How to Gain Control of Your Finances Amid Record-High 401(k) Hardship Withdrawals
Monday, 8 April 2024, 12:30
American Finances Strained by Inflation
Inflation has strained many Americans' finances over the past few years, and the damage is still being felt. According to the latest data from Vanguard, 3.6% of Americans took hardship withdrawals from their 401(k) plans last year, a significant increase from 2% before the pandemic.
Steps to Regain Financial Stability
- Build an Emergency Fund: Set aside $1,000 followed by three months of expenses to cover unforeseen costs. Cut out unnecessary expenses and automate savings.
- Focus on Low-Balance Debts: Use the debt snowball method to pay off smaller debts first, gaining motivation as you see progress.
- Work with a Financial Advisor: Seek guidance from a financial advisor to create a budget, pay off debts, and plan investments, helping you stay on track towards your financial goals.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.