It’s easy to fall into a financial rut. If you’re struggling to make ends meet, get out of debt or save toward something, it can start to feel like you are simply running on a treadmill without seeing any progress. If your life seems to be work/sleep/repeat with no end in sight and you feel like your money, or lack of it, is controlling you instead of the other way around, here’s how you can change all of that.
Set Your Goals
First, identify what you want. These goals might include getting out of debt, buying a home, saving for your child’s education and retiring with a certain amount of money in the bank. You probably have a mix of short, medium and long-term goals, and the long-term goals probably rely on accomplishing the short- and medium-term ones. You may want to sit down with a financial professional at some point to firm up these goals and identify the concrete steps you need to take to reach each one of them, but to start with, simply identifying them is probably enough.
Know Your Current Situation
Do you have credit card debt, medical debt or student loan payments to make? Do you feel like you’re spending too much but you don’t know how to stop? Maybe the problem is that you work in a field where you simply do not make enough money. You might be able to look for another employer, or maybe it’s time to think about switching careers altogether. Do a rough assessment of the challenges and possibilities in your current situation before you take a deep dive into the nuts and bolts of your financial life.
Look at the Numbers
Many people lose control of their finances because they simply have a great deal of anxiety around them. However, at some point, you’re going to have to sit down and look at your income and where your money is going. You can get apps that help you track your spending, and some people find sitting down with a friend to look over paperwork or even talking to a therapist about the process can help. Once you have a sense of your spending over a month or two, you can put together a budget.
Make the Changes
There may be many areas that you have not considered where you could save money. For example, if you are paying off student loans, you may be able to refinance them at a much lower interest rate, giving you lower monthly payments. It’s easy to do comparisons of online lenders who may be able to offer you a good plan. You can probably cut back on some of your discretionary spendings, such as buying clothes. If you need to make big changes, such as switching to a new line of work, it could be necessary to create a plan for training or education. Throughout this process, the key is to identify actionable steps that will get you to the concrete goals that you need to reach.