yourself and utilize budgeting tools and templates to help you work out a plan to follow that fits your unique situation,” Morgan expressed.
As you’re working on your budget and improving your finances, you want to ensure you have realistic financial goals and timelines to help you stick with it.
Financial goals to get you started:
- Pay down your high credit card balance
- Set a budget that helps you stay on target
- Save up $1,000 in an emergency fund
- Find a side hustle that brings in $500 per month
Find Ways To Increase Your Income
One of the best ways to solve your financial problems is to focus on making more money. Sometimes, you’re just not bringing in enough money to improve your financial situation. Fortunately, numerous options exist for finding a new income stream or upgrading your current income.
You can start by looking into ways you can upgrade your current skills. If your current employer offers courses, utilize them to improve your current skill set and increase your income.
Try something in the side-gig economy. You can start your own Etsy shop, offer freelancing services or create a YouTube channel to increase your income. There are various opportunities in the gig economy, from walking dogs for money on Rover to performing jobs on TaskRabbit.
The goal is to find a sustainable way to increase your income so that you have more money to help you pay down debt and plan for the future.
Closing Thoughts
Corbin said, “Don’t be afraid to fail; grant yourself grace and correct errors as you go.”
Money management can become overwhelming, so it’s critical that you try to remain patient while working on improving your situation.
If you feel like you’re in your worst financial situation ever, the good news is that you can always turn things around. There’s a light at the end of the tunnel, and you don’t have to feel like you’re alone on this journey.
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