4 Things I’ve Done to Regain Control of My Money
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Even though money is an inanimate object, it’s very easy to allow it to control you and your actions. For example, it’s easy to feel trapped in debt and believe that you are limited to only a few ways to kill your debt. Like many things money-related, that’s simply not true (check out this list of top 25 ways to pay off debt to see what I mean). A few years ago when my financial situation was less than desirable, I felt completely under the control of my money.
My money told me where to go, what to do, and when my paycheck came in every two weeks I felt like I couldn’t even choose how I wanted to spend it because I had so many bills and expenses.
Sure, I was choosing to pay my bills but it was out of necessity.
I remember feeling obsessed with money, scared of what would happen when it went away and confused because I was unable to track where some of my money would go each month.
Money is a great tool to help us do certain things but it shouldn’t be a tyrant, controlling you. Instead, you should control your money and not feel financially stressed out all the time.
Here are a few things I’ve done over the past few years to become more financially stable and they are actions you can take also.
1. Break the Paycheck-to-Paycheck Cycle
Living paycheck-to-paycheck is a lifestyle that’s hard to break, but there are many reasons why you should. For starters, it can be quite risky to live in between paychecks and allow your bank account to get dangerously low.
Another thing I didn’t like was waiting around until I got paid to cover an expense. Payday was always a pleasant time and the few days before another check came in was the worst.
In order to break the paycheck-to-paycheck cycle, I started living off the previous month’s income. I did this by setting aside the extra money I earned from side hustling. When I quit my job to freelance last year, I used the last two paychecks from my employer to live on while I stacked up enough freelance income to meet my living expenses for at least one month.
Now, I’m currently living off the money I earned last month and the money I earn this month will be spent next month. I feel much better about budgeting and knowing exactly what I can afford since I’m no longer living paycheck-to-paycheck.
The best way to break this cycle is to start putting money in a savings account each month so you have it to fall back on in an emergency. You want to find a bank that has no minimum balance requirements, allows you to automate transfers and pays a decent interest rate.
2. Pay Off Debt
Paying off your debt is one of the best things you can do to regain control of your money. As long as you stay in debt, a portion of your income will always be controlled by your lender and you’ll be held back from making other important decisions with your money.
I’m still in the process of paying off all my debt, but every time I make an extra payment I feel the amount of control I have over my financial situation increase.
Last year, I made a huge dent in my student loans and the year before I paid off my car loan. I hope to have my student loans paid off before the end of this year and having the extra money to use as I please feels very liberating.
The best way to start paying off debt is to lower your interest rate so more of your payment goes towards the actual debt.
Fiona by Even Financial is an excellent option if you want to consolidate or refinance your debt. Fiona lets you compare up to 17 lenders in under two minutes.
After completing a brief application, they provide you with quotes for the best matching lenders.
If you have student loans, SoFi is a great options to lower your rates.
Without debt, you can make more decisions with your money instead of handing it off to someone else.
3. Know Exactly Where the Money is Going
Whether you like to live on a budget or not, it’s important to know exactly where all of your money is going. One of the biggest financial excuses I hear from people is that they don’t earn enough.
I used to think like that all the time too and while my income was on the lower end, I realized that I actually have more of a spending problem.
After looking at my bank account at the end of each month, I’d realize that hundreds of dollars were spent and I had no idea what the money went toward. I understand that sometimes small unexpected expenses can add up along with store purchases, restaurant meals, etc., but not being able to account for hundreds of dollars was unacceptable.
I started tracking my spending first with Mint, then I moved to Personal Capital so I could get a clearer picture of my situation.
I also tightened up my budget and allowed myself $50 to spend on miscellaneous purchases for the month. Sometimes miscellaneous expenses are inevitable no matter how strict your budget is but that doesn’t mean you can’t gain control over your spending each month.
4. Embrace What’s Frugal and Free
Adopting a frugal lifestyle by choice has relieved me from a lot of financial stress. Now that I long longer have to worry about keeping up with the latest trends and fads and spending a ton of money on things that I don’t value, I have much more control over my money.
I know that regardless of how much money I earn, I’ll always be a pretty frugal person. I love finding affordable and free ways to do things so I don’t have to worry about constantly checking my bank account or associating money with having fun and getting things done.
When I try to make plans with some of my friends and family members, money is always a top concern and I really don’t like that. There are so many free and frugal ways to entertain yourself so money shouldn’t always be the underlying factor.
Don’t go through the entire year feeling like you don’t have control over your money or your financial situation. Keep these four actionable tips in mind to regain control and commit to using money as a tool to get you to the next step in life.
Have you ever felt like you had no control over your money? How did you overcome the feeling and regain control? What are your thoughts about adopting a frugal lifestyle? How do you plan to break the paycheck-to-paycheck cycle?
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