You know how it feels. Payday isn’t for another week and you don’t know how you’re going to make your funds stretch. We’ve all been there, and regardless if it’s a one-time thing, or a regular situation it’s rarely fun. If you want to overcome your money problems, here are 11 simple ways to prevail over your financial challenges and achieve your goals.
Table of Contents
Get Organized
The first step forward when learning to manage your money is to figure out what is going on with your finances. Life gets busy, and it’s easy to get behind or ignore your finances.
If that’s you, now is the time to assess your situation. You want to collect a few pieces of information.
First, collect your paychecks. If you have side hustles, include what you earn with them. You want to count all sources of income.
Next, log into your bank account to see what you have in your checking account and savings account. You may even want to print off your last bank statement since that will help with the next steps.
Finally, review your outstanding debts. If you have student loans or credit card debt, you want to eventually begin a repayment plan.
Identify Where You’re Struggling
As you begin to organize your finances, you want to assess where you’re struggling. It should be a natural process, so don’t overthink it.
Where are you overspending? Are you struggling at certain points each month? Do you feel that you’re earning enough?
Ask yourself these questions to help you identify where you’re facing headwinds.
Create a Simple Budget
Budgeting gets a bad rap, but it’s necessary to help you get back on track. Fortunately, it’s not difficult to create a budget.
In fact, it’s quite simple to create a budget. Start by taking the information from the first step to start. You want to have what you earn and all your monthly expenses, no matter how minimal they seem.
The goal is to have money left over at the end of each month. You can use those remaining funds to work toward your goals.
If this all seems overwhelming, there are numerous budgeting apps that can help you. They can track your spending so you can identify expenses to cut.
Refocus on Your Debt Repayment
Debt, especially credit card debt, can make it challenging to reach financial goals. Attacking that debt is essential to getting on the right track.
As you begin to manage your budget, you want to write down all of your debt. List out the interest rate as well since that is helpful to know.
You want to pay off the smallest debt first and make at least the minimum monthly payments on the remaining balances.
Don’t overlook contacting the issuers of all of your credit cards to see if they can reduce the interest rates on your account. Any reduction will make it easier to pay them off in full.
Create a Savings Goal
One of the top reasons many people get off track is they don’t have savings to help them deal with emergencies. As you begin budgeting, it’s essential to find ways to start saving money.
This will help you stop living paycheck-to-paycheck and begin to increase your net worth. The first step is to create an emergency fund.
It’s best to save $500, then $1,000, then work towards saving one month’s worth of living expenses. Use that as a building block to reach three months.
Automate Your Saving
We all have busy lives. It’s easy to forget to save cash on a regular basis. This can derail your goals. The best way to avoid this is to automate your savings, with a preference for an online bank.
Online banks, such as CIT Bank, pay super competitive rates and have no fees. Most banks don’t charge fees to automate transfers and it can be established within minutes.
Determine if You Need to Increase Your Income
Cutting costs is a fantastic way to get back on track financially. Unfortunately, you can only cut so far. As you review your finances, determine if need extra money to reach your goals.
While reducing expenses is limited, additional income is unlimited. Identify potential side hustle ideas that fit you and look for ways to take advantage.
Be careful not to spend too much of the extra funds. Instead, use them to stick to your budget and reach your goals.
Stop Using Your Credit Card
A credit card can be a fantastic financial tool to use to optimize your finances. However, if you’re dealing with extenuating financial problems it may only be making the problem worse.
Credit card debt can be debilitating. Adding to it, while struggling, is the last thing you want to do. Unless you’re facing an absolute emergency, it’s best to leave the credit card at home.
Start Investing, if Able
Investing in the stock market may seem like an impossible task when you’re struggling financially. Ultimately, you need to cover your essentials first.
Once you do that, you want to identify how you can start investing. You don’t need a lot to start either, as many investment apps for beginners let you start with next to nothing.
Revisit Your Finances Monthly, Then Quarterly
A financial plan is not a set-it-and-forget-it situation, especially in the beginning. You want to revisit your budget monthly to ensure you’re not missing anything significant.
This helps you optimize your finances to verify that your money is working as hard as possible. Once you feel you don’t need to look at your finances monthly, it’s fine to move to quarterly.
This may seem difficult, but most budgeting apps do much of the work for you. Take advantage of this to reduce the time you spend on the activity without negatively impacting your finances.
Give Yourself Grace
The most important thing when trying to get back on track financially is to extend yourself grace. Improving your finances takes time, and that’s fine.
You will make mistakes. We all do. Take that into account when you work to become financially stable.
Learn from those mistakes, and apply those lessons to your budget. Furthermore, don’t overlook treating yourself occasionally. Set a simple number and enjoy it.
You may not realize it, but a simple act like that can encourage you to push forward. Not only that, but it will give you a taste of what financial freedom is like.
How to Multiply Your Money
Get-rich schemes are typically scams. However, there are ways to truly grow your wealth. While not flashy, they can help you build real wealth.
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Ways to Make Money on the Side
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I’m John Schmoll, a former stockbroker, MBA-grad, published finance writer, and founder of Frugal Rules.
As a veteran of the financial services industry, I’ve worked as a mutual fund administrator, banker, and stockbroker and was Series 7 and 63-licensed, but I left all that behind in 2012 to help people learn how to manage their money.
My goal is to help you gain the knowledge you need to become financially independent with personally-tested financial tools and money-saving solutions.
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