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Behind and beneath the numbers

The Acorns study identified three top financial concerns that won’t surprise anyone who’s checked their bank balance lately: the cost of living (31%), inflation (27%) and debt (12%). While the first two relate to fixed external factors, debt is more insidious. Many consumers have no idea how bad their situation might be. In 2022, 51% of American households held credit card debt and by 2023 were paying $126 per month in interest alone, according to the Federal Reserve Bank of St. Louis. That is money thrown away.

Current events also seem to have a pronounced effect on millennials in terms of financial well-being. This generation cited global conflict (55%), climate change (48%) and artificial intelligence (AI, 44%) as their top concerns, according to Acorns. Fear of AI may stem from potential workplace consequences. There’s even a new term for it: FOBO, or fear of obsolescence. According to the World Economic Forum, more than one-fifth of workers fear machines will replace them, almost double the number in 2017.

And interestingly, the Acorns survey revealed that as earning power increases, so too do money worries. Of those making less than $40,000 annually, 47% cited financial security as a concern; the numbers climb to 52% for those making $40,000 to $74,000, and 55% for the $75,000-and- up group.

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Millions of Americans are struggling to crawl out of debt in the face of record-high interest rates. A personal loan offers lower interest rates and fixed payments, making it a smart choice to consolidate high-interest credit card debt. It helps save money, simplifies payments, and accelerates debt payoff. Credible is a free online service that shows you the best lending options to pay off your credit card debt fast — and save a ton in interest.

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Preparing for the unexpected

Apart from a sudden end to inflation or widespread grocery store price wars, financial security remains an inside job. There’s much we can do to address financial worries — which, even if founded, can easily spiral out of control. Here are three smart ways to recover peace of mind.

1. Create an emergency fund. As for how much you need, three to six months' worth of expenses is a number you’ll see everywhere. As the name implies, this money covers unpleasant financial surprises, from medical bills to car or home damage your insurance policies don’t cover.

2. Invest incrementally. You don’t need deep pockets to start investing — just a little bit of spare change. Some platforms, including Acorns, can help you enter the world of investing with only the coins in your pocket. As you gain confidence, check out the many automated apps (also known as robo-advisors) that take much of the intimidation and guesswork out of investing. Some apps can be set up to make small, regular withdrawals from your bank account.

3. Meet with a financial adviser. Even the smartest people go about their financial lives with a cloudy sense of the true numbers and where the issues lie. Granted, it’s complicated given that our finances span many issues that include taxes, investment and asset protection. A solid adviser brings all this together to save money, increase investment income — and turn vagueness into clarity.

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Lou Carlozo Freelance writer

Lou Carlozo is a freelance contributor to Moneywise.

Disclaimer

The content provided on Moneywise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.