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10 Tips for Resolving your Financial Problems
No one is immune to financial problems. Poor planning or going through a tough time, such as a divorce, illness or unemployment, can really tip the scales. Need help? Here are 10 tips for resolving your financial problems .
- Identify the problem
- Make a budget to help you resolve your financial problems
- Lower your expenses
- Pay in cash
- Stop taking on debt to avoid aggravating your financial problems
- Avoid buying new
- Meet with your advisor to discuss your financial problems
- Increase your income
- Be realistic when it comes to resolving your financial problems
- Improve your credit score and adopt good habits
1. Identify the problem
Being in debt does not necessarily mean that you have financial problems . Very few people would be able to buy a house or a car otherwise. However, certain red flags should be taken seriously .
Do any of the following statements apply to you?
- You have many credit cards and you sometimes use one to pay off another.
- You've had to refinance your home to support your lifestyle or pay off debts.
- You are unable to pay off more than the minimum amount required on your credit cards.
- You delay or skip certain payments.
- More than 40% of your gross income goes to paying off debt.
- Your financial situation is a source of stress.
If so, you'll need to take some steps to correct the situation .
2. Make a budget to help you resolve your financial problems
The first step towards managing your financial problems is making a budget . You can use:
- Budgeting software
- An online budgeting tool
- A mobile app
- Or simply a piece of paper, a pencil and a calculator
Write down all of your income and all of your expenses .
To avoid underestimating your expenses, save all of your bills and receipts for a month.
Also consider occasional expenses like school supplies, gifts, vacations, your driver’s licence, etc. Don't forget to budget for paying off your debts .
Pro tip : Many consumer associations offer training on budgeting.
3. Lower your expenses
Analyze all of your expenses to see which ones you can reduce or eliminate .
Think about reviewing various packages, such as your telecommunication services. You could save by ensuring all they do is meet your needs—nothing more and nothing less. You could also start looking for deals, make a food budget and limit the cost of eating out by packing your own lunch.
4. Pay in cash
Paying in cash can help you stick to your budget . Debit and credit cards are convenient, but they can make it harder to track your expenses.
Budget tip : Put your cash in separate envelopes for groceries, entertainment and clothing.
Looking for new tips to help you save? Read our article: 35 tips to help you save money and optimize your budget .
5. Stop taking on debt to avoid aggravating your financial problems
If you tend to make impulse purchases and regret them later, you may want to start leaving your credit card at home .
Avoid taking on additional debt by living within your means. Make sure you have enough to repay your credit card balance and other debts.
6. Avoid buying new
There are many alternatives to buying new .
- Buy used or exchange goods . Check out thrift stores, online classifieds ads and Facebook pages for neighbourhood sales. There are many bargains and opportunities for trades.
- Borrow or rent . This is a good option for items you will use rarely. For example, sign up for a library card to check out books and magazines.
- Do it yourself . Over the long term, using a coffeemaker is much cheaper than buying coffee every day.
- Take advantage of freebies . For example, there are many free shows and activities at festivals.
7. Meet with your advisor to discuss your financial problems
Your advisor can help with your financial problems . They will help you review:
- Your banking package
- Your banking fees
- Your insurance coverage
- Whether you should apply for a reduced interest rate credit card (with an annual fee)
For tips on optimizing your credit card use, read our article : 6 smart ways to use your credit card .
Together, you can also look at the possibility of debt consolidation . Consolidating all of your debts into a single loan with a lower interest rate will help you pay them off more quickly. It will also make it easier for you to manage your finances.
8. Increase your income
Think about ways to increase your income to deal with your financial problems. Here are some options :
- Ask your employer if you can work overtime.
- Offer products and services for extra income.
- Sell items that you no longer use.
- Find a roommate.
- Get a second job.
Be wary of ads that claim you can earn money easily. These are often scams.
9. Be realistic when it comes to resolving your financial problems
Realistic goals will help you stay motivated and reduce your financial stress . If you've overspent for many years, you can't expect to pay off your debts in just a few weeks.
Just like a diet, significantly restricting your expenses will only increase your appetite to spend. Plan a little wiggle room in your budget to treat yourself.
10. Improve your credit score and adopt good habits
Do you have bad credit? That means you'll be offered higher rates on financing. Why? Because you present a greater risk for the financial institution. Here are a few tips to improve your credit score :
- Pay your bills on time.
- Try to keep your credit card balance well below your limit.
- Don't submit too many credit applications.
Once you have managed your financial problems, continue taking care of your personal finances . The money you save will allow you to create an emergency fund. Ideally, this fund should equal three to six months of expenses . If you run into issues, you'll be able to withdraw money from the fund instead of going into debt.
Next, you can start saving to finance other goals, like retirement, travel or your children's education.
Nobody is immune to financial problems. A stroke of bad luck or a poorly controlled budget could happen to anyone. The important thing is to take action and get help from our team of specialists when necessary. With the right support, you'll be able to manage your financial problems.
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6 ways to tackle financial stress
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For many Americans, financial concerns are ever present, especially given the uncertainties of today’s economy. While worrying doesn’t solve much, having a plan to manage financial challenges can help ease some of the stress. Plus, the monetary benefits of dealing with financial problems—paying off bills, saving more and reducing debt—can help improve your overall outlook. Here are some suggestions for tackling your money stress and taking control of your finances.
Identify top sources of financial stress
If financial anxiety is weighing on you, start by identifying the specific issues keeping you up at night. Whether the problem is credit card debt or upcoming bill payments, pinpointing the source of your stress will help you determine your next move .
Create a monthly budget
A budget is a powerful tool for taking control of—and understanding—your finances. It can help you avoid spending more than you have as well as save for future goals. Once you have a full picture of where your money is going every month, you can look for opportunities to redirect some of it to the areas causing your financial stress.
There are lots of apps and online tools to help you track spending or set up a budget. If you have an account with Bank of America, consider using the Spending & Budgeting tool .
Make the most of your income
When money is tight, you may think you don’t have enough to deal with your financial problems. However, it’s important to make the most of the income you do have. Know that small steps add up. You may not be able to cut any one expense by $500 a month, but you may be able to identify five that you can cut by $100 each.
Build an emergency fund
Having money set aside for an emergency—such as car repairs, job loss or illness—can go a long way towards relieving financial anxiety. However, building an emergency fund can seem overwhelming, especially one with enough to cover three to six months of expenses. Don’t get hung up on the amount—what’s important is that you’re consistently setting money aside.
Bank of America offers a Savings Calculator to help you see how much time it could take to hit your savings goal.
Be strategic about reducing debt.
Credit card debt is a common source of financial stress. Not only is it expensive—it can also get in the way of your savings goals. The anxiety antidote: a plan to pay off the debt . If you have balances on multiple cards, consider using the snowball method (paying off your debts one-by-one, focusing on the smallest first) or the high-rate method (concentrating on the cards with the highest interest rates first).
Consider outside help
If you’re not satisfied with your progress in reducing debt, you may want to seek help from trusted resources, such as the Federal Trade Commission and the National Foundation for Credit Counseling. Or if you want guidance on long-term goals, such as saving for retirement or college, financial advisors can help. Finally, your friends and family may be able to offer support—just make sure to set clear boundaries and expectations to avoid damaging those relationships.
The material provided on this website is for informational use only and is not intended for financial, tax or investment advice. Bank of America and/or its affiliates, and Khan Academy, assume no liability for any loss or damage resulting from one’s reliance on the material provided. Please also note that such material is not updated regularly and that some of the information may not therefore be current. Consult with your own financial professional and tax advisor when making decisions regarding your financial situation.
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Money Basics - Financial Problem Solving Strategies
Money basics -, financial problem solving strategies, money basics financial problem solving strategies.
Money Basics: Financial Problem Solving Strategies
Lesson 2: financial problem solving strategies.
Financial problem-solving strategies
Have you ever experienced a financial problem? Do you feel like finances are holding you back from reaching your goals? This lesson will give a brief overview of the general problem-solving process and how to apply it to the most common financial problems.
The problem-solving process
First, let's take a look at a general problem-solving process that you can apply to any situation, not just a financial one.
- Identify the problem . The first step in solving a problem is to identify it. What exactly do you need to overcome?
- Make a plan. What are the steps you need to take in order to overcome the problem?
- Implement the plan . This step actually puts the plan you created in place. While it sounds fairly straightforward, this is usually the most difficult step.
- Evaluate the plan . Although this is listed last, this step might actually occur simultaneously with implementing the plan. Things happen and circumstances change, so you may need to re-evaluate your plan as it is happening.
Identifying the problem
The first step in the problem-solving process is to get to the root of the problem and understand what you need to overcome. Here is a list of the most common financial problems people may face:
- Lack of income/job loss
- Unexpected expenses
- Too much debt
- Need for financial independence
- Overspending or lack of budget
- Lack of savings
When thinking about these common problems, each one falls into one of three areas: You need more money, you need to reduce your debt, or you need to change how you spend.
Making a plan
After identifying the problem you need to overcome, it's time to make a plan. Not sure where to start? No worries! We have you covered with some tips and places to begin.
Problem 1: You need more money . Whether you've lost your job, met an unexpected expense, or are working on becoming more financially independent, a form of income is necessary.
If you are a looking for additional work or maybe just a better-paying job, take some time to update your resume and cover letter. Make sure they are neat, up to date with your most current information, and free of spelling and grammar errors.
Be wary of any advertisements or jobs that offer fast, easy money. A lot of quick-cash methods come with unintended consequences. More often than not, if something sounds too good to be true, it probably is.
Problem 2: You need to reduce your debt . With high interest rates or the need to live paycheck to paycheck, high debt can be debilitating. Sometimes it feels like climbing a neverending mountain with an invisible peak. However, by prioritizing and negotiating your debt, you can make it more manageable.
Try listing all of your debt and the interest rates associated with each. Focus on paying off the ones with the highest interest rates first. If you're having trouble making payments, call the loan company and see if it can offer any solutions for you. The company may be able to lower your interest rate or offer a temporary forbearance to help you get back on your feet. If you need more help tackling your debt, you may want to contact a professional debt counselor like Consolidated Credit.
Problem 3: You need to change how you spend . Going from financial problems to a healthy financial status often requires organization and a shift in thinking. Avoiding overspending, building your savings, and gaining financial independence can often be accomplished with good spending habits.
The first thing you may want to try is creating a budget. There are many templates and resources available to help you create one. Sticking to one can be challenging, but simply having a budget laid out can help you see where you need to start spending less.
In addition to your budget, create a savings plan. Start out small. Even stowing away an extra dollar or two here and there can make a big difference. Also, try placing your savings in a place you cannot easily access. For example, create a savings account at a bank you don't usually use. The more difficult it is to access your money, the less likely you are to spend it.
Implementing the plan
Although the explanation of this part is the simplest, this is often the most difficult part to actually execute. It requires self-discipline and perseverance. The most important part of this step is to know that if your plan doesn't work or if you have a difficult time sticking to it, all is not lost. If it happens, move on to the next step, evaluate your plan, then repeat the process.
Overcoming financial obstacles can require changing your lifestyle, and this does not happen overnight. However, just having a plan itself can help to give you confidence and reassurance that you can eventually overcome whatever is in your way.
Evaluating your plan
As you implement your plan, you'll need to continually evaluate it. Maybe something happens and your original plan needs to change. Perhaps you've learned more along the way and realize that your original plan was incomplete. Or maybe your first plan went as planned and was a success. No matter the circumstances, it is always a good idea to look back and re-evaluate. Try answering these questions:
- Was your problem solved? Did a new problem arise?
- What went right?
- What went wrong?
- What circumstances changed?
- Was there anything you didn't account for?
- What was easy about implementing your plan?
- What was difficult about implementing your plan?
Financial obstacles can often seem debilitating and impossible to overcome. They often create a significant source of financial anxiety . We hope this lesson will help give you the confidence to take on your problem one step at a time so you can conquer your anxiety and move forward.
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9 practical steps to solve your financial problems without an ivy league education.
by Julie Jaggernath
Worried about your debts and trying to decide on the best way to solve your financial problems ? Many people start to wonder if they missed something as they went through school. As adults, we’re expected to know how to manage our money properly. However, either a lot of people skipped that class, or maybe it was never offered. The good news is that you don’t need a degree from an ivy-league university to help you solve financial problems. Here are 9 steps and 8 self-study assignments, a little catch-up homework if you will, from the school of common cents that you can challenge yourself with if you want to solve your money and debt problems :
1. Live on Cash for 2 Weeks
When is the last time you only used cash to pay for your purchases? Debit and credit cards help many people develop bad money habits and the fine line between what they can afford to pay for and what they can afford payments on blurs. With cash, it’s very easy to tell if you can afford to pay for something or not.
Your first assignment is to put all of your cards away for at least 2 weeks. When you need to buy something, you’re only allowed to use cash. After 2 weeks, if you’ve managed to do it, give yourself a passing grade.
How to Stop Living Pay Cheque to Pay Cheque
2. Become Mindful of Your Spending – Increase Your Awareness
Consider what you learned about your spending habits by only using cash. Was it easier or harder to part with cash than pay with plastic? Did you only buy things you needed, or was there also enough money to buy something that you wanted? How much did you have left at the end?
Some studies have found that people spend as much as 15% more per purchase when they use plastic instead of cash. Spending more on every purchase adds up over the years, and if you want debt solutions that last for life, be aware of how you spend your money.
How to Reduce Your Credit Card Debt
3. Find Out Where Your Money Goes - Track Your Spending for 2 Weeks
Where does it all go? Every pay day there’s money in our bank account, but it never seems to last long enough. Solid money management includes being conscious about where your money goes and while it can be a little tedious to figure it out, this exercise proves incredibly revealing even for the most seasoned finance professional.
Another Simple Way to Track Your Money
4. Create a Spending Plan or Budget to Solve & Prevent Financial Problems
Creating a monthly plan for your spending is one of the smartest things you can do for your finances, yet it’s the most overlooked solution to most people’s financial problems. Having a budget or spending plan (spending plan is a synonym for budget) makes life so much easier because you’ve given yourself a guide to decide how you want to spend your money.
Ironically, it’s also one of the things that you’ll likely never learn in a class at Cambridge or Harvard. Not to pick on these universities though; most schools don’t teach students how to create a budget. So to help with this lack of training, your third assignment is to outline your budget.
If you’ve never created a household budget that works, here is a personal budget workbook to get you started or try out this interactive budgeting resource that guides you through the whole process. A budget based on real numbers sets you up for success, so use what you learned when you tracked your spending.
If there’s an expense you want to cut out of your budget, start by reducing it by 50%. This will tell you if you can stick it out for the long term. If you can make having a budget part of your life, you’ll know that you’ve passed this assignment successfully!
5. Find a Replacement for One Large Expense in Your Monthly Budget
Cutting out an expense or changing a habit is easier if you replace it with something else. For instance, if you want to quit buying expensive coffee on your way to work, plan how you can replace this habit with a new one. You might buy yourself a new travel cup and purchase some coffee that you enjoy drinking (and can make at home!). Then change your routine so that you’re not tempted to stop for coffee anyways, e.g. travel a different route to work.
Your fourth assignment is to find one expense that’s taking a real bite out of your budget and find replacement solutions. Cutting back on coffee is just one example. What about your entertainment costs, quitting smoking, or scaling back what you spend on hobbies and recreational activities? You’ll know that you’ve passed this assignment when all of your bills are paid up to date and you’ve got a little extra left in your bank account.
Subscriptions: The Silent Spender
6. Identify Expenses You Can Reduce
Over the next month, identify areas of your budget that need some special attention. Look for ways to decrease your spending with your utilities . Do your laundry with cold water instead of hot; turn the heat down and the lights off when you’re not home. If you have a home phone as well as a cell phone, decide if you need both. Routines can be hard habits to break.
Also identify products or services you no longer need but which you’re still paying for. Many people simply let their bundled services renew from month to month, even when their needs have changed. This might be because they’re too busy to look at their bills carefully, but taking the time to go through your bills line by line and calling the companies to make changes to service plans, or cancel services altogether, can find a lot of hidden cash.
If you haven’t guessed it yet, your fifth assignment is to identify what expenses you can reduce and then create the plan to follow through with your changes. If you’re not sure where to start, here’s a list of our most popular money saving tips . You’ll know you’ve passed this assignment when your bills get a little smaller.
7. Create a Plan to Pay Off Your Debt
Everybody has some, so is it really that big a deal? Yes, it can be. If you have debt that has slowly accumulated over a number of years, you need realistic debt solutions that work for your lifestyle, not quick fixes that you can’t live with for the long term. At some point interest rates will start going up and eventually your income will likely decrease, e.g. when you retire. When either of these things happens, if you have relied on credit to make ends meet, you will find yourself facing some tough choices.
Dealing with debt sooner than later leaves you with more options. That said, many people delay getting debt help because they’re either embarrassed or don’t know where to turn. Here are some of our very best tips to help you deal with your debt . Use these tips to help complete assignment six – create a plan to pay your debts off, but also maintain a reasonable standard of living. You will only be able to pass this assignment if your plan is realistic and you draw on what you learned in the other five assignments.
8. Educate Yourself & Keep Improving Your Level of Financial Literacy
One of the best things any high level university could instill in its students is the desire to learn more. Any degree of learning from our mistakes is worthwhile, especially when we’re educating ourselves about how to manage our money and debt better. Improving our level of financial literacy is always worthwhile and remember, there’s no sprint to the finish line; it’s all about the journey.
Your seventh assignment is to keep learning. Take on more challenges or homework from the school of common cents. Life skills that further develop your new money habits will keep you on track with your budget, help you avoid financial problems, and allow you to plan for your future successfully. And that’s a graduation worth celebrating!
The 5 Most Important Things a University Grad Can Do for Their Finances
9. Get Help with Your Debts & Your Budget – How to Find Financial Help that Will Work for You
If you need help dealing with your debts and finances, don’t be afraid to ask. Your final assignment is optional but will earn you a bonus if you choose to complete it. Seek out professional, objective advice from a reputable non-profit credit counselling organization for a second look at your budget and your plan to deal with your debts. You’ll know you’ve passed this assignment when you come away with additional insight about what you can do to deal with your debts more effectively and implement your budget realistically. Any good solution takes time to follow through with. Your debt didn’t happen over night; paying it off will likely take as much time as getting a degree from an ivy league university.
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Gracious replied on Wed, 10/14/2020 - 8:15am Permalink
How to overcome the financial problems
Mathola replied on Sun, 11/21/2021 - 3:35pm Permalink
9 practical steps to solve your financial and debts problems
Justice Ramsey ... replied on Wed, 12/01/2021 - 6:57pm Permalink
Practical Steps to solve financial problems
Somnath ashok k... replied on Thu, 02/03/2022 - 8:29am Permalink
I'm in very serious problems.please help me ,God bless u
MyMoneyCoach Team replied on Thu, 02/03/2022 - 9:16am Permalink
Give a credit counsellor a call
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Fix Your Financial Problems and Get Back on the Right Track
A monthly budget and a plan can be mighty tools.
Create a budget.
- Track Your Spending
- Spending Issues
If You Have Debt Problems
Debts in collections, find extra money.
- Don't Add On
- An Emergency Fund
People face a wide variety of financial problems. The trouble might begin because you have a hard time or a distaste for budgeting, then it blooms from there into additional issues that can have serious implications.
The key might be as simple as taking the time to identify the source of the problem. You can begin to fix it from there and take control of your finances.
You might be having budgeting problems if you're consistently running out of money before you run out of month, and you find yourself relying on credit cards to make ends meet. You look at what you earn and wonder why it doesn't seem to be enough to cover all your bills even though you earn a good salary.
You might even have a written budget that you try to follow each month, but it never seems to work. This is a prime indicator that you have a budgeting problem.
Start by creating a budget if you don't yet have one. The easiest way to do this is to look at what you spent in each category last month and adjust from there. Common budget categories include:
- Housing (rent or mortgage)
- Savings (emergency fund, sinking fund, and retirement)
- Insurance (auto, health, and life)
- Medical care
- Transportation (car payment and/or commuting expenses)
- Debt service (credit cards, personal loans, home equity loans, and other credit accounts - see our payment calculator below if you're considering one)
- Health care
- Discretionary spending (entertainment, dining out, and "extras")
You might have others that don't appear here, such as child care. Add them in.
Some of these expenses are fixed. They remain the same month after month. Others might fluctuate beyond your control — utility costs can vary by season, or maybe your child-care provider has upped its rates.
Still others, like discretionary spending and groceries, are within your control. You can spend less on these things if you have to.
Track Your Spending and Adjust as Necessary
Add up all the categories you've determined in your budget. You have some tweaking to do if the total is more than your monthly take-home pay. You'll have to cut somewhere, typically from those expenses that you have control over. You do not want to put less toward your savings or debt service if at all possible.
The key to making your budget work is realizing that it's flexible. You can take money from one category and use it in another category if you overspend. For example, you might splurge on concert tickets, but then you'll have to adjust your grocery budget to cover the extra you spent in your discretionary/entertainment category.
Budget meetings are essential if you're married and want to succeed financially. You and your spouse should communicate on a regular basis about the budget, and who's spending what and where.
Again, budgeting software can come in handy here because you can update it when you're shopping and it can prevent you from overspending when you're on separate errands.
Spending Issues: Stick to a List & Play the Waiting Game
Most people have an area in which they consistently overspend. You can address these "leaks" in your budget in a few ways.
- Limit when you go "pleasure" shopping and don't take a credit card with you.
- Create a menu plan , a grocery list and make meals ahead if you tend to spend too much money eating out. Stick to your list no matter what's on sale. If you didn't need steak or five bottles of cola when you were making your list, odds are that it hasn't become a must-buy just a few hours later.
- Time is your friend when it comes to not spending needlessly. You might really, really want that classic bottle of bourbon today. Wait a month to buy it. You're not denying yourself. You're procrastinating. That little gift to yourself can be something like a reward if you find that you've really stuck to your budget at month's end.
You might also switch to the envelope budgeting system. This is basically a cash-only budget — or part of your budget — where you pay cash for your "controllable" categories like groceries and discretionary spending. Put the money you budgeted into an envelope for each category at the beginning of the month and stop spending in that category when the envelope is empty. You might realize that you think twice about dipping into an envelope if you consider that doing so now might empty it out before the month is up.
Too much debt can be crippling. Address this issue as quickly as possible because you won't be able to get ahead financially if you're carrying a large amount of debt.
Consider creating a debt payment plan. List your debts in order of the smallest balance to the largest, or the highest interest rate to the lowest interest rate. This is the order in which you're going to pay them off.
Take the money you were paying toward the first and add it to the payments you're making on the second debt after you've paid the first one off. Continue rolling the money over until you've paid off everything.
But avoid closing credit cards as you pay them off because this can lower your credit score. Part of your score depends on how long you've been borrowing, so closing a card that you've hard for a while can cost you some points. You should always leave at least your oldest card open, ideally with a very minimal or zero balance.
You can often settle debts that have gone to collections by paying less than you actually owe. The creditor will "forgive" or write off the balance.
It's all about negotiation. Call the creditor, start with a low amount and offer a one-time payment. Maybe you owe $3,000. Offer to remit $1,500 right now if possible, if the creditor will "erase" that remaining $1,500 balance. The credit might counter with $2,000. Keep trying.
Do not give the creditor access to your checking account over the phone. Send a cashier’s check by certified mail once you've received a letter confirming your deal and keep a copy of that letter in case there's a question later on.
You might be responsible for paying income taxes on any debt that's forgiven. You could receive an IRS Form 1099-C from the creditor, and a copy is sent to the Internal Revenue Service as well, showing how much of your debt was erased. You must generally report this amount as taxable income on your tax return.
Check with a tax professional to be sure before you report this money on your tax return. You might not receive one at all because these forms generally apply to $600 or more of canceled debt.
You can begin moving forward more quickly if you can get your hands on some extra money to pay off your debts. You might consider selling items you no longer use or look in your budget for things you can cut out without feeling the pain too much.
You might want to consider cutting your cable or cellphone service back to a less expensive package. You might be surprised at just how much you can pay off if you sacrifice a bit of your lifestyle for a while.
Another option is to take on a second job. In fact, you might want to try a combination of all three approaches if you're serious about conquering your debt.
Don't Add On
There's no point in working to get out of debt if you continually add onto it each month. Stop using your credit cards as much as possible. You're effectively just treading water if you make payments then turn around and charge right back up to your previous balance.
Don't Forget That Emergency Fund
Budgeting gurus came up with the concept of an emergency fund for good reason. Maybe life is moving along nicely, then the company you work for goes out of business. You're out of work through no fault of your own. Or maybe you're crossing the street when a taxi hits you. You're out of work while you recuperate and you might have uninsured medical expenses as well.
Having some cash stashed away in an emergency fund might not save the day entirely, but life will be a lot easier than it would have been if you hadn't saved for the unexpected.
It's recommended that you have at least three months' living expenses set aside, and some experts say six months. Yes, that can be an intimidating number if your monthly nut is $3,500 or more. Start small if you must, but start. You'll get there eventually and you might be glad you did.
Credit problems can make it difficult to land a job, rent an apartment, or buy a home. Poor or even iffy credit can affect the interest rates on your car loan and negatively affect your finances. Understand how your credit works so you can identify why your credit score is low and start to fix it.
Two common culprits are making late payments and maxing out credit cards. Paying a week or two late might not ding your score too horribly, but paying 30 days late — or even worse, 60 — can deal it a serious blow.
Your credit utilization ratio is also critical to your credit score. Ideally, you'll want to keep it at less than 30%. This means that your total balances add up to no more than $3,000 if you have credit limits of $10,000.
Internal Revenue Service. " About Form 1099-C, Cancellation of Debt ."
Experian. " Can One 30-Day Late Payment Hurt Your Credit? "
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Are You in Financial Stress? Here are 10 Ways to Beat Your Money Worries
Before money stress beats you, beat it with these ten simple tricks that you can do in a flash.
Do you often wake up in the middle of the night with goosebumps because of money problems? And anxiety is eating you up from the inside because you’re falling behind on your mortgage and your career is going nowhere? It’s financial stress and it’s getting the better of you. But you can fight back!
First, you need to know what is causing your financial stress. So let’s take a look at four common reasons when people think they’re helplessly mired and slowly sinking in in the money quicksand. Then we’ll tackle ten simple solutions on how to get you out of that mud and that sinking feeling of helplessness.
Causes of Financial Stress
Financial stress can go from wreaking havoc on your wallet to ruining your health if you’re not careful. WebMD even listed finances as a common stressor that can trigger long-term diseases and bust your budget even more. As with any problem, the first step is to know the enemy so you can fight it. What is causing your financial stress? The obvious answer may be money, but, surprisingly, not quite so, or at least, not in its black-and-white context.
- Expenses are greater than income: You spend more than what you are earning. You’re maxing out your credit, taking payday loans for trivial things, or taking some cookies from your retirement fund. It’s a spending habit that turns into an addiction.
- Living paycheck to paycheck: You count the days by 15s hoping you’ll make it to the next. Even your toilet paper is replenished every payday because you always totally wipe out your salary paying off expenses and debts.
- Debt: The feeling of being indebted can be terrible. You may even feel shame or disgrace that often destroys relationships between friends and family members. Paying it up off a big chunk of your salary over a long period can make you feel like that rat in the wheel.
- Lack of financial plan: You feel you’ve lost control of your finances because, to start with, you don’t have a goal or financial anchor. You sit there in your dingy that floats aimlessly in the middle of an ocean of spending.
Get Rich Schemes Won’t Solve Your Money Stress
You might think that unless you’re unemployed or in need of emergency cash, having more money solves your problem outright. But often, the more money we have the higher our financial stress . Not to say this it is always the case, but the truth is we have an insatiable thirst for more things that money can buy.
If you think billionaires are just happily singing Kumbaya every day, you can’t be farther from the truth. Many of them are also stressed out than you’d think especially during economic downturns. The more you have the more you can lose, after all.
The real key to dealing with financial stress is to change your behaviour towards money . Spend smarter, invest more and save some.
Fight Financial Stress With These 10 Tips
We have met the enemy and he is us, so goes the popular quote from the classic comic Pogo . In many ways, you are your biggest obstacle to getting rid of financial stress . The following advice will help transform you from enemy to best buddy.
1 TALK POSITIVELY
There is power in words and in the language that you use. Don’t say negative or wishy-washy things like if only you have more money or that you need to stop buying things. Put force and specifics into your thoughts . Say, “ I’ll only buy things that I really need to save for my retirement; ” or “ I will find another income. ” Indeed if you’re seriously looking for another income source, you can earn extra income while you keep your day job .
2 CHANGE YOUR MONEY VIEW
It’s amazing how simply changing your financial perspective can result in drastic improvements . For example, instead of using the formula, INCOME + LESS EXPENSES = SAVINGS; change it to INCOME + SAVINGS = EXPENSES and watch your money grow. It takes discipline to stick to the second formula, but by changing your view, you’ve made the first step.
3 BELIEVE IN YOUR POWER
Believe that you can solve your money problem. There are people who have been in worse financial straits than you, and they’re able to get out of their dilemma . Hopelessness is the idea of losing control over the situation; believe that you still have control over your finances and you start bringing in hope back into your home.
4 FOCUS ON GOOD NEWS
Think of the other great things that you have. Your health maybe. Your family. A great kid. Steady job. Great friends. Solve the things that you can today, and be at peace with those that you can’t for the meantime and life will suddenly be more bearable.
5 LIVE IN THE NOW
Plan for tomorrow but live in the present. Worrying too much about tomorrow is as unhealthy as living in the past. We all can plan so much to safeguard our future; beyond that, you may be shortchanging the present. Play with the kids or take an afternoon walk with your partner. Sometimes, it’s also nice to stop and smell the flowers.
6 AVOID JUNG THOUGHTS OF FAILURE
A bad credit doesn’t mean you’ve failed. It only means you’re caught unprepared. Even some of the most successful people today have, at one point in their lives, failed miserably in their credit. It is what you do after the setback that defines your success.
7 TAKE A BREAK
When you find yourself worrying about the same things every minute, it’s time to jump into that gym or yoga suit. Exercise or join a mediation class to ease out the worries. Keep your mind healthy and your body fit, in fact, even more when problems strike. You’re better armed and focused to solve problems when you are healthy.
8 ASK FOR FINANCIAL HELP
There are financial coaches or specialists who can help people solve their money problems. You can also talk to a family member or close friend and ask for financial assistance if you believe this is to your best interest.
9 CUT YOUR DEBT
The ideal ratio is to limit your debt payment below 40% of your salary . Work out a plan with a financial coach or a professional friend on how to pay up your debts. Identify unnecessary expenses that you can reallocate to debt payment. The faster you can pay all your debts, the better.
10 INVEST AND SAVE
Save or invest at least 10% of your income. This holds true even if you’re paying off debts. Do away with impulsive buying. Cut the credit for the meantime and put the money instead on investments. If debts give you the blues, savings and investments are your stimulants.
IT ALL STARTS WITH YOU!
To beat money stress you must first identify what is causing it. Likewise, you must realize that having more money is not the real solution; rather it’s changing your perspective about money that will help you recover from financial stress. Lastly, by following our ten financial stress-busters above YOU CAN BEAT FINANCIAL STRESS!
Is there a bad financial situation that you were able to come out of? How did you do it?
By Allan Jay
Allan Jay is FinancesOnline’s resident B2B expert with over a decade of experience in the SaaS space. He has worked with vendors primarily as a consultant in the UX analysis and design stages, lending to his reviews a strong user-centric angle. A management professional by training, he adds the business perspective to software development. He likes validating a product against workflows and business goals, two metrics, he believes, by which software is ultimately measured.
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Understanding financial stress
Effects of financial stress on your health, tip 1: talk to someone, tip 2: take inventory of your finances, tip 3: make a plan—and stick to it, tip 4: create a monthly budget, tip 5: manage your overall stress, coping with financial stress.
Feeling overwhelmed by money worries? Whatever your circumstances, there are ways to get through these tough economic times, ease stress and anxiety, and regain control of your finances.
If you’re worried about money, you’re not alone. Many of us, from all over the world and from all walks of life, are having to deal with financial stress and uncertainty at this difficult time. Whether your problems stem from a loss of work, escalating debt, unexpected expenses, or a combination of factors, financial worry is one of the most common stressors in modern life. Even before the global coronavirus pandemic and resulting economic fallout, an American Psychological Association (APA) study found that 72% of Americans feel stressed about money at least some of the time. The recent economic difficulties mean that even more of us are now facing financial struggles and hardship.
Like any source of overwhelming stress, financial problems can take a huge toll on your mental and physical health, your relationships, and your overall quality of life. Feeling beaten down by money worries can adversely impact your sleep, self-esteem, and energy levels. It can leave you feeling angry, ashamed, or fearful, fuel tension and arguments with those closest to you, exacerbate pain and mood swings, and even increase your risk of depression and anxiety. You may resort to unhealthy coping mechanisms, such as drinking, abusing drugs, or gambling to try to escape your worries. In the worst circumstances, financial stress can even prompt suicidal thoughts or actions. But no matter how hopeless your situation seems, there is help available. By tackling your money problems head on, you can find a way through the financial quagmire, ease your stress levels, and regain control of your finances—and your life.
While we all know deep down there are many more important things in life than money, when you’re struggling financially fear and stress can take over your world. It can damage your self-esteem, make you feel flawed, and fill you with a sense of despair. When financial stress becomes overwhelming, your mind, body, and social life can pay a heavy price.
[Read: Stress Symptoms, Signs, and Causes]
Financial stress can lead to:
Insomnia or other sleep difficulties. Nothing will keep you tossing and turning at night more than worrying about unpaid bills or a loss of income.
Weight gain (or loss). Stress can disrupt your appetite, causing you to anxiously overeat or skip meals to save money.
Depression. Living under the cloud of money problems can leave anyone feeling down, hopeless, and struggling to concentrate or make decisions. According to a study at the University of Nottingham in the UK, people who struggle with debt are more than twice as likely to suffer from depression .
Anxiety. Money can be a safety net; without it, you may feel vulnerable and anxious. And all the worrying about unpaid bills or loss of income can trigger anxiety symptoms such as a pounding heartbeat, sweating, shaking, or even panic attacks.
Relationship difficulties. Money is often cited as the most common issue couples argue about. Left unchecked, financial stress can make you angry and irritable, cause a loss of interest in sex, and wear away at the foundations of even the strongest relationships .
Social withdrawal. Financial worries can clip your wings and cause you to withdraw from friends, curtail your social life, and retreat into your shell—which will only make your stress worse.
Physical ailments such as headaches, gastrointestinal problems, diabetes, high blood pressure , and heart disease. In countries without free healthcare, money worries may also cause you to delay or skip seeing a doctor for fear of incurring additional expenses.
Unhealthy coping methods , such as drinking too much , abusing prescription or illegal drugs, gambling, or overeating. Money worries can even lead to self-harm or thoughts of suicide.
If you are feeling suicidal…
Your money problems may seem overwhelming and permanent right now. But with time, things will get better and your outlook will change, especially if you get help. There are many people who want to support you during this difficult time, so please reach out!
Read Are You Feeling Suicidal? , call 1-800-273-TALK in the U.S., or find a helpline in your country at IASP or Suicide.org .
The vicious cycle of poor financial health and poor mental health
A number of studies have demonstrated a cyclical link between financial worries and mental health problems such as depression, anxiety, and substance abuse.
Financial problems adversely impact your mental health. The stress of debt or other financial issues leaves you feeling depressed or anxious.
The decline in your mental health makes it harder to manage money. You may find it harder to concentrate or lack the energy to tackle a mounting pile of bills. Or you may lose income by taking time off work due to anxiety or depression.
These difficulties managing money lead to more financial problems and worsening mental health problems, and so on. You become trapped in a downward spiral of increasing money problems and declining mental health.
No matter how bleak your situation may seem at the moment, there is a way out. These strategies can help you to break the cycle, ease the stress of money problems, and find stability again.
When you’re facing money problems, there’s often a strong temptation to bottle everything up and try to go it alone. Many of us even consider money a taboo subject, one not to be discussed with others. You may feel awkward about disclosing the amount you earn or spend, feel shame about any financial mistakes you’ve made, or embarrassed about not being able to provide for your family. But bottling things up will only make your financial stress worse. In the current economy, where many people are struggling through no fault of their own, you’ll likely find others are far more understanding of your problems.
[Read: Social Support for Stress Relief]
Not only is talking face-to-face with a trusted friend or loved one a proven means of stress relief, but speaking openly about your financial problems can also help you put things in perspective. Keeping money worries to yourself only amplifies them until they seem insurmountable. The simple act of expressing your problems to someone you trust can make them seem far less intimidating.
- The person you talk to doesn’t have to be able to fix your problems or offer financial help.
- To ease your burden, they just need to be willing to talk things out without judging or criticizing.
- Be honest about what you’re going through and the emotions you’re experiencing.
- Talking over your worries can help you make sense of what you’re facing and your friend or loved one may even be able to come up with solutions that you hadn’t thought of alone.
Getting professional advice
Depending on where you live, there are a number of organizations that offer free counseling on dealing with financial problems, whether it’s managing debt, creating and sticking to a budget, finding work, communicating with creditors, or claiming benefits or financial assistance. (See the “Get more help” section below for links).
Whether or not you have a friend or loved one to talk to for emotional support, getting practical advice from an expert is always a good idea. Reaching out is not a sign of weakness and it doesn’t mean that you’ve somehow failed as a provider, parent, or spouse. It just means that you’re wise enough to recognize your financial situation is causing you stress and needs addressing.
Speak to a Licensed Therapist
Opening up to your family
Financial problems tend to impact the whole family and enlisting your loved ones’ support can be crucial in turning things around. Even if you take pride in being self-sufficient, keep your family up to date on your financial situation and how they can help you save money.
Let them express their concerns. Your loved ones are probably worried—about both you and the financial stability of your family unit. Listen to their concerns and allow them to offer suggestions on how to resolve the financial problems you’re facing.
Make time for (inexpensive) family fun. Set aside regular time where you can enjoy each other’s company, let off steam, and forget about your financial worries. Walking in the park, playing games, or exercising together doesn’t have to cost money but it can help ease stress and keep the whole family positive.
If you’re struggling to make ends meet, you may think you can ease your stress by leaving bills unopened, avoiding phone calls from creditors, or ignoring bank and credit card statements. But denying the reality of your situation will only make things worse in the long run. The first step to devising a plan to solve your money problems is to detail your income, debt, and spending over the course of at least one month.
A number of websites and smartphone apps can help you keep track of your finances moving forward or you can work backwards by gathering receipts and examining bank and credit card statements. Obviously, some money difficulties are easier to solve than others, but by taking inventory of your finances you’ll have a much clearer idea of where you stand. And as daunting or painful as the process may seem, tracking your finances in detail can also help you start to regain a much-needed sense of control over your situation.
Include every source of income. In addition to any salary, include bonuses, benefits, alimony, child support, or any interest you receive.
Keep track of ALL your spending. When you’re faced with a pile of past-due bills and mounting debt, buying a coffee on the way to work may seem like an irrelevant expense. But seemingly small expenses can mount up over time, so keep track of everything. Understanding exactly how you spend your money is key to budgeting and devising a plan to address your financial problems.
List your debts. Include past-due bills, late fees, and list minimum payments due as well as any money you owe to family or friends.
Identify spending patterns and triggers. Does boredom or a stressful day at work cause you to head to the mall or start online shopping? When the kids are acting out, do you keep them quiet with expensive restaurant or takeout meals, rather than cooking at home ? Once you’re aware of your triggers you can find healthier ways of coping with them than resorting to “retail therapy”.
Look to make small changes. Spending money on things like a morning newspaper, lunchtime sandwich, or break-time cigarettes can add up to a significant monthly outlay. While it may be unreasonable to deny yourself every small pleasure, cutting down on nonessential spending and finding small ways to reduce your daily expenditure can really help to free up extra cash to pay off bills.
Eliminate impulse spending. Ever seen something online or in a shop window that you just had to buy? Impulsive buying can wreck your budget and max out your credit cards. To break the habit, try making a rule that you’ll wait a week before making any new purchase.
Go easy on yourself. As you review your debt and spending habits, remember that anyone can get into financial difficulties, especially at times like this . Don’t use this as an excuse to punish yourself for any perceived financial mistakes. Give yourself a break and focus on the aspects you can control as you look to move forward.
When your financial problems go beyond money
Sometimes, the causes for your financial difficulties may lie elsewhere. For example, money troubles can stem from problem gambling , fraud abuse , or a mental health issue, such as overspending during a bipolar manic episode .
To prevent the same financial problems recurring, it’s imperative you address both the underlying issue and the money troubles it’s created in your life.
Just as financial stress can be caused by a wide range of different money problems, so there are an equally wide range of possible solutions. The plan to address your specific problem could be to live within a tighter budget, lower the interest rate on your credit card debt, curb your online spending, seek government benefits, declare bankruptcy, or to find a new job or additional source of income.
If you’ve taken inventory of your financial situation, eliminated discretionary and impulse spending, and your outgoings still exceed your income, there are essentially three choices open to you: increase your income, lower your spending, or both. How you go about achieving any of those goals will require making a plan and following through on it.
- Identify your financial problem. Having taken inventory, you should be able to clearly identify the financial problem you’re facing. It may be that you have too much credit card debt, not enough income, or you overspend on unnecessary purchases when you feel stressed or anxious. Or perhaps, it’s a combination of problems. Make a separate plan for each one.
- Devise a solution. Brainstorm ideas with your family or a trusted friend, or consult a free financial counseling service. You may decide that talking to credit card companies and requesting a lower interest rate would help solve your problem. Or maybe you need to restructure your debt, eliminate your car payment, downsize your home, or talk to your boss about working overtime.
- Put your plan into action. Be specific about how you can follow through on the solutions you’ve devised. Perhaps that means cutting up credit cards, networking for a new job , registering at a local food bank, or selling things on eBay to pay off bills, for example.
- Monitor your progress. As we’ve all experienced recently, events that impact your financial health can happen quickly, so it’s important to regularly review your plan. Are some aspects working better than others? Do changes in interest rates, your monthly expenses, or your hourly wage, for example, mean you should revise your plan?
- Don’t get derailed by setbacks. We’re all human and no matter how tight your plan, you may stray from your goal or something unexpected could happen to derail you. Don’t beat yourself up, but get back on track as soon as possible.
The more detailed you can make your plan, the less powerless you’ll feel over your financial situation.
Whatever your plan to relieve your financial problems, setting and following a monthly budget can help keep you on track and regain your sense of control.
- Include everyday expenses in your budget, such as groceries and the cost of traveling to work, as well as monthly rent, mortgage, and utility bills.
- For items that you pay annually, such as car insurance or property tax, divide them by 12 so you can set aside money each month.
- If possible, try to factor in unexpected expenses, such as a medical co-pay or prescription charge if you fall sick, or the cost of home or car repairs.
- Set up automatic payments wherever possible to help ensure bills are paid on time and you avoid late payments and interest rate hikes.
- Prioritize your spending. If you’re having trouble covering your expenses each month, it can help to prioritize where your money goes first. For example, feeding and housing yourself and your family and keeping the power on are necessities. Paying your credit card isn’t—even if you’re behind on your payments and have debt collection companies harassing you.
- Keep looking for ways to save money. Most of us can find something in our budget that we can eliminate to help make ends meet. Regularly review your budget and look for ways to trim expenses.
- Enlist support from your spouse, partner, or kids. Make sure everyone in your household is pulling in the same direction and understands the financial goals you’re working towards.
Resolving financial problems tends to involve small steps that reap rewards over time. In the current economic climate, it’s unlikely your financial difficulties will disappear overnight. But that doesn’t mean you can’t take steps right away to ease your stress levels and find the energy and peace of mind to better deal with challenges in the long-term.
[Read: Stress Management]
Get moving. Even a little regular exercise can help ease stress, boost your mood and energy, and improve your self-esteem. Aim for 30 minutes on most days, broken up into short 10-minute bursts if that’s easier.
Practice a relaxation technique. Take time to relax each day and give your mind a break from the constant worrying. Meditating , breathing exercises, or other relaxation techniques are excellent ways to relieve stress and restore some balance to your life.
Don’t skimp on sleep. Feeling tired will only increase your stress and negative thought patterns. Finding ways to improve your sleep during this difficult time will help both your mind and body.
Boost your self-esteem. Rightly or wrongly, experiencing financial problems can cause you to feel like a failure and impact your self-esteem. But there are plenty of other, more rewarding ways to improve your sense of self-worth. Even when you’re struggling yourself, helping others by volunteering can increase your confidence and ease stress, anger, and anxiety—not to mention aid a worthy cause. Or you could spend time in nature, learn a new skill, or enjoy the company of people who appreciate you for who you are, rather than for your bank balance.
Eat healthy food. A healthy diet rich in fruit, vegetables, and omega-3s can help support your mood and improve your energy and outlook. And you don’t have to spend a fortune; there are ways to eat well on a budget .
Be grateful for the good things in your life. When you’re plagued by money worries and financial uncertainty , it’s easy to focus all your attention on the negatives. While you don’t have to ignore reality and pretend everything’s fine, you can take a moment to appreciate a close relationship, the beauty of a sunset, or the love of a pet, for example. It can give your mind a break from the constant worrying, help boost your mood, and ease your stress.
Find financial resources
Find U.S. Government Services and Information including Dealing with Debt , Unemployment Help , and Getting Help with Living Expenses . Or call 1-844-872-4681. (USA gov)
Get help with debt and housing problems from Citizens Advice , contact a free debt service at National Debtline or Stepchange , or seek free financial advice from the government’s Money Advice Service .
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How to Solve Financial Problems by Changing Your Attitude about Money
- Whitney Hopler Crosswalk.com Contributing Writer
Editor's Note: The following is a report on the practical applications of Carrie Rocha's new book, Pocket Your Dollars: 5 Attitude Changes that will Help You Pay Down Debt, Avoid Financial Stress, and Keep More of What You Make (Bethany House, 2013).
If you’re struggling to manage your money well but can’t seem to change unhealthy behaviors such as spending too much and saving too little, there’s hope. You can solve your financial problems in 11 steps by looking beyond your behaviors to the attitudes behind them – and then relying on God’s help to change those attitudes to ones that reflect His wisdom.
Here are 11 steps for how you can solve your financial problems by changing your attitudes about money:
1: Overcome the “If only I had more money” attitude. Although it’s natural to want more money when you’re experiencing financial problems, it’s important to keep in mind that simply getting more money won’t solve your problems. You could have a lot more money fall into your life (from a large tax refund to a generous Christmas gift) and yet still get into financial trouble if you don’t change the way you manage money. What’s important isn’t how much money you make, but what you choose to do with the money (of any amount) that you have. So shift your focus from changing your income to changing yourself. Ask God to show you what unhealthy behaviors you need to change (such as over-spending, under-planning, over-borrowing, and under-saving) and to help you change those behaviors by changing their underlying attitudes. Take personal responsibility for the financial mistakes you’ve made in the past, and learn from them. Choose to forgive yourself for your mistakes, and to forgive other people who have made financial mistakes that have impacted your life. Look forward to a healthier financial future.
2: Overcome the “I deserve a treat” attitude. This attitude drives you to make impulsive purchases to reward yourself for hard work or give yourself some other emotional gratification, such as comfort or stress relief. Realize, though, that habitually buying things on impulse wastes lots of money as your small expenditures add up to large amounts. The money that you currently spend impulsively to splurge on little treats (from candy bars or cups of coffee to new outfits or gadgets) can help you save up toward more meaningful purchases that would add much more value to your life. Spend some time reflecting on what you’d most like to spend your money on, and why. Clarify the dreams and goals you’d like to pursue once you’ve saved enough money for them – and then remind yourself of those dreams and goals, to motivate yourself to refrain from impulsive spending and allocate the money you would have previously spent frivolously to savings instead.
3: Overcome the “It won’t happen to me” attitude. It’s tempting not to think about emergency expenses until you must deal with them, but since life is unpredictable, you’ll inevitably have to deal with expenses that you didn’t expect – from car or home repairs to hospital bills for emergency room visits. Rather than go into debt when emergency expenses hit, you can manage such expenses well if you’ve saved for them in advance. Work to set aside at least three to six months of income in an emergency savings fund. As you do, keep in mind four different financial priorities: regular bills (which are both urgent and important), goals (expenditures you want to plan for within the next year that are important but not urgent, such as vacations), leaks (impulse purchases that seem urgent but aren’t important), and wastes (expenditures that aren’t either urgent or important, such as money spent on alcohol or gambling). Anticipate the approximate financial cost of important purchases you want to save money for, and then set specific savings goals for each of them.
4: Overcome the “I’ll fake it ‘til I make it” attitude. This attitude leads you to buy things simply because they’ll make you appear wealthy, rather than for their intrinsic value. Pray for the ability to overcome the psychological needs that may be fueling this behavior in your life (from wanting a personal sense of accomplishment through what you buy, to trying to impress other people socially through an image of wealth). Practice developing a contented attitude by regularly focusing on the good aspects of what you already have and diverting your thoughts away from what you don’t have. Ignore advertising as much as possible; instead, discern what you want for yourself, based on your own values.
5: Overcome the “I can’t afford it” attitude . If you feel guilt or shame when spending money, despite the fact that you actually can afford what you’re purchasing, you may be suffering from this attitude of excessive deprivation. Recognize that it’s okay to indulge in purchasing expensive items and experiences that are meaningful to you and won’t put you in debt. If your frugality is negatively impacting your life or your relationships with other people, ask God to help you become more generous. Then start a habit of giving more to others through your church and charities, and buying some things you’d especially enjoy for yourself.
6: Change the self-talk in your mind . Honestly examine the thoughts that run through your mind about money and challenge them regularly to discern whether or not they reflect biblical truth. If not, intentionally replace inaccurate, unhelpful thoughts about money with true and healthy thoughts.
7: Stand up to pressure to make unhealthy financial choices. Pray for the willpower you need to resist spending money irresponsibly again, and whenever you’re tempted, ask God to help you in that moment. Develop strategies to help you successfully manage your money well, such as closing every credit card except for one and paying mostly cash for your purchases. Remain committed to lasting change.
8: Create a spending plan. Plan how you intend to spend, give, and invest the money you have. This is similar to a budget, but rather than focusing on your financial constraints, a spending plan focuses on your financial goals. Include your predictable monthly expenses (such as groceries and utility bills), your predictable non-routine expenses (such as vacations and new clothes), and your unpredictable expenses (emergencies).
9: Pay off debt . Work diligently to pay off all of your debts by focusing on one debt at a time. List your debts in order of balances owed (regardless of interest rates), and then work your way through the list, paying off the lowest balance loans first and moving on – one by one – to the highest balance debts until they’re all paid in full.
10: Reduce your expenses going forward . Be creative about reducing your expenses as much as possible, from using coupons to buying different items during the seasons they’re on sale.
11: Hold yourself accountable. Track your expenses regularly and study where your money is going so you can keep adjusting your spending to reflect your values.
Start a financial journal today for how you will begin taking these steps and keep a log of how you do! Don't beat yourself up when you fail, get up and try again. Financial wisdom takes time to practice and learn.
Adapted from Pocket Your Dollars: 5 Attitude Changes that will Help You Pay Down Debt, Avoid Financial Stress, and Keep More of What You Make , by Carrie Rocha, copyright 2013 by Pocket Your Dollars. Published by Bethany House Publishers, a division of Baker Publishing Group, Minneapolis, Mn., www.bethanyhouse.com .
Carrie Rocha owns and operates PocketYourDollars.com , one of the most popular couponing and personal finance sites on the web. She shares money-saving ideas she learned as her family eliminated $50,000 in debt in two-and-a-half years. A sought-after media personality, Carrie has been featured on Wall Street Journal Radio, Glamour, Yahoo! Finance, CNNMoney.com, FoxBusiness.com, and many other magazines and websites. Carrie lives with her husband and two daughters in Maple Grove, Minnesota. Learn more at www.pocketyourdollars.com .
Whitney Hopler is a freelance writer and editor who serves as both a Crosswalk.com contributing writer and the editor of About.com’s site on angels and miracles . Contact Whitney at: [email protected] to send in a true story of an angelic encounter or a miraculous experience like an answered prayer .
Photo Credit: ©GettyImages/primipil
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