The Top Financial Worries for Low-Income Families
Low-income families are no strangers to financial worries, but some concerns weigh more heavily than others. While middle-class households worry about sending their kids to college, planning for retirement, and owning a home, those struggling to make ends meet simply have other thoughts on their mind. To help understand the unique pressures facing low-income families, here is an overview of some of their top financial concerns.
Healthcare and Medical Expenses
Even though the Affordable Care Act introduced new means for low-income families to get access to healthcare coverage, it didn’t alleviate all of the pain points associated with medical expenses. Often, low-cost plans offer limited benefits, high deductibles, and increase out of pocket costs. That means, even if insurance is available, it might not be sufficient to cover the majority of the financial burden, especially in the case of a serious illness or accident.
Tip: Take advantage of free quality healthcare assistance and subsidies
Those struggling at the bottom of the financial totem pole are acutely aware of what low wages can do to a family. And, if they work in an area where wages have been stagnant, the concern can actually become greater even as they gain more experience in the field. Depending on their current profession, the potential for increased pay may also be limited. Or, in cases where small increases may be available, the amount lost in benefits (such as reduced costs for health care plans) may offset the increase entirely, leaving them no better off.
Tip: Control your finances through practical budgeting and take advantage of benefits
It’s no surprise that those facing financial difficulties on a regular basis are worried about repaying any debt they have currently. And, in fact, some may resort to using one method of debt, such as a credit card, to make the payment on another. Essentially, this creates a cycle of using debt to pay debt, which can be a difficult one to break.
Tip: Utilize free debt elimination services (free professional help)
Whether they are living as homeowners or rents, housing costs often take up a disproportionately high amount of a low-income family’s budget than their more affluent counterparts. And, since housing prices tend to be on the rise, keeping a roof over their heads can be a significant source of stress. Add to that increased costs for utilities, insurance, and property taxes (if applicable), and this is something that can keep wage earners awake at night when times are especially tight.
Tip: Take advantage of numerous housing programs to help with rent, mortgage and bills
Most low-income families lack significant savings, and this makes the idea of job loss particularly troublesome. Often, missing even a single paycheck can spell disaster for those already struggling to make ends meet, and anything beyond that may be nothing short of catastrophic even with unemployment benefits, should they qualify for assistance.
While other assistance is generally available during an unexpected period of unemployment, it can take time to get these benefits in place. And that means often having to take on new debt or fall behind on payments while waiting for the additional forms or assistance to kick in.
Tip: Retrain and get into a different industry and take advantage of financial assistance while you enroll or are looking for a new job.
Other areas of concern also affect low-income families, including those felt by more affluent parts of the population, but many of their concerns focus on more basic needs. For some, the idea of sending a child to college or ever reaching retirement seems almost unfathomable based on what they face today, which can be a new source of stress all on its own.