How To Overcome the Top 4 Financial Barriers to Happiness

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A study from Utilities Now found that Americans have missed electric bill payments three times on average over the past year, with 32% stating that they’re unaffordable. Similarly, the Priced Out of Progress Report from Zety highlighted that salaries aren’t enough to help Americans get by lately, as 90% of respondents reported that financial concerns regularly impacted their emotional well-being.

The report also pointed out that certain financial limitations stop Americans from achieving common life goals. The four primary financial barriers to happiness are:

• Inadequate salary growth (26%)
• Lack of access to higher-paying jobs (26%)
• Unexpected financial burdens/emergencies (26%)
• The rising cost of living (22%)

How can you overcome these major financial barriers to happiness? We will break these down individually.

Inadequate Salary Growth

If your salary isn’t growing at a rate that allows you to keep up with the increased cost of living, you have a few options.

Negotiate a Raise or Apply for Higher-Paying Roles

“If your salary isn’t keeping up with your needs, you may want to consider negotiating a raise or seeking a better-paying role within your industry,” said Erika Kullberg, attorney, personal finance expert and founder of Erika.com. 

Your first option is to focus on increasing your salary by seeing what changes can be made in the near future to improve your situation. You may have to set up a meeting to request a raise by sharing some of your recent accomplishments or reach out to see what jobs are available in your field. 

Upgrade Your Skills 

“If neither is feasible, then up-skilling through certifications, online courses or industry-specific training can make you a stronger candidate for those higher-paying roles,” Kullberg said. 

The harsh reality is that you may not always be qualified for a raise or higher paying gigs. This means that you’ll want to devote some time and money to upgrading your skillset. You can start by checking with your employer to see if they cover the costs of education so that you can update your resume. 

Never Get Too Comfortable in a Role 

Melanie Musson, finance expert with InsuranceProviders.com, pointed out that you shouldn’t stick with a job just because it feels comfortable. “If you’re being paid less than you would from a competitor, take the uncomfortable step of applying for a better-paying job,” she added.

Since the Zety study found that only 26% of respondents were motivated to look for higher paying opportunities, the key takeaways is to try to avoid getting stagnant in your career. Just because you may like your current co-workers or an employer, it doesn’t mean that you have to stay with that company. You want to ensure that you’re getting paid what you’re worth and this may require you to switch companies. 

Lack of Access to Higher-Paying Jobs

A lack of access to higher-paying jobs could be a self-limiting belief since the world is more connected than ever. Kullberg suggested putting time into growing your network, building your own professional presence online and looking into remote or freelance work opportunities. You should never feel you’re stuck because you could be one application away from a new opportunity. There may just be a remote working opportunity or a job available for you with a higher salary that you weren’t aware of.

Unexpected Financial Burdens

The best way to deal with unexpected financial burdens like health care costs or emergency expenses is to set up an emergency fund so that you’re prepared. “Financial emergencies can put many of us into a downward spiral and this is why building an emergency fund is so critical. Setting aside even small amounts from every paycheck will help build a financial cushion over time,” Kullberg explained.

Musson stressed that preparation is key when it comes to unexpected financial burdens because we want to be ready for whatever life throws at us. “It’s hard enough to face an emergency, but the stress of not having the funds to pay for it can add additional pressure,” she added.

If you haven’t already started an emergency fund, this is your reminder to open up a separate savings account to keep some money stashed away just in case. Every little bit will help and you’ll eventually build this fund up to help you feel confident about your situation since you don’t want to be stuck with a hefty credit card bill. 

Rising Cost of Living

There’s no denying that inflation is making it difficult for Americans to get by as prices have gone up on everyday items. There are two ways to approach this financial barrier to happiness.

Adjust Your Budget

“When everyday expenses start to get out of control, the reality is you’ll need to adjust your budget,” Kullberg said. “This might mean cutting out some discretionary spending, negotiating insurance policies or bills or just buying a bit less of certain food items each week.”

Musson also added that you may want to update your grocery budget to reflect a smaller paycheck if you find that your funds aren’t going as far anymore. This could improve your happiness since you’ll have realistic expectations for how far you can stretch a paycheck. 

Consider Moving

“If budget adjustments aren’t enough to get you afloat, then you could consider a bigger action like moving to a place with a more affordable cost of living,” Kullberg explained. You could be spending too much on your living expenses, which is making it difficult to save any money. This might be a sign that it’s time to think about moving to a more affordable location so that your paycheck can go further. 

Musson also pointed out that some areas are hubs for certain types of jobs while others aren’t. “There are a lot of factors to consider when moving, but in some cases, the only way to access higher-paying jobs is to move where the job market is better for employees,” she said.

You’ll want to explore all of your options if you want to increase your happiness because there’s no sense in staying in a stressful situation if you can change it.

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