The Brookings Institution recently dropped a number that should turn your stomach.

In 2024, 45.5% of U.S. households didn’t earn enough to cover basic necessities — housing, food, childcare, healthcare, transportation, and utilities. Nothing fancy. Just the essentials.

That’s nearly half the country.

And it isn’t a blip. According to the Brookings Institution’s recent States of Affordability report, more than 40% of U.S. households have struggled to make ends meet in nearly every year since 2014.

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.

I’m not telling you this to depress you. I’m 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.

I’ve 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.

I’ve watched a lot of people struggle. I’ve watched a lot of people get rich. The patterns aren’t subtle.

Here are eight moves that consistently keep people on the right side of that line.

1. Know your real numbers

Most people don’t actually know what they spend. They have a rough idea. That rough idea is almost always wrong by a lot.

The first move out of financial trouble — and the first move to stay out — 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.

I’ve been preaching this for decades because it works. You can’t fix what you can’t see. This guide on strategies for sticking to a budget walks you through it.

2. Cut the big three, not the small stuff

Most “save money” advice tells you to skip lattes and pack your lunch. Fine. But that’s not what’s blowing your budget.

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’s where the needle actually moves.

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.

Go where the money actually is.

3. Pick your ZIP code on purpose

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.

That’s not a rounding error. That’s a completely different financial life for the same job and the same skills.

If your work is remote, or you’re willing to relocate for a job that is, where you live matters more than almost any other personal finance decision you’ll make. Same salary plus a lower cost of living equals a built-in raise.

4. Don’t confuse looking rich with being rich

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.

I’ve never owned a new car. My house is worth a fraction of what I could afford.

That’s not a sob story. It’s why I have money instead of looking like I do.

Lifestyle creep is the silent assassin of wealth. Every raise that turns into a bigger car payment is a raise that didn’t make you wealthier. My article on turning a raise into lasting wealth breaks down exactly how to stop the bleeding.

Quick aside — most internet financial advice comes from people who weren’t alive during the last recession. I’ve been writing about money for more than 35 years. Want rock-solid advice? Sign up for the free Money Talks Newsletter. Takes 10 seconds. No fluff. No spam.

5. Build a second income stream

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.

Translation? Your employer is making a lot more, but you’re not.

A side hustle isn’t a buzzword. It’s a financial defense system. An extra $500 a month is one freelance gig, one rental property, one weekend service business.

Need ideas? Check out this list of reliable side jobs.

6. Stay out of revolving debt

If you’re carrying a credit card balance, you’re paying somewhere north of 20% to rent money. That’s not a financial strategy. That’s financial self-harm.

I’ve said this for decades, and people still don’t believe me: Pay interest, you get poorer. Earn interest, you get richer. It really is that simple.

A household that can’t 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’s a vacation. That’s a major car repair. That’s a month of groceries.

If that’s you, attack it with these ruthless ways to destroy credit card debt.

7. Build a cash cushion before you need one

Most people don’t end up in the 45.5% because they made one giant mistake. They end up there because one unexpected $2,000 hit — a broken car transmission, an ER visit, a job loss — knocks them off the rails and into credit card debt.

Three to six months of expenses, parked in a high-yield savings account, is the buffer between a setback and a catastrophe. Our guide on building an emergency fund shows you where to park it.

Even $1,000 covers most emergencies and keeps the credit card in the drawer.

8. Invest something, even a little — always

You can’t save your way out of the affordability trap. You also have to grow your money faster than inflation eats it.

Put $200 a month into a low-cost S&P 500 index fund, earn the long-term historical average of around 10% annually, and in 30 years you’d accumulate roughly $452,000.

The same $200 sitting in a checking account? Worth a fraction of that in real terms by the time you got there.

The market goes up. The market goes down. Over decades, it goes up far more than down. Stop watching it daily and let it work.

The bottom line

Brookings is right that some of this is structural. Wages aren’t keeping up with the cost of essentials. Housing, healthcare, and childcare are eating American budgets alive.

But “structural” doesn’t mean “inevitable for you.”

People who track their spending, control their housing and transportation costs, choose their geography on purpose, avoid revolving debt, build a second income, and invest consistently end up on the right side of that 45.5% line.

People who don’t, often struggle.

The math hasn’t changed in 35 years. The discipline is what’s hard.