The average American is worried about their finances — making small changes can help

Despite having more tools than ever to manage their money, Americans are feeling increasingly stressed about their finances. A recent study by TD Bank reveals some surprising insights into how people are coping with economic challenges.

The Financial Stress Paradox

Interestingly, while 67% of people lose sleep over money issues, 85% feel confident in their ability to manage their finances. Chris Fred from TD Bank explains this contradiction: “Consumers today are much more in tune with their finances than ever. They’re smarter, more educated, and have more tools, but it’s tough right now.” With inflation, high interest rates, student loans, and retirement savings to worry about, it’s no wonder people are feeling overwhelmed.

Changing Spending Habits

The current economic situation has forced many to rethink their spending. Half of the people surveyed said grocery prices have increased the most in the past year, and 42% have had to change their financial priorities. Fred advises keeping a close eye on your cash flow to prevent overspending. He emphasizes that small daily expenses like streaming services or coffee can add up quickly over a month.

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Tackling Debt and Saving for the Future

Only half of those surveyed are actively saving for retirement, and one in five say credit card debt is holding them back from reaching their financial goals. If you’re carrying debt from month to month, Fred recommends shopping around for better interest rates, especially if you have a good credit score. He also suggests focusing on paying off the card with the highest interest rate first to make your money go further.

Tips for Navigating High Inflation

1. Track Your Spending: Knowing where your money goes is the first step to better financial health.
2. Make Small Changes: Fred emphasizes that small savings can add up over time. “A few dollars saved here and there over time can be significant,” he says.
3. Think Long-Term: While cutting back might be hard in the short term, these sacrifices can make a big difference in the long run.
4. Shop Around for Better Rates: If you have debt, look for lower interest rates to reduce your overall payments.
5. Prioritize High-Interest Debt: Focus on paying off the debts with the highest interest rates first.
6. Don’t Underestimate Daily Habits: Small daily expenses can have a big impact on your finances over a year.
7. Stay Informed: Keep learning about personal finance to make better decisions.

While the current economic situation may seem daunting, taking control of your finances is possible. By tracking your spending, making small changes, and thinking long-term, you can improve your financial health. Remember, it’s the little things that often make the biggest difference in the long run. Stay informed, be proactive, and don’t be afraid to seek help or advice when you need it. With patience and persistence, you can navigate these challenging times and work towards a more secure financial future.

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