Balancing finances is becoming a challenge for most families, but it is important to believe that there is a solution. Fortunately, it’s never too late to get your financial life in order, and even if you’re deep in debt, there are ways to keep your financial situation from taking a toll on your mental health.
When you have a problem, it’s good to solve it, right?! And when it comes to a financial problem, trying to hide or ignore it can be worse and cause the famous snowball – experts love to refer to debt as a “snowball” to demonstrate the loss of control of many and its effect.
With that in mind, here are some steps for you to solve your financial problems – whatever they may be.
Research the causes of your debt
The first thing to do is try to understand how your debt started. Think about the attitudes you had and reflect on it. Then gather all your debts and calculate to know how much you owe. See also who you owe.
Knowing the total amount of your debt and to which companies and/or people you owe will help you to be a little more relaxed. This is because with this very clear information you will be able to understand what you did and you will be able to think of alternatives to get rid of these expenses.
Treat the problem as a solution
Due to high interest rates, it is very common for financial problems to grow exponentially. But if you were able to create a problem, you will also be able to find a solution. By looking at the problem as something without a solution, accommodation is seen as acceptable and passivity becomes a natural and dangerous excuse.
The truth is that depending on the amount of money involved in a problem, there is no easy and quick solution. There will be moments of doubts, sacrifices and extremely difficult decisions, but the determination to follow the plan needs to be greater than anything else. Ending the problem needs to be your number one priority.
In complicated situations, as in the case of debts, it is very common to mask the real fragility caused by the problems. Choosing a culprit other than ourselves (the credit card, the overdraft or the “super sale”) is very comfortable and makes our sleep more peaceful.
However, we need to stop kidding ourselves and learn that credit tools are just tools, but their use stemmed from a personal decision – someone went out there and used it. That, yes, is the real culprit.
Use techniques to avoid spending your money
Having attitudes that will help you not to spend money on superfluous things or when you are away from home will not only prevent you from spending more and becoming more indebted, but will also make you feel more relieved.
So when you go out, leave your card at home and leave with a limited amount of cash that is for emergencies only, cancel your other credit cards and avoid going to tempting places. That is, avoid places that you know you will want to buy something that is not extremely necessary.
It may be difficult at first, but after a few months it becomes a good habit that you take for life.
learn new habits
In order not to get into debt again, you need to review your habits. The process of getting out of debt involves abandoning old habits that harm your financial life and learning those that will help you have a better financial life. Soon, you need to understand what bad attitudes you have and what you need to adopt to improve.
Start studying finance
Seeking financial education to acquire a critical view and help you improve your situation is a good alternative. This is because you begin to understand that money is a resource that eventually runs out and that it must be used responsibly.
As you advance in your studies, you will learn to use your money better, you will know how to deal with your expenses, you will discover ways to eliminate and negotiate debts and you will even know how to make money work.
One tip is to give yourself small goals to eliminate your debts and save money. As you reach these established personal goals, you will feel more confident, with more self-esteem and strength to reach the final goal: to be free of debt and with a stable financial life.
These tips are a good way for you to solve your financial problems. But if you still can’t do it alone, ask for help! Advice or ideas from friends and family, and especially professionals, can help.
What causes the lack of money?
The lack of organization and management of expenses is one of the reasons for the lack of money for most people. Indiscipline in control, high standard of living, impulse purchases and extraordinary expenses are some of the causes of financial lack of control.
The financial imbalance appears when you notice the inability to organize the budget and the difficulty in resisting purchases that are not really necessary. Despite the importance and necessity of money, it should not be the center of concern. Otherwise, the chances of harming physical and mental health are great.
Below are some possible causes of lack of money.
- Spending more than your budget allows : it is always important to remember that the credit card limit is not an additional income and, therefore, you need to control yourself when you see promotions or attractive installment options;
- Lack of knowledge to plan the budget: you notice that this happens when the end of the month arrives and you don’t know where the money went;
- Difficulties saving money due to extra expenses like medical issues or unemployment: reasons like these cause unplanned money to be spent.
How to get organized to get out of debt?
To end the cycle of indebtedness once and for all, you need to learn how to better equate expenses based on how much you receive monthly and how much debt you have. We separate some tips that will help you in this matter. Check out:
Know how much you earn and how much you spend
First of all, it is important to know your expenses and how much you earn. Only then will you know how much you can spend in the month. Organizing your budget is key to getting out of debt.
Also, keeping your budget within the limit of 30% of what you earn is a good practice that can avoid creating new debt. Yes, we know that talking is easy, but building this habit can also help you put your money to better use.
Negotiate with creditors
One way out to regularize your situation is to negotiate with whom you owe. After knowing the size of your debt and being able to identify your monthly payment capacity, it is much easier to negotiate the most expensive and old debts with creditor institutions.
The tip is: before making this contact, set a limit on how much you can allocate to debts. Ask for a proposal to pay this debt under better conditions and check your budget if the amount suggested by the operator is in line with what you defined.
Think about your plans
Planning and trying to anticipate spending is another golden tip! How about starting to search for tickets and accommodation right now? Are you going to close a travel package? So negotiate and start paying early. With this, not only will you know how much you will spend, but you will also be able to save money by booking in advance.
Take control of your expenses
All the tips we are citing only work when you start to adopt new consumption habits. That doesn’t mean you should stop consuming, but make a commitment to yourself to get out of debt and create more rigorous financial goals with your money.
Therefore, do a self-assessment of your consumption habits and see if they are all really fundamental for your moment. Speaking of which, did you know that there are financial apps that can help you when it comes to controlling expenses and taking the first steps in investments? Seek help from technology can help you with spending control.
Write down all your expenses
In addition to using applications, another way to control the budget is to write down all expenses. Thus, it is possible to identify your financial profile more clearly, as well as understand what are the focal points that are impacting your financial health.
Use a notebook or spreadsheet. The important thing is to be able to map all monthly expenses, including minor ones. To make it easier, we’ve put together an example of a spreadsheet for you to put this habit into practice right now.