Financial stress is something that has been around for a very long time. In fact, did you know that money is one of the top five reasons for divorce? It’s also a factor that can push some people toward drastic actions, including suicide.
For many, there never seems to be enough money, and even the best budgeters can be thrown off track by unexpected changes. Personally, my financial history includes a mix of smart money habits and a few less-than-ideal choices.
So, what can we do to improve this crucial aspect of life?
- Understand Your Current Financial Situation:
1:(a) list your “liquid assets” (bank and saving account balances), and (b) your “short-term debts” (unpaid bills, credit card debt and any personal loans).
2: (a) write down your income details, and (b) your regular expenses (rent or mortgage payments, groceries, utilities, transport or vehicle costs, clothing, entertainment, etc).
You may need to track your spending for a while to assist with this part.
- Determine Your Financial Priorities
Reflect on what’s most important to you when it comes to money. This will guide you in creating a budget that aligns with your values.
- Create a Realistic Financial Plan
Whether your goal is to reduce credit card debt or save for something significant, creating a budget is essential. Remember the saying: “What gets measured, gets managed.”
- Prepare for the Unexpected
Life is unpredictable. From unexpected medical expenses to sudden car repairs, surprises can derail even the best financial plans. Having an emergency fund can help cushion the blow of these unforeseen events.
- Start Investing Early
Begin saving as soon as possible, even if you start small. The idea is to make your money work for you. As Robert T. Kiyosaki advises, “Pay yourself first.” Ensure you’re taking steps to protect and grow your wealth.
- Manage and Reduce Debt
Explore ways to lower your interest charges or consolidate your debt. Do you have items you could sell to help pay down what you owe?
- Be Smart About Spending
Always look for the best deals, whether that means finding discounts, choosing cheaper alternatives, or cutting back on non-essentials. Sometimes, making something yourself can be more cost-effective than buying it.
- Practice Self-Control
Financial discipline often requires self-control, and having clear goals can help you stay focused.
Remember we always have the power of mind to choose. Most of us need to learn self-control in at least one way, whether that be managing money or something else. Having a goal and an accountability partner will help. Get in touch with me if you’d like support or learn more.