Many things in life are easy to change, but sadly, your finances are not one of them. An unpredictable job market, unexpected financial hardships and overwhelming debt make succeeding financially a real challenge for many Americans. But even so, there are ways to navigate through these hurdles and set yourself up for financial success.
Click through to learn how to bounce back from financial hardships, and consider using these four ways to help bring your finances to the next level.
What to Do to Get Out of Student Loan Debt
One of the biggest setbacks in having financial freedom can be lingering student debt. In fact, almost 40 percent of adults under the age of 30 have student loan debt, with the median borrower owing $17,000 in 2016, according to the Pew Research Center. Monthly payments to chip away at this debt might put you on a tight leash financially, so you might consider taking on a side job in order to put that extra income toward paying off your student loan debt. If this doesn’t help to alleviate some of your financial burdens, try to rework your student debt repayment plan so that your payments are income-based, which might result in a lower monthly payment.
What to Do to Overcome Credit Card Debt
Student loan debt isn’t the only kind of debt keeping many people from reaching their financial goals; credit card debt is also a thorn in the sides of people looking to achieve financial success. Fifty percent of Americans have credit card debt, according to a GOBankingRates survey. And although making minimum payments to pay off credit card debt is helpful, it might not really move the needle for your finances in the long run.
“Try to make larger payments, since this pays down your balance faster and can potentially save you hundreds or thousands of dollars in interest,” said Andrea Woroch, consumer finance expert with online lender Marcus by Goldman Sachs.
Also, push yourself to make purchases with your debit card rather than using credit cards. The mere knowledge that you’re dipping into your checking account might force you to better manage your finances while avoiding more debt, according to Mathu Mathu, assistant vice president of operations for Navy Federal Financial Group.
What to Do If You Fear Having to Work in Retirement
Well for starters, don’t be afraid. Although working during retirement years isn’t typically ideal, it might actually be a good thing for your finances, according to Mathu. Not only does continuing to work allow your retirement savings to grow, but working past your retirement age and postponing Social Security also helps increase your Social Security benefits.
But if that doesn’t sound like a risk you’re willing to take, then it’s best to save money early in your career. If you save 12 to 15 percent of your yearly income, you’ll be able to account for 70 to 80 percent of your income when you enter retirement.
What to Do If Financial Matters Confuse You
It’s safe to say that finance isn’t the most digestible subject: Only two-thirds of Americans understand basic financial terms. But understanding the basics of finance is valuable if you want to change your financial status. You don’t need to be well-versed in all things money, but to get started, take a step back and analyze your own financial situation. Try meeting with an advisor or create a solid budget plan so you can understand your options and be more educated about handling your money — and your future.
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