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What are Americans’ Financial Problems in the first part 2023?

This post will highlight several major financial problems Americans are facing as we move toward the second quarter of 2023. We’ll also point out 7 key statistics that don’t paint a rosy picture of some aspects of the economy.

There are a couple bright spots and points of anecdotal hope in addition to these financial problems though. So take a couple minutes to see what many Americans are dealing with when it comes to personal finance in 2023.

3 Key Stats Pointing to Big Financial Problems

  1. 35% of adults reported having month-to-month credit card debt

  2. 57% of Americans say they could not afford a $1,000 emergency

  3. The average APR on credit cards hit a record high of 19.04%

Debt equals payments. Which not only correlates but causes the inability of families to save money for emergencies. Then when emergencies pop up, financial problems mount.

And here are a couple of things Americans are saying about their personal finances at this time.

“I’m close to being a senior and this is the first time in my lifetime that I’ve had to resort to going to a food bank.”

“I make $40k and have three kids and I tell you, it is a struggle right now with inflation.”

Real quotes from people in the ‘trenches’ trying to provide a living for themselves and family members. If you’re in a similar situation, please see this link for our handy 2023 Saving Money Checklist (101 item checklist).

2 of the list items:

Learn one small skill that makes you more valuable at work

Ask a friend to use the checklist with you (the buddy system works)

Emergency Fund for Emerging Financial Problems

Most every financial expert will tell you to start an emergency fund. It’s the only way to get off of credit card dependence, which is a vicious cycle.

But when grocery and utility prices are still inflated beyond belief, saving money gets harder, of course.

To overcome costs that are unavoidable like food, shelter, gas, etc., you must make a plan.

● Plan to carpool

● Plan your grocery budget and reduce items that are not must-haves

● Research utility assistance programs in your local area

Those are good starting points. Don’t underestimate the power of planning. With the momentum you gain by planning, an emergency fund will no longer seem impossible.

No Savings, Signals More Financial Problems

Living paycheck to paycheck is a huge financial concern for many Americans.

39% say they have less in savings than they did 12 months ago.

Not only that. As of this post, 9.3% of Americans with low credit scores are 30 days late on their auto loans.

Being behind on car payments is a major financial problem that can make things worse since most of us need vehicles to get to our jobs. Again, a vicious cycle, which as you can see from the quotes from Americans below, are becoming more common.

“I’m 62 and have the most revolving debt I have had at any point.”

“We gave in to the house hype of 2020 and now I have been laid off from my tech job.”

“The last recession, around 2008, well, it took me about ten years to recover and get past those financial problems.”

When to Prepare for Financial Problems

Even bad guys have good life advice. Mean ole Longshanks from Braveheart had this gem when his son tells him a plan won’t work because they “would’ve needed to move troops six weeks ago.”

“Yes, I ordered the troops to move… six weeks ago.”

The only way. I’ll say it again. The only way to prepare for financial issues and problems is to start now. Does not matter when ‘now’ is.

See, if times are good, then prepare for when they are not as good. Or when times are a downright dogfight. Ready your troops and get them on the move before you need to.

That mindset is what we were hinting at near the top of this article.

“The writing was on the wall so we’ve been successfully prepping for the worst.”

“I’m debt-free and utilities are my largest bill each month so I feel good about my situation. Though it took sacrifice and some good fortune to get here.”

Quotes from real Americans who have beat back financial problems. By being proactive. By taking action before things got rocky.

And to touch on the ‘good fortune’ - if you are in a good financial position, please reach out to educate a young person who may not have guidance available. Share this article. Share your wisdom. Just be of help to them if you can.

Concerning Statistic on Household Finance Problems

Household debt is about 2.75 trillion dollars higher than pre-pandemic levels.

Trillion is a tough number to wrap our heads around. But it is telling and frightening.

Did many Americans get comfortable with extra unemployment payments during the first year of COVID? How much did stimulus payments affect the American mindset? And the endless printing of money has been disastrous.

The impact is hard to calculate on a deep level. $2.75 trillion of debt piled onto households though, paints a dark picture. So much so, that we also took note of alternative takes on Americans’ financial problems and possible future woes.

“I work at Home Depot (second job) and have noticed lots of people buying supplies to build their own chicken coops. More customers buying seeds too.”

Egg prices were up 59.9% in December 2022 (year-over-year).

“Planning to move overseas since the dollar goes further there and I can stretch my Social Security check further.”

“It’s not just the Fed raising interest rates. We’re in a global economy, so other countries’ regulations affect us here in America too.”

Good point but, it’s personal.

How can You Battle Financial Problems in 2023?

Anecdotal evidence of financial struggles (and some solutions) are helpful because you get a feel for what’s ‘happening on the ground,’ so to speak. Yet, looking at the big picture can drag you down and make you feel powerless sometimes.

Making it crucial to focus on your personal finances. Since you can take action on those. You and I have no agency when it comes to changing the Fed’s mind on interest rates. And we can’t picket JP Morgan to lower mortgage rates, right?

Financial problems are personal. So are solutions. If you’re struggling, reach out to someone who can offer sound advice. Look for a mentor if you don’t have one in your family.

On the flip side, if you can mentor someone looking to overcome financial struggles, take action! That is one of the few ways individuals can impact the overall economy beyond lifting their family up. By helping another American figure out how to build wealth the old fashion way - earn it, and save it.

Investment advice offered through Private Advisor Group, LLC, a registered investment advisor.

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