A “Financial Pandemic”

While the pandemic may be behind us, the repercussions linger on. One of those problems that financial guru Suzi Orman portends is of a financial pandemic on the way, one that will take many Americans by surprise.  The impact could be devastating on the financial well-being of those who are caught unprepared.

Debt 

Although the economy overall has so far avoided the worst of the forecasts (a deep recession), inflation has had a horrendous impact on families across the nation, leaving them steeped in debt with little hope for a way out. The numbers are alarming: credit card debt has topped $1 trillion in the past year for the first time in history, putting families into debt and paying astronomical interest rates.

Living Paycheck to Paycheck 

Alarmingly, over 60 percent of American adults are living paycheck to paycheck, meaning tough choices are on the menu for many. Discretionary spending is pitted against paying off debt, and that debt increases exponentially when people make minimum payments on high-interest credit cards and loans. And about half of us have little or no savings to deal with a surprise car break-down, medical issues, or household emergency. No wonder three-fourths of Americans say they are stressed about their finances, and don’t even have $400 on hand to deal with a minor blip in their financial needs!

Changes in Spending 

Americans were stuck at home for the most part during the pandemic, many getting a break on student loan payments and rent requirements while they got a little help from stimulus checks. Many people were able to sock away a little money since their discretionary expenses—restaurants and vacations, for example—were eliminated.  But as pandemic restrictions were eased, so too were the feelings of gloom and doom, and people felt they deserved a little fun after being “locked up” for two years. Concerts, dinners out, travel, and luxury items had allure, and many saw their savings accounts shrink as they rewarded themselves for surviving the pandemic. But now, eight in ten Americans say they have less cash available now than they did pre-pandemic.

It’s Past Time to Make a Budget 

For many families, financial ruin is on the horizon. They are living beyond their means, and simply can’t get on top of their debt. Now, more than ever, creating and sticking to a budget may be the only way to avoid bankruptcy.

Under Water 

In the event you just can’t breathe with all the debt you’ve accumulated, perhaps filing for bankruptcy is the best option going forward.  To discuss, contact the experienced Miami bankruptcy attorneys at the Miami office of The Law Office of Julia Kefalinos today.