Life is unpredictable, and you cannot prepare yourselves for every possible financial scenario. But what you can do is take control of your financial habits. Here are three easy tips to help you overcome your monetary problems.
Own Your Financial Weaknesses
Your financial challenges will not go away unless you own the responsibility for your individual financial situation. No matter how you slice it, it is not the mortgage brokers who are forcing you to buy the homes you cannot afford. Neither is it the credit card companies that make you buy all kinds of “wants” now so that you can pay for them later. If you want your finances to get healthy, you need to recognize and own your financial weaknesses.
Take a look at 60-90 days of all your spending. When you do this, a picture of your financial priorities will emerge, and you can use this information to start making the necessary adjustments. Next, find an accountability partner, an individual who will be able to ask you the challenging questions and will have your best financial interest in mind. Set small achievable goals. Determine the most urgent issue that needs to be resolved and make a plan to tackle it head on. Small, frequent wins like these will help you stay encouraged and see the light at the end of the tunnel.
A debt crisis cannot be worked out with more debt. You will have to reject the impulse of buying your desires or even needs. If you are ready to live on the income you have without relying on credit cards to finance items your current revenue will not support, you need to make all of your cards inaccessible to you. Ask someone to assist you in creating a doable debt repayment plan. If you are more of a visual person, put your debt reduction plan on a fridge and mark off each payment you make. Set up some rewards for yourself as you tackle your debt so that you can celebrate certain milestones. Make debt elimination interesting and fun. Find a relative or friend who can join you in the debt roll-down challenge. It is always easier to have a close friend to help you, cheer you along, and provide a bit of competition.
Think Long Term
Most of you will one day have to face retirement, so put plans in place that will give you the financial margin you need. Long-term planning does not mean becoming a paranoid hoarder who survives on water and noodles to stash ninety percent of their earnings for the future. Some simple and doable ways to incorporate long-term planning into your day-to-day financial lives include becoming mortgage-free as it is a great way to decrease the amount of financial support you will need when you are retired. Create a plan to increase your savings every year. You should get to a point where a minimum of 10% of your gross pay is set aside for long-term saving. Last but not the least, look into long-term care insurance. You may not require it now, but one day you might need to purchase one to protect yourself against huge health care costs.