Financial Literacy: Why Do I Have Money Problems?

It's no secret that a lot of people have a lot of money problems. In fact, financial stress is one of the leading causes of anxiety and depression in the United States. So, why do so many of us have money problems? The answer, unfortunately, is not a simple one. There are a variety of factors that can contribute to financial difficulties. Below, we'll explore some of the most common causes of money problems.

Low Income

One of the most common causes of money problems is low income. If you're not making enough money to cover your essential expenses, it's going to be very difficult to get ahead financially. Unfortunately, low income is often out of our control; if our employers aren't paying us enough, there's not much we can do about it. However, there are some things we can do to supplement our income, such as picking up a part-time job or starting a side hustle.

High Expenses

Another common cause of money problems is high expenses. Even if our incomes are high, we may still have difficulty making ends meet if our expenses are too high. There are a number of ways to reduce our living expenses, such as downsizing our homes or cutting back on unnecessary luxuries. Of course, it's important to strike a balance; we don't want to cut back so much that we're not enjoying our lives. But if our expenses are excessive relative to our incomes, it's something worth considering.

Poor Money Management Skills

Poor money management skills can also lead to financial difficulties. If we're not good at budgeting and controlling our spending, it's very easy to overspend and find ourselves in debt. Fortunately, there are plenty of resources available to help us improve our money management skills. There are books, articles, blog posts, courses, and more all about how to better manage our finances. It's definitely worth taking the time to learn some basic money management principles if we want to get our finances under control.

There are a variety of factors that can contribute to financial difficulties. Low income, high expenses, and poor money management skills are some of the most common causes of money problems. If we want to get our finances under control, it's important to identify the specific issues that are causing us difficulties and take steps to address them. Improving our financial literacy is a good place to start; the more we know about personal finance, the better equipped we'll be to make sound decisions with our money.