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1. You’re spending more than you make

About two-thirds of Americans (65%) are living paycheck to paycheck, according to the 2024 Your Money International Financial Security Survey from CNBC and SurveyMonkey. Survey respondents cited a lack of savings, economy-wide instability and rising interest rates as some of their financial stressors.

At the same time, many Americans are spending more than they earn, living off credit or indulging in a lifestyle they can’t really afford.

Keeping track of your spending for a few months could shed some light on where your money is going so you can get back on track. Consider making a budget that works for you.

In some cases, it might mean cutting back on unnecessary purchases. That doesn’t mean you have to start buying your clothes at a thrift store — rather, it could mean buying fewer clothes overall or setting an annual budget for clothes to avoid impulse purchases.

However, if you’re living well beyond your means, this could require a much more dramatic lifestyle change, such as finding a cheaper place to live and considering additional sources of income, such as a side hustle, to help offset costs.

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2. Debt is weighing you down

Not all debt is bad. In fact, debt can help you build credit. But making only the minimum payment on high-interest credit cards and loans can leave you in a crippling financial situation.

By paying the minimum amount each month, you’re basically just paying off the interest, not the principal. So, that pair of shoes you put on your credit card? You could be paying that off for years if you’re only making minimum payments.

Paying down debt may seem daunting — and it takes major commitment. You may want to consider debt consolidation or negotiating a better rate with your creditors.

Ultimately, though, you want to get rid of that debt. Some strategies include the snowball method (paying your smallest debt first, which keeps you motivated as you work your way up to your largest debt) or the avalanche method, where you pay off the debt with the highest interest rate first (and get the worst out of the way off the top).

If it feels overwhelming, it could be worth talking to a personal finance professional to help walk you through your options.

3. You’re relying on Social Security to fund your golden years

If you’re planning to rely on your Social Security benefit to pay your bills in retirement, then you could be in for a rude awakening — although you wouldn’t be alone.

According to a recent Gallup poll, 35% of non-retired adults expect Social Security will be a major source of their income in their retirement years.

However, in most cases, your benefit won’t be enough to cover your expenses during your golden years — and it was never meant to.

Social Security was designed to replace about 40% of a worker’s pre-retirement income, according to the Social Security Administration. You’ll need to supplement that with other sources of retirement income.

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4. You’re not saving enough money (or any at all)

Saving money isn’t easy when you’ve got a ton of expenses, like a mortgage, car payments, student loans and a constant stack of monthly bills.

It might mean a bit of sacrifice now, but it’s possible that, if you cut out a few indulgences — say, eating out once a month versus several times a week — money you can set aside may be easier to find than you think.

While you’ll want to have an emergency fund that’s easily accessible (say, in a high-interest savings account), you can funnel the rest into investments, such as an individual retirement account (IRA) or employer-sponsored 401(k).

The earlier you start, the better, since you’ll benefit from the power of compounding, where you earn investment returns and interest.

5. You have unrealistic expectations

If you think you need to be a multi-millionaire to retire, then you may never be able to quit working — because you’ll never be satisfied that you have enough money.

Your investments, where you live and how healthy you are will all factor into how much you’ll need to live comfortably in retirement. So, there’s no “magic number” that will work for everyone.

Doing the math — perhaps with a financial adviser — can help you set realistic expectations so you can meet your retirement dreams.

You don’t want to end up working in retirement because you have to. However, some people never retire (or switch to part-time work) because they genuinely love what they do. There’s no hard and fast rule that says you have to retire at a certain age, so do whatever seems right to you.


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Vawn Himmelsbach Freelance Contributor

Vawn Himmelsbach is a journalist who has been covering tech, business and travel for more than two decades. Her work has been published in a variety of publications, including The Globe and Mail, Toronto Star, National Post, CBC News, ITbusiness, CAA Magazine, Zoomer, BOLD Magazine and Travelweek, among others.


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.