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Most of us have been through periods of financial hardship. Sometimes, it’s a long-term issue. We’ve got debts to repay, and our income barely covers our bills. There’s not always much left for any kind of life, and it’s easy to get depressed.
On other occasions, something comes up. We face a costly repair, we welcome a new life into our family, we need a new car, or a global pandemic throws our usual balance completely off, and our finances suffer.
For many of us, one bad month, or one large expense is the difference between managing or not, and it’s fair to say that this year has left many facing a period of financial uncertainly.
If you are living paycheck to paycheck, or thereabouts, things can fall apart very quickly. Out of nowhere, the debts mount, the bills don’t get paid, and panic sets in every time you check the bank. Then, you stop checking the bank, you stop opening bills and you avoid any calls that might come. Even worse, some people carry on spending as before, unable to confront their situation.
It can quickly start to feel as though you are totally out of control, and it is no wonder that money worries are one of the most common causes of stress, depression, and anxiety.
It doesn’t have to be like this. There are plenty of things that you can do to get back in control of your money. Here’s a look at some of them.
Make a Long-Term Plan
When we’re in a period of financial difficulty or uncertainty, it can be very hard to look to the future. But it can be a good idea. Not only does it help you to put things into perspective, but it also gives you a chance to prepare. The future is coming and failing to prepare means that you spend your whole life worrying about money.
Your ultimate long-term goal should perhaps be saving for retirement, which it is never too early to do. A defined benefit plan can help you to see how much you are able to save in a given year for retirement and help you to get started. First, use this benefit plan calculator to see where you stand. A defined benefit plan is an employer-sponsored retirement plan, which can help you to get on the right track with your long-term financial goals.
Set Short-Term Goals
A long-term plan is great, but sometimes you do just need to focus on the here and now, especially when you are struggling. Set yourself very small goals, like not spending any money for a week, or withdrawing a set amount of cash every week and not spending more. Another goal might be to talk to someone who could help, to apply for any benefits you may be owed, to find new ways to earn money online or to set up your household budget. Even tiny actions can help you to feel more in control and get things moving in the right direction.
Create a Household Budget
A household budget is one of the best ways to take control of your finances. So many of us are unaware of the details of our income or outgoings. We don’t know when we are spending more than we should be, or if there are easy ways to save. Set up a simple spreadsheet, including absolutely everything. Then, look for things that you could cancel or contracts that could be reduced.
Move Some Standing Orders
Another easy way that we get into trouble is poor scheduling. We set up our standing orders for dates that suit us at the time. But, then payday changes, other expenses come along, and new contracts are added. Suddenly, all of your bills go out in the same week and you’re broke for the rest of the month. Review the dates that money leaves your account using your budget and get in touch with providers to space things out more effectively.
If you are used to spending without thinking, you need to stop. Use your budget to create allowances for food, transport, entertainment, and even a small pot for luxuries. But, if it’s not in your budget, don’t spend it. Think before you spend money, ask yourself if you can afford it, or if you really need it, and try to be more conscious of your situation.
Talk About it
One of the biggest mistakes that we make with money is worrying in silence. Speak to someone, whether it’s a friend or a professional advisor. There’s often more help and advice out there than you might think, you just need to ask.
Don’t let your money worries control your life. Take back control instead. Often, simply taking action (however small), or speaking with someone that you trust, can help you to feel better, and help you to spot solutions. Don’t suffer alone, and don’t ever ignore what is going on in your accounts. Take control today for a better financial future.