Money problems are pretty common. In fact, 73% of Americans say finances are their top source of stress in life, according to a 2025 survey by Capital One.[1] So if you are feeling the pinch and worrying, you are not alone.
But that doesn’t mean you should live with the anxiety that a mountain of debt or low credit score can bring. Here, you’ll learn about the most common financial issues you may face, how to avoid money problems, and how to resolve them if and when they strike.
Key Points
- A healthy emergency fund should cover three to six months of living expenses.
- Overspending, often on small items, can lead to financial strain and debt.
- Setting a budget can help you manage your finances and achieve your goals.
- Debt repayment methods include the snowball and avalanche approaches.
- Foreclosure can result from financial mismanagement or unexpected events, affecting credit for years.
Why Are Money Problems Common?
There are many factors that contribute to money problems. Depending on your situation, you might be dealing with, among other factors:
- A lower income
- A higher cost of living
- Student loan debt
- A medical or other emergency
- Overspending (perhaps due to compulsive shopping)
- Inflation
- A job layoff
7 Common Money Issues
Financial challenges can happen to anyone — whether you are younger or older, rich or living paycheck to paycheck. Here are some of the most common money issues that people come up against.
1. High Credit Card Debt
Credit cards can be a useful tool for disciplined consumers who are trying to build good credit. And there are several perks to paying with a card instead of cash, including convenience, purchase protections, and rewards programs.
But many Americans aren’t able to pay off their account balance every month. According to Transunion, the average household carried $6,580 in credit card debt at the end of 2024.[2]
Thanks to high interest rates, items you charge on a credit card and don’t pay off right away end up costing quite a bit more. As of March 2025, the average annual percentage rate (APR) for credit cards was 28.70%.[3]
The interest you’re charged on a credit card also compounds, which means interest is calculated not only on the principal amount owed but also the accumulated interest from previous pay periods.
While this kind of compounding is a positive thing for a high-yield savings account, it can be a real issue with your plastic. It means a credit card balance can grow exponentially, even if you pay the minimum every month. Add in late charges and the possibility that the interest rate could be increased on an overdue account, and it’s easy to see how consumers get into trouble.
2. A Low Credit Score
Carrying too much debt or failing to make credit card or loan payments on time may result in a lower credit score. A low credit score can make it harder to get a loan, such as a mortgage or a credit card. And even if an application is approved, the interest rate the lender offers may be higher than what’s available to borrowers with better scores. That higher interest rate can make it harder to make payments and keep up with other bills, which can, in turn, further hurt your credit profile.
A low credit score can also negatively impact your ability to get a job or rent an apartment. And, it can take years before negative factors like late payments, defaults, and collections are removed from credit reports.
3. Not Having an Emergency Fund
Setting money aside in an emergency fund may seem like a luxury for those who are struggling to meet everyday expenses. But a solid savings buffer can actually be even more important if you’re living on a tight budget.
Without an emergency fund, any unexpected expense that comes along — whether it’s a high medical bill, a car or home repair, or a temporary job loss — can throw you way off balance. As a result, you might need to use high-interest credit cards, retirement savings (which can trigger penalty charges), or other options that can add even more stress to a challenging situation.
“For the most part, you’ll hear that a healthy emergency fund should cover between three and six months worth of living expenses — which would include rent, mortgage, bills, food, and other essentials,” says Brian Walsh, CFP® and Head of Advice & Planning at SoFi. “And since you never know when an emergency might happen, it’s best to keep your fund relatively liquid.”
4. Spending More Than You Earn
Picking up a morning latte and grabbing lunch out may not seem like it could make or break your bottom line. But just $40 per week spent eating out will cost you $2,080 per year, which is money that could go toward an extra loan payment or a few extra car payments.
If you tend to make spending decisions on the fly (without any type of budget or financial plan in mind), it can be easy to blow through more money than you actually earn, and much harder to achieve your financial goals.
While the causes of overspending are varied, the habit is one of the most common reasons why people get caught in the debt trap. If you don’t have the cash to cover your expenses, you may rely on credit cards to get you through.
Once you start paying interest on your credit card balance, your monthly expenses go up. This can make it even harder to live within your means and, as a result, lead to more debt.
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5. Facing Foreclosure
State foreclosure rates vary, but regardless of where you live, it can be a major concern for struggling homeowners, especially in tough economic times.
People can end up in foreclosure for any number of reasons, including financial mismanagement (buying too much house or choosing a loan payment they can’t afford), or uncontrollable events (such as a job loss or expensive medical condition).
The process is typically slow, but it can be daunting to imagine having to move, especially if it means taking children out of a school or neighborhood they love. And there can be long-lasting financial consequences, as well.
A foreclosure can have a significant effect on your credit, and it can stay on your credit record for years.
6. Student Debt
While getting a college degree can improve your earning potential, the cost of getting that degree continues to skyrocket. And so has student loan debt.
Recent statistics reveal that the average federal student loan debt balance is $38,375.[4] As students leave college and enter the workforce, paying back that money can be a major challenge. Student loan burdens can lead to postponing certain milestones, including homebuying or having children, and saving for retirement.
Recommended: Average Student Loan Debt: Who Owes the Most?
7. Not Saving Enough for Retirement
According to a 2024 AARP survey, 20% of adults ages 50-plus have no retirement savings at all.[5] While having no money in the bank for later life can make some people feel like, “Why even bother trying to save,” know that financial advisors stress that saving something is better than nothing.
Thanks to the magic of compounding interest (when the interest earned on your money gets reinvested and earns interest of its own), even putting just a small percent of your paycheck into a 401K or IRA each month can add up over time.
Recommended: How to Manage Your Money Better
Money Problem Solving
If you recognize that you have money problems brewing or in full force, here are some steps to solve the problem:
Identify the Issue
Though it may be tempting to hide from what is going on, digging in and exploring where your money is going (or isn’t going) is an important move. Is your credit card debt feeling insurmountable? Are your housing and food costs rising too steeply? Did a job loss or medical bill force you into a difficult financial position?
Figure out and face the facts so you can move forward.
Develop and Implement a Plan
Once you know the source (or sources) of your money stress, you are in a position to take action. In a moment, you’ll learn some important ways to take control of financial issues. These include budgeting and paying down debt.
But other specific moves may suit your situation, such as debt consolidation or refinancing student loans.
Seek Help
If despite digging into your money issues, you are feeling unclear of how to proceed or as if there isn’t a feasible solution, reach out for help. There are an array of experts who might be appropriate, from a Certified Financial Planner® professional to a low- or no-cost debt counselor.
How to Cope with Money Issues
If you’re dealing with money problems (or hoping to avoid any future setbacks), here are some money management strategies you may want to put into place.
Setting a Budget
People tend to cringe at the word “budget” because it sounds like work, but having a budget in place can help simplify your finances and improve your money mindset.
To create a monthly budget, you simply need to gather up the last several months of financial statements and receipts and then use them to figure out how much you’re bringing in (after taxes) each month, as well as how much you are spending on average each month.
If the latter exceeds the former, or is so close there’s nothing left over for saving, you may want to drill down deeper.
To see exactly where your money is going you may need to track your expenses for a month or two and then determine exactly how much is going towards nonessential (or discretionary) purchases, where you may be able to cut back.
You may also want to consider adopting the 50-30-20 budget rule. With this type of budget, half your take-home income goes towards needs (or essential expenses), 30% goes towards wants (nonessentials), and 20% goes towards your financial goals — such as debt repayment beyond the minimum, building an emergency fund, and saving for a home or retirement.
Knocking Down Debt
Reducing debt may seem like a tall mountain to climb, but using a systematic approach can help make the process more manageable.
One method you might consider is the snowball method. This involves paying as much as you can each month toward your smallest balance while making the minimum payment on all your other debts so your accounts remain in good standing. Once you’ve paid off that smallest debt, you move on to the new smallest balance and continue this process until you’ve paid off all your accounts.
Another approach you may want to consider is the avalanche method. With this strategy, you start by paying as much as possible toward the debt with the highest interest rate, while making minimum payments on all the others. Once that debt is paid off, you move to the balance with the next-highest interest rate, and so on.
As briefly noted above, debt consolidation is an option as well, perhaps with a personal loan or a student loan refinance.
The Takeaway
It’s common to face money issues throughout your life, particularly when you are just starting out. Some of the most common include overspending, being burdened by debt, not having a financial cushion for emergencies, and not putting enough away for retirement.
Whatever financial challenges you are facing, you may want to clearly assess the issue and then come up with a spending, saving, and debt repayment plan that can help you get back onto solid ground.
Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.
FAQ
What are common money problems?
Common money problems include high-interest credit card debt, lower income, student loan debt, a low credit score, and overspending.
What do people struggle with most financially?
What people struggle with financially will vary from person to person, but debt, inflation, high cost of living, and lack of savings for emergencies and retirement are common issues.
What are 4 common investment mistakes?
Four common investment mistakes include not establishing a long-term plan, letting emotions guide your decisions, attempting to time the market, and not diversifying your portfolio.
Article Sources
- CNBC. 73% of Americans rank their finances as the No. 1 stress in life, according to new Capital One CreditWise survey.
- TransUnion. Growth in Originations Expected Across Multiple Credit Products in 2025.
- Forbes. What Is The Average Credit Card Interest Rate This Week?.
- Education Data Initiative. Student Loan Debt Statistics.
- AARP. New AARP survey findings.
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