It’s easy to fall into a loop of despair when you are struggling with your financial situation and don’t see a way out. However to have any hope of getting out you will need to draw a line in the sand and take stock of where you really are financially. Once you have accepted this and are totally on board with this mentally, hopefully a shift in your mindset will occur, one that has moved from avoidance to once that is now of acceptance. Below are a couple of points that I used to help me get out of this helpless feeling and back on the path towards financial stability.
Take responsibility for your past financial actions
I know it’s not much, but the day I took total responsibility for my poor financial situation was the day I could (eventually) see myself on firmer financial footing. All of the bullshit went away once I took responsibility and vowed to get my finances in order. For years I’d put my head in the sand, blamed others for my situation and not really taking a hard look at myself and my actions. After taking responsibility I went through all of my debts to find out exactly where I stood and began to map an outline of getting out of debt and more importantly started to look for ways to increase my income.
If you don’t know your starting point, you can’t set a destination. Once you’ve moved out of the avoidance/head in the sand mindset and have a true and accurate position of where you’re finances really are, then you can look to getting on the right track with some planning and accountability. For a lot of us it takes a while to accept that their financial situation is a little fucked up (or a lot), that things may have gone off the rails, however the quicker you take responsibility the quicker your path to financial salvation will begin.
Create a financial plan and stick to it
Once you’ve tallied up all your debts, put together a list of your upcoming bills, outlined any assets (including a list of what you can sell now to reduce debt) and your current income stream(s), now it’s time to make a plan. Like the beginnings of a weight loss plan essentially involving calories spent being greater than calories consumed, the path to improving your financial situation starts with money in being greater than money out (excluding asset appreciation, etc.).
In my case, I cut expenses right down only paying for rent, car/public transport, food basics and limited entertainment. Yes my social life sucked for a while however my financial situation began to improve. I also reached out to debtors to organised payment plans and if there was a time when I was going to struggle with a monthly repayment let them know there would be a delay and paid when the financial situation allowed.
I also cut people and things out of my life that were detracting me from my new financial goals. Another big help was setting up a financial hub where my pay was paid into a transaction account that all debits came out from and any surplus was transferred to a separate savings account. I set this up to essentially run automatically which allowed me to focus on improving my income opportunities.
Whilst reducing my expenses was one thing I needed to improve my income to really make a dent on paying down debt and becoming financially secure. I looked at several things such as getting a pay rise (not available) working more hours (possible) and applying for a higher paying job (not available). I then went about learning about ways to make money such as investing and online business which ultimately put me onto the path of financial prosperity.
You may have a more challenging situation and have others to take care of however (I know no financial situation is the same) if I can become financially successful there is no reason why others can’t. If you are struggling financially, have you taken responsibility? Have you asked yourself if you really doing everything you can be to improve your financial situation? Have you worked on your mindset and looked at setting financial goals?
It’s not going to be easy in the early stages however stick to it, the rewards will be there.
Change your routine and environment
Was there a reason or reasons for the financial issues? Spending more than you earn or trying to keep up with others? Psychological issues leading to spending blowouts? Or is it something else altogether? What changes need to be made to help you on your path to financial redemption? Do you have any negative influences in your life who would like to keep you down, who wouldn’t want to see you successful?
If there was, a change is needed. If there is no major reason, look at your current life to see if there were patterns or habits that led you down this path. Part of the reason you got into these financial issues may have been spending to get over a bad relationship or a past trauma, struggling in a job that you hate or even to get you out for a period from the dysfunctional home you are living in.
Analyse the why and look to make changes. Can you move out of your current home or leave a bad relationship or friendship now? If not start making plans to leave as soon as you can. Can you severely reduce or eliminate negative people in your life? Can you get a better, higher paying job with people you would like to be working for and with or at least take up additional training or education to help this process?
Be firm with yourself and with others, take control of your time and your energy and start living your life for you! If better opportunities are available elsewhere don’t hesitate to make a change. You’ll grow, you’ll learn and become financially successful.
Once you build up repetitive months of paying your bills on time, regularly saving your money, you can expand your financial goals and embark on these with more belief as you will have more faith in yourself. This will enable you to expand your financial goals even further as your trust in yourself grows!
For a lot of us we have ignored the first (or many financial red flags that may have popped up), missing credit card payments, paying a phone or utility bill late, or regularly having a negative balance in your bank account/having your bank account.
Once you head down the slippery financial slope it’s not long before you are at the bottom of massive credit card and personal debts, dreaming of a financial lifeline to pull you out. For those who’ve been in this position know that there is only one who can get you out of this spot and that’s you.
It may take a while to get to this acceptance of your current financial position and the belief you can improve it, but trust me you will be better once you do accept it and believe. For some they may never accept this and only rock bottom such as the ending of a marriage or relationship or having a substance addiction, losing a job or even losing custody of your children may trigger action.
Stay the course
Once you’ve made the relevant changes and enter this new financial approach, there will be periods when you will be challenged and you will be tempted to revert to your previous ways to say this isn’t going to work and to be back at square one. If there is a set back, dust yourself off and get back on the horse. Stay the course and keep believing in yourself and in the belief that you will become financially successful. Trust your process and trust the plan you have put together. Regularly check in with your financial goals and if you aren’t getting near these goals you may need to make some minor adjustments to either your plan or your goals. Once made, resume your approach to financial freedom and keep believing in yourself.
The journey will be long and at times testing, it will be hard at times but it will be rewarding if you trust in yourself and make the decision to take action in righting your financial ship. The first step is acknowledging there is a problem or an issue, the next step is doing something about it! Give yourself a chance and keep believing in yourself, you’ll never know what you could achieve!