A whopping 68.4% of Americans are walking a "financial tightrope," according to a June report from PYMNTS Intelligence. Worse still, the percentage of consumers struggling to pay their bills rose for a third consecutive month to 24.2%, leading to high levels of anxiety.
Budgeting helped a lot, especially the use of budgeting apps that sit on smartphones and tablets. Only 26.9% of advanced budgeters (those who use at least one advanced tool) struggled to pay their bills compared with 64.8% of those who did not attempt to budget.
"Among the respondents with trouble making ends meet, more than half who use specialized, advanced budgeting tools, such as Intuit’s Credit Karma (which absorbed Mint last year), YNAB (You Need a Budget) or any of the dozens of others out there, said they feel financially comfortable," said the report. "Meanwhile, just 12% of those who use only rudimentary personal finance tools — and almost none who don’t budget at all — indicated the same. Among the survey’s many findings: Daily budget reminders offer an easy way for people to feel happier about their financial situations."
So, enabling an app's daily prompts has a proven effect on reducing financial anxiety. Yet only 14% of consumers use those, a percentage that has been plateauing recently.
Trying to Walk the Tightrope
A different survey, published Wednesday by Advance America, found consumers working hard to get their finances under control. "In fact, an impressive 86% of respondents said they review their spending regularly to identify if there are areas where they need to make changes," said the report. "What's more, 29% of those surveyed said they have a monthly budget to help guide their spending."
The report goes on, "Saving is also more difficult right now, with 75% of Americans saying they don't have enough money set aside to cover basic living expenses for at least three months."
Saving for a Down Payment
If three in four consumers are having trouble keeping their heads above water, how much harder must it be for prospective homeowners to save for a down payment and closing costs?
Well, that could be phase two or three in their journey. First things first: balance the budget, then get a few thousand dollars in an emergency fund. Then, start saving for a house.
Even then raising down payment funds can be daunting. Down payment assistance is available to many. Saving a down payment of even 3% is an astronomical number in many markets.
Helping further is the USDA loan for rural and suburban buyers, while U.S. military veterans and service members are often eligible for VA loans, both of which come with a zero-down-payment requirement.
But what about those who can't get that assistance? They need all the other help they can get. And using a budgeting app with daily prompts enabled can only make life easier.
Just take care choosing your app. The OneAZ credit union recommends, "When choosing a budgeting app, prioritize safety by opting for trusted platforms with strong security measures to safeguard your financial data."
