The Brookings Institution recently dropped a number that should turn your stomach.<\/p>\n
In 2024, 45.5% of U.S. households didn\u2019t earn enough to cover basic necessities \u2014 housing, food, childcare, healthcare, transportation, and utilities. Nothing fancy. Just the essentials.<\/p>\n
That\u2019s nearly half the country.<\/p>\n
And it isn\u2019t a blip. According to the Brookings Institution\u2019s recent States of Affordability<\/a> report, more than 40% of U.S. households have struggled to make ends meet in nearly every year since 2014.<\/p>\n The only relief came during the pandemic stimulus years, when expanded tax credits temporarily pulled people across the line. The minute those expired, the country slid right back into the danger zone.<\/p>\n I\u2019m not telling you this to depress you. I\u2019m telling you because the difference between landing in the 45.5% and landing in the 54.5% mostly comes down to choices you can control.<\/p>\n I\u2019ve been writing about personal finance for more than 35 years. I became a CPA in 1981, spent a decade as a Wall Street investment advisor, and founded Money Talks News in 1991.<\/p>\n I\u2019ve watched a lot of people struggle. I\u2019ve watched a lot of people get rich. The patterns aren\u2019t subtle.<\/p>\n Here are eight moves that consistently keep people on the right side of that line.<\/p>\n 1. Know your real numbers<\/p>\n Most people don\u2019t actually know what they spend. They have a rough idea. That rough idea is almost always wrong by a lot.<\/p>\n The first move out of financial trouble \u2014 and the first move to stay out \u2014 is tracking every dollar coming in and going out. Not in your head. Do it on paper, in a spreadsheet, or in a budgeting app.<\/p>\n I\u2019ve been preaching this for decades because it works. You can\u2019t fix what you can\u2019t see. This guide on strategies for sticking to a budget<\/a>\u00a0walks you through it.<\/p>\n 2. Cut the big three, not the small stuff<\/p>\n Most \u201csave money\u201d advice tells you to skip lattes and pack your lunch. Fine. But that\u2019s not what\u2019s blowing your budget.<\/p>\n The Brookings data makes it obvious: Housing, transportation, and food are the dominant cost-of-living drivers for most households. If you want to move the needle, that\u2019s where the needle actually moves.<\/p>\n Refinancing a mortgage when rates drop, downsizing to one car, or meal planning instead of grabbing takeout can save you hundreds a month. Cutting one streaming service saves you $15.<\/p>\n Go where the money actually is.<\/p>\n 3. Pick your ZIP code on purpose<\/p>\n This part of the Brookings report is rough. In Hawaii, only 39% of households can make ends meet. In Colorado, both North and South Dakota, and New Hampshire, more than 60% can.<\/p>\n That\u2019s not a rounding error. That\u2019s a completely different financial life for the same job and the same skills.<\/p>\n If your work is remote, or you\u2019re willing to relocate for a job that is, where you live matters more than almost any other personal finance decision you\u2019ll make. Same salary plus a lower cost of living equals a built-in raise.<\/p>\n 4. Don\u2019t confuse looking rich with being rich<\/p>\n When I worked on Wall Street back in the 1980s, I figured something out fast: The people who actually had money rarely looked like it. The flashiest cars and the sexiest watches were usually owned by people one paycheck away from disaster.<\/p>\n I\u2019ve never owned a new car. My house is worth a fraction of what I could afford.<\/p>\n That\u2019s not a sob story. It\u2019s why I have money instead of looking like I do.<\/p>\n Lifestyle creep is the silent assassin of wealth. Every raise that turns into a bigger car payment is a raise that didn\u2019t make you wealthier. My article on turning a raise into lasting wealth<\/a> breaks down exactly how to stop the bleeding.<\/p>\n Quick aside \u2014 most internet financial advice comes from people who weren\u2019t alive during the last recession. I\u2019ve been writing about money for more than 35 years. Want rock-solid advice? Sign up for the free Money Talks Newsletter<\/a>. Takes 10 seconds. No fluff. No spam.<\/p>\n 5. Build a second income stream<\/p>\n The average U.S. hourly pay rose just 34% from 1979 to 2025, while productivity nearly doubled, according to data from the Economic Policy Institute<\/a>.<\/p>\n Translation? Your employer is making a lot more, but you\u2019re not.<\/p>\n A side hustle isn\u2019t a buzzword. It\u2019s a financial defense system. An extra $500 a month is one freelance gig, one rental property, one weekend service business.<\/p>\n Need ideas? Check out this list of reliable side jobs<\/a>.<\/p>\n 6. Stay out of revolving debt<\/p>\n If you\u2019re carrying a credit card balance, you\u2019re paying somewhere north of 20% to rent money. That\u2019s not a financial strategy. That\u2019s financial self-harm.<\/p>\n I\u2019ve said this for decades, and people still don\u2019t believe me: Pay interest, you get poorer. Earn interest, you get richer. It really is that simple.<\/p>\n A household that can\u2019t make ends meet, plus a $5,000 credit card balance at 22% APR, is paying about $1,100 a year just for the privilege of being broke. That\u2019s a vacation. That\u2019s a major car repair. That\u2019s a month of groceries.<\/p>\n