According to a recent report from the Federal Reserve Bank of New York, a record 7 million Americans are struggling to make car payments. While unemployment rates are low, many Americans are having difficulty paying down debt. How does it all add up?
Millennials Struggling the Most
The majority of people struggling to pay bills and battling low credit scores are those under the age of 30. Why is this demographic having a harder time than most? One possible explanation might be student loan bills. Attempting to juggle student loans while paying a car loan might prove to be too much.
There’s another factor at play here as well. Even though the job market is strong, the number of high-paying good jobs are scarce. The average American earns a total of $44,500 per year -- roughly the same rate that the average worker made 40 years ago. So while there are plenty of jobs to go around, few of those options provide enough of a salary to make today’s higher bills and larger student loan ends meet.
Ways to Balance Bills
Even though it might be tougher now to pay bills than it was in previous years, there are some tactics that you can use to make sure essential payments are made.
Here are some tips.
- Pick up a side gig: nobody wants to give up a weekend or a few nights per week, but picking up a side job might not be a bad idea. You’d be surprised at what a few extra dollars per month can mean when it comes to paying bills.
- Negotiate with your lenders: call your lenders and ask what you can do to lower payments. Most of the time, you can strike a deal that works for both you and the company you are dealing with.
- Be careful when you purchase a car: in most cases, it makes better financial sense to seek lending from a financial institution as compared to a car dealership. As with any other large purchase, it pays to shop around.
- Ask for a raise: have you been working with your company for a long time? Are you eligible for a pay raise? Ask.
- Take public transportation: if you don’t need a car and can use public transportation, sell your car and start taking the bus or subway. You will save money and get rid of that hefty car payment (while also making the environment a bit cleaner).
The number one thing that we want you to take away from this article, though, is that there’s no shame in making ends meet. It happens to everyone at some point. If you can’t find a way out of debt, are stressed out, need a break, and do not know what to do, call us. We can help.