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72% of Americans say the economy is in good or bad shape. Here's why

America has fortunately avoided a recession that once seemed all but inevitable. But two years of rising inflation and aggressive interest rate cuts that have pushed up debt prices have taken a toll on many Americans.

A recent Pew Research Center poll found that 31% of Americans say economic conditions are “poor” and another 41% say they are “just fair.” This is in stark contrast to the remaining group of Americans who describe the economy as excellent or good.

Here's why the majority of Americans don't feel positive about the economy and what you can do to get your personal finances back on track.

Why so many people don't feel good about the economy

According to Pew, there are many individual reasons why people feel bad about the economy, including a person's political leanings or socioeconomic status. But of the 72% of respondents who said the economy wasn't doing well, the top three reasons they felt that way were:

  • High inflation
  • High cost of living
  • Lack of well-paying jobs/low wages

Although inflation has cooled, it is understandable why so many people are still concerned about it. Inflation is growing more slowly — 2.8% in February, based on the Federal Reserve's preferred measure — but rising prices in recent years have made everything more expensive.

Consider some of the recent cost of living increases:

  • Americans now spend an average of $779 per month on groceries, a 13% increase.
  • The average sales price of a home has increased nearly 24% over the past three years to $417,700.
  • The average transaction price for a new car is $47,244, up 14% from three years ago.

So that's the bad news, but the good news is that you can take some steps to improve your personal finances.

How you can improve your financial situation now

Getting out of a financial hole is difficult, but there are some practical ways to make incremental improvements. Here are some ways to get started in the right direction.

Start an emergency fund

Most experts recommend setting aside at least $1,000 in an emergency fund to cover unexpected costs like a car repair, a medical bill or a home repair. If you can't reach this amount, try putting as much as you can into a savings account each month. The more you have saved, the less you will need to rely on credit cards or other loans to cover unplanned expenses.

Consider a balance transfer card

These can be difficult if you already have debt, but they can also help you catch up on your payments. Many balance transfer cards offer a promotional rate of 0% on balance transfers for a year or longer. Signing up for a balance transfer card can help you lower your interest rate while you work on paying off debt.

Speak to a professional

If you find yourself in a difficult financial situation, it is helpful to have additional perspective on the problem. A financial advisor can help you develop a plan to pay off debt, create a budget, and get your finances in order. The National Association of Financial Advisors website can help you find fiduciaries who are legally required to work in your best interests.

Find gig work

I know what it's like to have stubborn credit card debt and recently took on additional freelance work to pay it off. About half of Americans have a side hustle, and there are plenty of great work platforms to help you get started. While they won't make you rich, the average side hustle brings in about $9,720 annually.

Ask for a raise

If you've been in your position for a while and your responsibilities have increased, it might be a good time to ask for a raise. Some estimates put the success rate of getting a raise upon request at 70%.

Focus on what you can control

Not all of the suggestions above may apply to your individual situation. But it's worth remembering that implementing one or two of these could be a small step in the right direction. Figuring out what you can control when unexpected financial circumstances arise will help you know what steps can help you get back on track.

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