Tired of Struggling Financially? (Do These 10 Things Now)
Have you grown tired of worrying about paying bills by living from paycheck to paycheck? Well, you are not alone. In the summer of 2017, a CareerBuilder survey showed nearly 75 percent of Americans live paycheck to paycheck. In other words, a vast majority of us struggle financially. A recent poll conducted by CNBC stated 25 percent of Americans worry about finances all the time, especially when it comes to earning enough money to cover standard household bills.
As we try to recover from the worst economic collapse since the Great Depression, how can you shed the stigma struggling financially and discover the exhilaration of financial freedom? Do the following 10 things now, and you should be able to turn a bad financial situation into one that you have control over even in the worst of economic times.
Create a Monthly Budget
A savvy general does not go into battle without a game plan. Coaches of professional sports teams spend countless hours watching film and devising new plays. Educators at all levels complete lesson plans to map out the course of an academic year.
The road to financial freedom starts by creating a game plan that is called the monthly budget.
You have several options for working with a personal finance software tool that includes a template for a monthly budget. The “I’m not good at math” excuse does not cut it when it comes to stop struggling with money. You can never expect to climb out of the money pit until you get a strong understanding of where you stand financially.
Start by writing down your monthly wages, followed by bills that arrive in the mail every month. Then, calculate what you pay for groceries, clothes, and other variable costs. After you complete your first monthly budget, you should know whether the household is in the red or in the black. If you are bleeding money, then you have to find a way to increase income and/or reduce expenses.
You might not get into a groove with the monthly budget until after a couple of months of crunching numbers. The point is to get into the habit of conducting one of the most important steps to stop struggling financially.
Lower Credit Card Debt
Although worrying about making more money should be at the top of your personal finance priority list, getting out of credit card debt should be a close second. Credit card debt sucks the life out our personal finances. With interest rates in the 20s and 30s for many consumers, and annual fees added to the cost of doing business with a credit card provider, it can be difficult to take a large chunk out of credit card debt.
Yet, there is way to do it, without having to donate blood several times a week. Gather every credit card you use that includes department store issued credit cards.
Write down every debt incurred from each credit card, with the smallest amount owed at the top of the list. Add up the current minimum payment dues for each card. Figure out if you can increase the minimum payment for each card by a little as $10. Pay off the smallest outstanding credit card debt first, and then pay what you can above the minimum amount due for the other cards. With more money available because of the first paid off credit card, you should apply the extra cash towards paying off the second lowest amount of debt owed on a credit card.
After you get well into knocking off the balances due on your credit cards, you should ask one critical question: How many credit cards do you really need? The answer is one, and that should be used for mostly emergency expenses.
Think Like a Plumber
What does a plumber have to do with climbing out of a financial hole to make a fresh start? Well, a plumber fixes leaks, which is exactly what you need to do: Fix spending leaks. Pull out the most recent bank statement and review the expenses you made for the previous month. Does anything stand out?
Here are a few spending leaks that people have to fix to stop struggling financially:
- Dining out frequently
- Making impulsive purchases
- Unused gym membership
- Lending money to friends and family members
- Never read subscriptions
- Exorbitant bank fees
Let’s address the first two spending leaks: Dining out frequently and making impulsive purchases. Before COVID-19, Americans dined out more than ever, as this 2019 report from CNBC indicates. How the restaurant industry moves forward is uncertain, but there is one certainty for people struggling financially: Eating at home can save a considerable amount of money. Now, about those impulsive purchases. According to a study released by The Checkout, 90 percent of Americans are impulse buyers that rack up an average of $200 per credit card purchase.
We have discovered another reason to cut down on the use of credit cards.
Earn More Money
What exactly does it mean to earn more money Do you walk into your manager’s office and demand a pay raise? Do you look for another job that pays more money? Do you plead to your supervisor to give you more hours? All these ideas involve trying to get more money for the job you call a career.
You can make more money and not have to do it at work.
Here some ideas to generate more cash flow, without getting fatter paychecks:
- Rent out a room in your home
- Work a second job
- Sell something of value that you make
- Work as an independent contractor
- Hold a garage sale
- Invest in a mutual fund
- Promote a great business idea with a Go Fund Me page
- Monetize YouTube videos
- Sign up for a bank account bonus
Freelancing has morphed into a multi-billion dollar industry. You use the same talents that you provide for your employer outside of the office or worksite. There are several websites dedicated to matching freelancers with clients. All you have to do is create a profile, upload a portfolio of your work, and start applying to open jobs. You make money on the side, and you can often do it from the comfort of home.
- Learn how to make $300 fast!
Moratorium on Large Purchases
You know that new car you have thought about for a couple of years. How about the roofing job you have put on hold for quite some time. Maybe you have thought about installing a privacy fence. Life does not have to stop just because you are struggling financially, or does it.
If you are hurting for money now, wait until the first payment comes due on a large purchase, such as a new car, an entire new roof, or a shiny new privacy fence.
You should always consider a major purchase like an appliance or a home entertainment system by first following these suggested percentages for budgeting ordinary monthly household expenses.
- Housing-Between 25 and 30 percent
- Food-Between 10 and 15 percent
- Transportation-Between 10 and 15 percent
- Insurance (Including health)-15 and 25 percent
- Transportation-Between 10 and 15 percent
- Clothing-Between 5 and 10 percent
- Utilities-Between 5 and 10 percent
When you are tired of struggling financially, you have to prioritize your spending. Necessities like food and housing sit at the top of the priorities list. A new car or an addition to the garage need to go on the financial back burner.
Enroll in a Personal Finance Course
When you take a finance class in college, you learn how to manage someone else’s money. Personal finance course teaches you how to manage your own money. Unlike brick and mortar finance classes, you have plenty of options to learn how to take care of your finances online. Many of the personal finance courses represent curriculum taught by a continuing education programs, and the goal is not to earn a high grade, but to upgrade your knowledge of personal finance topics. The classes can last just a few hours or run the course of a typical semester.
How long the personal finance class takes is up to you. What is not up to you is taking steps to discover ways to stop struggling financially.
Online learning is the best option for many adults that have to balance work schedule and home responsibilities. You can watch videos of class lectures whenever you have time, and the best part is you can rewind lecture videos to repeat sections that ensure you remember the most important points. Basic personal finance courses teach students how to balance checkbooks and follow a monthly budget. If you understand the fundamental concepts of personal finance, then you can move on to more complex topics like building a stocks and bonds investment portfolio.
Work with Personal Finance Software
You might have heard about personal finance programs such as iCash, Quicken, and Microsoft Money. The software programs consist of two general categories, which are tax preparation and money management. Within both categories are several sub-categories that can help bolster your personal finance knowledge. Although paying taxes has a major impact on your personal finances, our focus is on the numerous topics that form the foundation for money management.
Most personal finance software programs give you the digital tools to organize and track a wide variety of topics.
- Auto pay bills
Some personal finance software programs download from online sources, while you have to install other types of personal finance software programs on your computer’s hard drive. Before you decide on the software programs that helps you take control of your personal finances, you should give each one a test run to determine whether you have the skills and knowledge to maximize the technical features associated with each program.
Here is a list of highly rated personal finance software programs:
- Account Xpress
- Microsoft Money
Expert Advice from a Financial Counselor
A growing number of Americans that face a personal financial crisis have turned to a certified counselor to get back on their feet again. Although there is a negative stigma attached to working with counselors in general, collaborating with a personal finance counselor should be considered a positive move. Even people that have their personal finance houses in order should consider working with a money management counselor to ensure long lasting financial stability. If you have filed for bankruptcy, one of the stipulations handed down by the judge might be an order to seek advice from a personal financial counselor.
Deciding to seek help from a personal financial counselor is a much different decision than choosing the right one that meets your needs. Many life coaches mix in a little personal finance knowledge for clients, but you want to work with a certified personal finance counselor that has compiled a proven record of helping people gain sound financial footing.
Here is a short job description for a personal finance counselor:
- Provide a detailed analysis of a client’s banking, credit card, and investment activity
- Support clients to stay with an agreed upon personal finance recovery plan
- Create strategies that match the unique personal finance needs of different clients
- Prepare and explain personal finance reports
- Monitor changes in wealth and accumulation of debt
- Recommend new personal finance strategies
- Encourage adapting to rapid changes
Speaking of Change
Yes, adapting to rapid changes is a huge element in boosting your personal finances. You also have to make huge changes in the way you address personal finance issues. Starting to use coupons to save money and cancelling your sports channels is not enough.
You have to make big adjustments that impact your personal finance behavior.
Focus on utilities first, such as running the air conditioner only when it becomes too unbearable to stay indoors without it running. Wash clothes that are actually dirty, not clothes you wore for just a few hours at a neighborhood get together. Get into the financially and physically healthy habit of preparing meals at home, and then saving the leftovers for a no cost do over the next day. Start taking care of errands in one full swoop to save money on gas. Used items are no longer taboo when you want to stop struggling financially.
Switch to Bi-Weekly Bills
Living paycheck to paycheck, at least for the time being, can be easier to do if your make a subtle adjustment as to how you pay off debt. Every one of your debts come due once a month. Ask each of the creditors to extend you the courtesy of paying off debt by making bi-weekly payments.
When you are on a monthly debt plan, you make 12 payments per debt every year. Going on bi-weekly payments reduces the amount of money you send creditors because you extend the number of full payments to 13. Is this some kind of trickery? The answer is no because when you make 26 bi-weekly payments throughout the course of a year, that translates into 13 full payments.
For Emergencies Only
If the COVID-19 pandemic taught us anything, it is to hope for the best, but prepare for the worst. Many people that struggle financially find themselves in a temporary bad loop of personal finance disasters. One of the most effective ways to shorten the bad personal finance curve is to establish an emergency fund, which is otherwise known as a rainy day fund.
Here's how to set up an emergency fund:
- Save tax refunds
- Allocate raises to your savings account
- Deposit checks into an emergency fund account
- Generate money on the side
- Sell things you do not need (That’s a lot of stuff)
- Put overtime pay into a rainy day fund
All the sage advice in the world that teaches you how to stop struggling financially means nothing unless you get the ball rolling by doing one thing.
Establish personal finance goals and calculate your savings rate.
You do not want to set overly lofty goals that you cannot achieve and thus, leave you discourage enough to continue down the path of financial distress.
Here’s how you set attainable personal finance goals:
- Write down a broad goal
- Break the goal down to several achievable tasks
- Prioritize each task
- Put a deadline on each task
- Follow through by completing each task
Putting an end to your financial struggles requires a renewed sense of discipline. Get your personal finances back on track by creating reasonable goals.