Struggling with money can be one of the most demoralizing and challenging issues people deal with. It can sometimes feel like nothing you try makes even a dent in your financial problems. That doesn't have to be the case! Here are ten ways you can make real differences in your finances starting today.
Have the Right Mindset
The first step to dealing with any problem is getting yourself into the right mindset to tackle it. If you're mentally ready to make changes, they'll be easier to manage, and will be changes you can keep up with. A few suggestions about mindset:
- Forgive Yourself- If your financial problems come from overspending, or bad habits, forgive yourself for what's happened in the past and resolve to do better in the future.
- Temporary and Permanent Changes- Keep in mind that some changes you'll need to make to fix your financial problems will have to be permanent changes so you don't end up in the same situation again. Other changes though may be temporary ones until you're on a more solid financial footing.
- Comparing Yourself with Others - It's human nature to compare our situation to that of others, but there's never a perfect match-up. Stop comparing your apples to their oranges and don't try to "keep up with the Jones's". Keep in mind that the best financial plans are the plans are the ones that match your needs and your resources.
Be Honest with Yourself - How Did You Get Here?
One of the hardest steps in getting yourself out of financial difficulties is taking a hard look at how you got into such a situation. You may have encountered unexpected expenses due to medical issues, family changes like divorce, or unemployment and have money woes through no fault of your own. On the other hand, it's so easy to spend on a credit card, you may have overspent or only paid minimums on credit card debt for too long or bought more house than you can honestly afford. Figure out how you ended up where you are, and you may even have some clues for fixing things and preventing future problems.
Make a Budget (and Stick to It)
Examining your income and expenses will allow you to have a clear picture of what money comes in and where it's going. Be honest with yourself when you divide expenses into "needs" and "wants". Remember, some of the "wants" can return with caution once your finances are in better shape. Making a realistic budget can put your money in sharp focus.
Set Realistic, Concrete Goals
Simply setting a goal of "getting out of debt" is both too vague and too difficult to wrap your brain around in any meaningful way. Instead, try to set a series of smaller goals. Those smaller goals will be rewarding to cross off your list and you'll feel like you're gaining some momentum -- both are satisfying ways to really feel your progress. You might also consider goals that include lifestyle changes if overspending or temptation are part of what's gotten you into trouble.
Remember - Small Steps Add Up
Drastic changes can make adjustments to fix your financial problems seem impossible to live with. Keep in mind that it probably didn't take you a week to end up in financial difficulties, so it will likely take a while to fix them. Small steps all add up, whether it's frequent payments on debt, small amounts you don't spend or you save, or small expenses that add up quickly. Keep the small steps going in the right direction and they'll grow into larger steps to recovery.
Know When to be Ruthless and When to Cut Yourself a Break
What are your priorities? Are you so eager and ready to get out of debt that you're wanting to sell your house and move in with friends or family until your debt is resolved? Is there one small weekly treat that would make giving up a lot of luxuries in other areas of your life feel less burdensome? As with weight loss, an all-or-nothing solution doesn't work for most of us. The best solution will be one you can live with, that will help you keep good financial habits.
Think Outside the Box, Try Something New
Does the income line in your budget consist of one thing -- your paycheck? Depending on your situation, you might consider some additional ways to make some income you can put toward a better financial position. Would you drive for a ride-sharing service or pick up a part-time job on weekends? Would someone you now appreciate a trusted babysitter? Do you have some skills you could use to tutor? Think about some additional ways to bring in some temporary income.
As you work toward financial stability, and perhaps start to add a few luxuries to your budget, consider them carefully. Do you really miss those things, or were you just bothered by not having them when you were cutting back more drastically? Is there a less expensive alternative that would work as well for you? Can you settle for a new pair of shoes instead of a new wardrobe, or a trip to auto detailing rather than a new car?
Check Your Progress
As you accomplish your small goals, make sure you check your progress. Are you making headway? Do you need to adjust your goals or spending habits to pay down debt more quickly? Have other things changed in your life that will affect your financial situation?