The Clamps Are Tightening
Do you ever feel like you make good enough money and manage it well, yet there's simply no margin in your financial life? If so, you aren't alone. Millions of families in this country are experiencing this phenomenon. Inflation has wreaked havoc on so many people. What not long ago felt like a respectable income has turned into "just scraping by." Even though inflation is going down, its consequences are here to stay. This is a common misconception about inflation. When inflation goes down, it doesn't mean prices go down. Rather, it means prices are going up less quickly from their now-inflated levels. It's a mess.
I regularly meet with families that make $8,000, $10,000, or $12,000/month of take-home income, barely making ends meet. Much of this can be attributed to the cost structure established by the family prior to inflation setting in, which is difficult to change. It's embarrassing for people, and they feel alone. After all, it's weird to tell your friends or family members, "Yeah, I know we make $160,000 per year, but we're really struggling." That sort of conversation will make people play their miniature violins with their eyes rolling. Therefore, people suffer in silence.
It feels like the clamps are tightening. We can stave off the financial pressure for a while, but eventually, it starts to add up. The normal life costs keep increasing until they've squeezed out the margin. One-off expenses, such as medical bills, car maintenance, and house repairs slowly bleed people dry. We make purchase decisions that entrap us in debt. We experience shocks to our income. One by one, families are breaking.....it's so sad!
If any of this hits home for you, perhaps what I'm about to say next can help you relieve some of your pressure. Here is a menu of options to help you navigate a tight financial season:
Find areas of your monthly budget to cut. You may need to trim down on dining out, travel, or other wants.
If you have assets tied to debt (and hefty loan payments), you might consider selling them. One of my clients sold their vehicle, and it immediately freed up $800/month from the car payment being done.
Temporarily tone down your investment contributions.
Temporarily stop saving toward your sinking funds. Yes, these are important, but it's more important to keep the financial train on the tracks.
Find extra income. A side hustle or side job can relieve a ton of financial pressure.
If you're not sitting on a cheap mortgage, it might be time to downshift your housing.
You aren't alone! But at the same time, the burden of navigating it is on you. I don't like it any more than you do, and I think we have some major problems on our hands, but it's the reality we're stuck with (for now). We must face it head-on so our families can live to fight another day. It's a tall order, but you got this!
I'm happy to chat if you have any questions about your own situation. This is a scary and prevalent issue, and you don't need to face it alone.