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10 Tips for Resolving your Financial Problems
No one is immune to financial problems. Poor planning or going through a tough time, such as a divorce, illness or unemployment, can really tip the scales. Need help? Here are 10 tips for resolving your financial problems .
- Identify the problem
- Make a budget to help you resolve your financial problems
- Lower your expenses
- Pay in cash
- Stop taking on debt to avoid aggravating your financial problems
- Avoid buying new
- Meet with your advisor to discuss your financial problems
- Increase your income
- Be realistic when it comes to resolving your financial problems
- Improve your credit score and adopt good habits
1. Identify the problem
Being in debt does not necessarily mean that you have financial problems . Very few people would be able to buy a house or a car otherwise. However, certain red flags should be taken seriously .
Do any of the following statements apply to you?
- You have many credit cards and you sometimes use one to pay off another.
- You've had to refinance your home to support your lifestyle or pay off debts.
- You are unable to pay off more than the minimum amount required on your credit cards.
- You delay or skip certain payments.
- More than 40% of your gross income goes to paying off debt.
- Your financial situation is a source of stress.
If so, you'll need to take some steps to correct the situation .
2. Make a budget to help you resolve your financial problems
The first step towards managing your financial problems is making a budget . You can use:
- Budgeting software
- An online budgeting tool
- A mobile app
- Or simply a piece of paper, a pencil and a calculator
Write down all of your income and all of your expenses .
To avoid underestimating your expenses, save all of your bills and receipts for a month.
Also consider occasional expenses like school supplies, gifts, vacations, your driver’s licence, etc. Don't forget to budget for paying off your debts .
Pro tip : Many consumer associations offer training on budgeting.
3. Lower your expenses
Analyze all of your expenses to see which ones you can reduce or eliminate .
Think about reviewing various packages, such as your telecommunication services. You could save by ensuring all they do is meet your needs—nothing more and nothing less. You could also start looking for deals, make a food budget and limit the cost of eating out by packing your own lunch.
4. Pay in cash
Paying in cash can help you stick to your budget . Debit and credit cards are convenient, but they can make it harder to track your expenses.
Budget tip : Put your cash in separate envelopes for groceries, entertainment and clothing.
Looking for new tips to help you save? Read our article: 35 tips to help you save money and optimize your budget .
5. Stop taking on debt to avoid aggravating your financial problems
If you tend to make impulse purchases and regret them later, you may want to start leaving your credit card at home .
Avoid taking on additional debt by living within your means. Make sure you have enough to repay your credit card balance and other debts.
6. Avoid buying new
There are many alternatives to buying new .
- Buy used or exchange goods . Check out thrift stores, online classifieds ads and Facebook pages for neighbourhood sales. There are many bargains and opportunities for trades.
- Borrow or rent . This is a good option for items you will use rarely. For example, sign up for a library card to check out books and magazines.
- Do it yourself . Over the long term, using a coffeemaker is much cheaper than buying coffee every day.
- Take advantage of freebies . For example, there are many free shows and activities at festivals.
7. Meet with your advisor to discuss your financial problems
Your advisor can help with your financial problems . They will help you review:
- Your banking package
- Your banking fees
- Your insurance coverage
- Whether you should apply for a reduced interest rate credit card (with an annual fee)
For tips on optimizing your credit card use, read our article : 6 smart ways to use your credit card .
Together, you can also look at the possibility of debt consolidation . Consolidating all of your debts into a single loan with a lower interest rate will help you pay them off more quickly. It will also make it easier for you to manage your finances.
8. Increase your income
Think about ways to increase your income to deal with your financial problems. Here are some options :
- Ask your employer if you can work overtime.
- Offer products and services for extra income.
- Sell items that you no longer use.
- Find a roommate.
- Get a second job.
Be wary of ads that claim you can earn money easily. These are often scams.
9. Be realistic when it comes to resolving your financial problems
Realistic goals will help you stay motivated and reduce your financial stress . If you've overspent for many years, you can't expect to pay off your debts in just a few weeks.
Just like a diet, significantly restricting your expenses will only increase your appetite to spend. Plan a little wiggle room in your budget to treat yourself.
10. Improve your credit score and adopt good habits
Do you have bad credit? That means you'll be offered higher rates on financing. Why? Because you present a greater risk for the financial institution. Here are a few tips to improve your credit score :
- Pay your bills on time.
- Try to keep your credit card balance well below your limit.
- Don't submit too many credit applications.
Once you have managed your financial problems, continue taking care of your personal finances . The money you save will allow you to create an emergency fund. Ideally, this fund should equal three to six months of expenses . If you run into issues, you'll be able to withdraw money from the fund instead of going into debt.
Next, you can start saving to finance other goals, like retirement, travel or your children's education.
Nobody is immune to financial problems. A stroke of bad luck or a poorly controlled budget could happen to anyone. The important thing is to take action and get help from our team of specialists when necessary. With the right support, you'll be able to manage your financial problems.
- You asked: “How do I make a personal budget?”
I’ll explain faster than I can do 20 push-ups.
A budget can help anyone understand their spending habits, avoid debt, prepare for emergencies and reach their financial goals.
- Finding a tool that helps you organize your budget can be a big help.
It can be anything from an Excel spreadsheet to an app that you download on your phone.
- Identify all your sources of income.
Use your bank statement to identify precisely how much money you make.
You could add up all your deposits, and that’ll tell you how much you have coming in every month.
Don’t be lazy!
Sorry, I’m talking to myself.
- A good personal budget includes three spending categories.
Fixed expenses, that’s like your rent or your phone bill.
That’s groceries, or restaurants or shopping.
And infrequent or annual expenses like insurance, or your driver’s licence renewal and your annual ski pass.
- Experts typically recommend putting 10% to 20% of your gross income towards savings.
Now I know, I know.
That might be painful at first, but no pain no gain!
- Easy for you to say.
- When you deduct expenses from income, you’ll find out if you’re at a deficit or not.
If you are, you might need to make a few cuts to your budget.
Maybe you’re like me and you spend way too much on stylish activewear.
If you have a deficit, it’s easier to cut down on variable expenses like restaurants or shopping.
But if you have any money left over – you can pay off some debt or put some into savings in case an emergency comes up.
Now that you know how to do it, stay on top by keeping track of your budget month to month.
It’s all part of getting into great shape... financially.
I think I’m done.
How about you?
- Only one left!
- You wish.
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1. Give a Cash Gift
2. make a personal loan, 3. co-sign a loan, 4. create a bill-paying plan, 5. provide employment, 6. give non-cash assistance, 7. prepay bills, 8. help find local resources, the bottom line.
- Personal Finance
- Family Finances
8 Ways to Help Family Members in Financial Trouble
During times of hardship, one of the first places many people turn for help is to their loved one and family members. Often people fall into financial difficulties if they experience the sudden loss of a job or are impacted by expensive medical bills. Many well-meaning family members have found themselves sucked into the financial abyss by the problems of a loved one.
Let's take a look at a few options you can consider to help your family members in financial trouble without hurting yourself in the process.
- When a loved one is struggling financially, take a pause before deciding to help and consider whether the problem is temporary or pervasive, and whether they have a plan for avoiding the same pitfalls in the future.
- If you do decide to help, make sure you have a clear agreement between you and the person about the form of help, such as loan or gift, and any terms for repayment.
- If you want to give the person something outright, consider giving them cash, paying one of their bills directly, or providing them with non-cash assistance, like gift cards, or certain resources they need.
- Consider providing them with a job, if you're able to, or help them to create a bill-paying plan or to access local resources like career counseling or training programs.
- If you want to help them with a loan, consider whether you want to make a personal loan or to co-sign a loan they are seeking from a bank or other financial institution.
If your loved one is having a short-term cash flow problem, you may want to give an outright financial gift. Decide how much you can afford to give, without putting yourself in financial jeopardy, and then either give the maximum amount you can afford all at once (and let your loved one know that's the case) or perhaps give smaller gifts on a periodic or regular basis until the situation is resolved. Make sure it's clearly understood that the money is a gift, not a loan to be repaid, so you don't create an awkward situation for the gift recipient.
If you're considering giving them a substantial sum of money, you'll need to keep an eye on the annual gift tax exclusion set each year by the Internal Revenue Service (IRS).
Your family member may approach you and ask for a short-term loan . Talk frankly, clearly write out the terms of the loan on paper, and have both parties sign it. This will help ensure each party is clear on the financial arrangement they're entering into. Some loan details you'll want to include are:
- The amount of the loan
- Whether the loan will be a lump-sum payment , or if it will be divided and paid out in installments upon meeting certain conditions (e.g., securing another job or paying down existing debt)
- The interest rate you will charge for making the loan and how it will be calculated ( compound or simple interest )
- Payment due dates (including the date of full repayment or final installment due)
- A recourse if the borrower doesn't make loan payments on time or in full (e.g., increasing interest charges, ceasing any further loan payments, or taking legal action)
If you are going to lend more than $10,000 and/or you're going to charge an interest rate that is substantially different than the going rate for most borrowers, you may want to talk to a tax professional. There can be unique tax implications for low-interest loans among family members.
Your loved one may be interested in obtaining a loan or line of credit (LOC) to help with short-term financial needs, but what if their credit requires getting a co-signer? Would you be willing to co-sign on a loan or LOC from a bank, credit union, or online lender?
Before simply saying "yes" and essentially lending a family member your good credit , it's important to realize there are legal and financial implications to co-signing on a loan. The most critical thing to understand is that you are legally binding yourself to repay the loan if the other borrower fails to do so. The lender can take legal action against you and require that you pay the full amount, even if you had an agreement between you and your family member that you would not have to make payments.
This delinquent loan will also now affect your personal credit. So if your sister/brother/uncle fails to make payments on the loan on time and in full, the lender can report the negative account activity to the credit bureaus to file on your credit report which, in turn, can lower your credit score.
Co-signing a loan is serious business. The fact that your family member needs a loan co-signer means the lender considers them too great of a risk for the bank to take alone. If the bank isn't sure they'll repay the loan, what guarantees do you have that they will? It may also mean that you could have more difficulty getting a loan for yourself down the road since you are technically taking on this loan and its payment as well.
Before co-signing for a loan, make sure you:
- Ask for a copy of your family member's credit report, credit score, and monthly budget so you'll have an accurate picture of their finances and ability to repay the loan.
- Meet with the lender in person (if possible) and be sure you understand all the terms of the loan.
- Get copies of all documents related to the loan, including the repayment schedule.
- Ask the lender to notify you in writing if your family member misses a payment or makes a late payment. Finding out about potential repayment problems sooner rather than later can help you take quick action and protect your own credit score.
When helping out a loved one in financial distress, there is a risk of getting sucked into a loop of loans and payments; to avoid this, make sure the terms and structure of the loan or gift are clearly defined in advance.
Often, people in a financial crisis simply aren't aware where their money is going. If you have experience using a budget to manage your own money, you may be able to help your family in creating and using a budget as well. To break the ice, you may want to offer to show them your budget and your bill-paying system and explain how it helps you make financial decisions.
As you work together to help them get a handle on their financial situation, the process will point out places where they can cut back on expenses or try to increase their income to better meet their financial obligations.
If you're not comfortable making a loan or giving a cash gift, consider hiring your family member to assist with needed tasks at an agreed-upon rate. This side job may go a long way toward helping them earn the money they need to pay their bills and help you finish up any jobs that you've been putting off. Treat the arrangement like you would any other employee – spell out clearly the work that needs to be done, the deadlines and the rate of pay. Be sure to include a provision about how you'll deal with poor or incomplete work.
If you don't have cash you're able to give or loan to your financially-strapped family member, realize that your time, patience and ability to help them brainstorm and problem solve are also valuable assets you can provide.
If you're uncomfortable or unwilling to give your family member cash, consider giving non-cash financial assistance, such as gift cards or gift certificates. You'll have more control over what your money will be used for, and you can easily buy gift cards in varying amounts at most stores.
You may want to consider prepaying one or more regular bills your loved one receives (rent/mortgage, utility bills, or insurance premiums ) to help them during their current financial crunch. Offering to do something, such as making their car payment, may help them avoid a short-term crisis and give them the little extra time they need to work out of their situation.
You simply may not wish or be able to provide your family member with financial assistance or hands-on help. But you can still play a key role by helping them find local professionals that can steer them in the right direction, such as:
- Career counselor and employment agencies
- Welfare agencies and similar services
- Credit and debt counselors
- Lenders who can provide short-term solutions
The most important step is sitting down with your loved one and asking specifically what help they need to work their way out of their current situation. From there you'll have a better idea of the type of information and assistance they need. For example, if they need to make more money, you could help them look for jobs and update their resume. If they need help repaying credit card debt , you could call local credit counseling agencies to learn what services they offer, how much it costs, and how it could benefit your family member.
Family members and money aren't always a good mix. But, in tough economic times or when faced with unexpected emergencies, your loved ones may truly need your financial assistance. Before you commit to helping, be sure to think through what you can and can't afford to do. Remember, if your own resources are limited, there are meaningful, effective and creative ways to help your family members.
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5 Solutions to the Biggest Financial Problems Families Face
Whether you make a lot of money or a little or have massive amounts of credit card debt or none, more than likely, finances are an issue in most households. Financial problems are common and include difficult issues like not having enough money, losing a job and conflicting financial values. In my little family of four, money is a topic of conversation between my husband and I on a daily — yes, daily — basis.
We regularly discuss our monthly budget, upcoming expenses for the week and how we’re reaching our savings goals. For us, money is a continuous and evolving topic. So whether you’re on top of things financially or still have a way to go, financial issues are inevitable and most important, shouldn’t be ignored.
Let’s take a look at the top five money obstacles families are likely to face and help provide some solutions you can put into action today.
Issue No. 1: Not Enough Income
Each year, Americans say lack of money and too much debt are their biggest financial challenges. Adding to that stress, about 25 percent of families rely on just one source of income, which can make it feel impossible to save money, reduce debt and increase your net worth.
Solution: Embrace a Tough Reality Check If you’re making too little money, the solution, though painful to hear, is simple — eliminate expenses and/or increase your monthly income. Find ways to eliminate unnecessary expenses: minimize dining out, cut your cable package and cancel that pricey gym membership. Take a long, honest look at what your net income really is each month and where that money goes. A part-time job, though not ideal, may be necessary in order to get your finances where you want them to be.
Issue No. 2: Too Much Debt
The average U.S. household credit card debt is over $15,000. The average mortgage debt is $150,000, and student loan debt just over $30,000. Debt is no fun and can be crippling for households.
Solution: Make Debt Reduction a Serious Priority Each month, you probably have very little left over after all your expenses are paid. And while mortgage and student loan debt can often take years to eliminate, pesky credit card debt shouldn’t be a major thorn in your financial life.
If you are caught in the web of credit card debt, the first step is to stop using them —for good. Take a look at your monthly budget and see what expenses you can realistically live without. Try to bring in extra income earmarked solely for credit card debt. Start with the credit card that has the highest balance and slowly make it a priority to work your way out of the hole. Yes, it will take time. Yes, it will be hard. But in the end, the relief you will feel from manageable balances will be more than worth it.
Once your credit card debt is paid off, avoid the temptation of racking up another round of purchases. Make it a habit to save before spending.
Issue No. 3: Job Loss
One in three Americans have anxiety over losing their job. Even people with seemingly secure jobs have seen them come to an end. Job loss is usually shocking and traumatic, especially when household budgets depend on two incomes.
Solution: Have a Plan in Place If you or your spouse were to lose a job, what would you do? If you’re not sure, the first place to start is with an open conversation with your partner — discuss your family’s options. For example, my husband is the breadwinner in our home. And while he used to be self-employed, he now works for an employer.
Our plan, should he lose his job, centers on his self-employment income opportunities to hold us through the interim period between his old and new job. It’s also important to make sure that you do your best to save as much as possible, especially if job security is uncertain.
Issue No. 4: Staggering Health Care Costs
Individual insurance premiums average just over $300 per month under the recently passed Affordable Care Act. Families, of course, should expect to pay much more. No doubt, health care is an expensive necessity.
Solution: See Health Insurance As Mandatory Expense Health insurance is no longer an option, and ironically, having health insurance provides a huge sense of financial security for families. The cost of treatment for even minor illnesses and injuries sans health insurance can be overwhelming. Take time to research health insurance plans that provide balance for your family and make the expense a mandatory line item in your monthly budget. Can’t afford cable and health insurance? Choose insurance and opt for Netflix or Hulu. The financial risk associated with going insurance-free is too high and will likely jeopardize your financial stability in the future.
There are a variety of options that will insulate your family from paying retail for medical services while still fitting into your monthly budget. For example, a high-deductible plan may be something to consider if your family is generally in good health.
Issue No. 5: Conflicting Financial Values
Money is the No. 1 cause of divorce in America, yet it has nothing to do with how much or how little a couple makes and everything to do with differences in goals and values toward money.
Solution: Talk It Out — Get On the Same Page In a marriage, you’re on the same team. This means you need to reach an agreement about how your household will spend and save money. Compromises and open discussions need to happen on a regular basis. In my own life, my husband is the “spender” in our relationship and I’m the “saver.” We compromise by creating a strict budget that allows for some saving and some discretionary spending. For us, if we didn’t communicate about how our money was spent, we’d wind up overspending. Take preventive measures to avoid heated arguments and make sure both of you have a voice in the discussions.
Remember, most important avenues in our lives are full of hard work. Having a happy marriage, moving up in your job, raising children and making money play a critical role in the foundation of your life. If you keep a realistic attitude and are willing to sacrifice today for the security of your financial future, you can and will accomplish amazing feats with your money.
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- How Do I Help Family or Friends in Financial Trouble?
3 Ways to Help Family or Friends in Financial Trouble
When a family member or friend is in financial trouble it’s normal to want to help. They might be in a difficult financial situation due to an emergency such as a job loss, accident, or illness. Maybe they’ve already asked to borrow some cash or maybe they’ve tried to keep it hidden. You want to support them in their time of need, but also have your own bills to pay.
The good news is that lending cash isn’t the only way to help. Although it might not seem like it, often what someone needs to solve their money problems isn’t more money, but a different way of using what they have. Here are 3 ways you can help those you care about overcome their financial challenges:
1. Help Them Make a Budget (And Stick to It)
We make a budget to plan how we want to spend our money. Good budgets break down spending into specific groups so that you can better organize where your hard-earned cash goes. It’s all about striking a balance between what comes in and what goes out. When our budget is realistic it’s easier to stick to it because it aligns with how we want to use our money.
Ask the person you’re helping about their expenses , which is how they spend their income. Your goal shouldn’t be to find fault or blame, but to give a fresh perspective on their situation. Regardless of how much or how little someone earns, their spending decisions decide whether they end up in financial trouble or stay debt-free.
Making a budget is a great first step, but sticking to it is the real challenge. They need to track their expenses to first find out where they’re spending their money. Once they know this and see their habits, they can figure out what to change so that they aren’t spending too much. If both of you are comfortable with it, have your friend or family member report their spending to you. This can be done every month, week, or even day. Having to tell someone how they’re doing will help make them more accountable about staying on track with their plan. Also emphasize that this is their plan : they decided it and they are fully in control of whether it succeeds or fails.
2. Help Them Find Options to Solve Their Debt Problems
You might think that someone would only ask to borrow money when they don’t have any other options. However, they might just not know about those other options to solve their debt problems. Check trustworthy sources for information that could help them. For example, the Government of Canada has a free financial toolkit , and you can always rely on us .
If they do need some extra money to help them through a difficult time, then there are tools like lines of credit or home equity loans, which can have lower interest rates than credit cards. Of course, there are risks to these loans , just as there are risks to taking any loan. That’s why there should always be a plan for getting out of debt before any more money is borrowed. Otherwise, they might get stuck in a cycle of taking out loans that just becomes harder and harder to dig out of.
Getting more money and borrowing more money are not the only options for dealing with debt. Your friend or family member can also try to negotiate a debt settlement , where they or a third party like us get creditors to accept a lower payment for all of their unsecured debts.
When settlement isn’t possible or preferable, there’s also the option of a Debt Management Program (DMP). When we start a DMP for someone, we bring all of their credit card and unsecured debt payments together into one monthly payment. Interest rates are usually greatly reduced or waived going forward, and the payment will be tailored to what they can afford in their budget. On top of that, our professional credit counsellors will help them stay on track to reaching their financial goals.
It’s normal to resist the idea of telling a stranger about your financial troubles. Your friend or family member could be worried about getting looked down on or even punished if they ask for help. Talking to us is free, confidential, and as anonymous as they want it to be. They could come to an appointment by themselves, or you could join them to give moral support and help them understand the information they’re given. There will be no effect on their credit report, jobs, or anything else when they contact us . We’re here to help, not judge.
3. Before You Give or Loan Money, Know Your Own Financial Needs
If you’re thinking about helping your friend or family member with a loan or gift of money, then make sure that your own needs are taken care of first. Remember that it’s always okay to say no when someone asks you for a loan. Important relationships can be hurt because of disagreements over lent money. If they value you as you value them, then they will respect your boundaries. Know how much your budget can handle so that you don’t get into financial trouble too.
Borrowing from Friends or Family
One way to financially help someone without giving them money upfront is to co-sign a loan with them. But beware: this will affect your own borrowing ability, and if they can’t pay the loan back, then you’re 100% responsible for repaying it . Furthermore, regardless who makes the payments, they will be reported on both credit reports, which can hurt your rating if they’re not made on time. On the other hand, if you give them cash and they say they’ll pay you back sometime, then your “loan” will probably end up being a gift . It doesn’t matter how much you trust them. To avoid a lot of pain later on, don’t expect the money back, and never gift money you can’t afford to lose.
If you’re willing to give a loan but definitely need the money back, then make a written loan contract. While there are free templates online that you could use, consider getting legal representation to make sure nothing goes wrong. At the very least, the contract must include:
- The amount of money loaned.
- The months or years they have to pay the loan back.
- How often they’ll make their repayments (e.g. bi-weekly or monthly).
- The interest rate or fees on the loan, including the overall cost of borrowing from you.
- What happens if they fall behind on payments or can’t repay the loan at all.
Triple-check with your friend or family member to verify that they understand everything in the contract. It would also be best for them to seek independent legal advice so that they understand what they’re signing up for. Most importantly, no money should exchange hands until the contract is signed.
We’re Here to Help with Financial Troubles
If you need more advice on how to support your friend or family member through their financial troubles, or if you would like some assistance yourself, then the Credit Counselling Society is always available to help. Give us a call toll-free at 1-888-527-8999 , send us an email , or chat with us anonymously online . Rest easy knowing that those important to you are being taken care of.
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The sooner you start dealing with your debt, the sooner you see an improvement in your credit report If you need some help getting started with a plan, or if you’re not sure if your budget is realistic, contact a non-profit credit counsellor for free, confidential help. Typically, the earlier you contact us, the more options you’ll have.
Why Talk to Creditors?
When you’re in debt, your creditors can help you. But communicating with them effectively is key.
Debt Management Program
You’re not alone if you’re wondering if a DMP is right for you. Here’s what it is and how it works.
Are you curious about what credit counselling is or how it works? Here’s what you need to know.
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How to overcome 8 sources of financial problems & difficulties.
Financial problems and challenges happen to everyone at some point, and the stress and worry can get to you. However, realizing that there is almost always a way out can help you not feel so depressed. You may be able to find the way out yourself, or you may need someone else's perspective to help you find a solution. Below we’ll show you how to overcome financial problems and difficulties and ease your stress. But, one size does not fit all. If your situation is beyond the general help provided here, we’ll also let you know who you can go to for more in-depth help.
1. Identify the Underlying Problem That's Causing the Difficulties
The first step to overcoming financial problems is to identify the underlying issue that’s causing the financial difficulties. Financial problems are usually a symptom of a bigger issue. To come up with solutions that work in the long run, take the time to identify the real source of your financial troubles. Here are some common things to think about:
Your problem may not be listed above or it may be more complex. However, the concept of identifying a specific problem is important because it is more likely to result in a lasting solution. Just like with a leaky faucet; placing a bucket below is temporary. Fix the tap and the leak will stop. Focus on solving the problem that’s causing your money troubles, rather than dwelling on your stress.
2. Create a Budget - Spend Money in a Way That Helps Solve the Problem
One of the best weapons for combating financial problems is a budget. A budget is a monthly spending plan for your money. Creating a budget is like turning the lights on to find your way around a dark room. You no longer need to wander in the dark; banging your shins, tripping over the furniture, and stepping on the dog. Instead, with the lights on, you can see what’s going on and prevent problems before they happen. A budget works much the same way; it guides your spending decisions so that you're spending money on what's really important to you. In this case, you'll spend your money in a way that helps solve your financial problem .
Click here to learn more about creating a budget , or try out our budget calculator that guides you through the budgeting process , points out common problems, and offers suggestions to improve your budget.
Track Your Expenses to Build a Budget That Works
As you create your budget, it’s important that your expenses aren’t just guesses – they need to reflect reality. You may want to track your expenses for at least a couple of weeks (a month is best) to objectively see where you are spending your money and how much you’re spending. Although you may think you know where your money is going, when most people tally up all their purchases for a month, they are usually quite surprised to notice that their spending doesn’t always match up with what they thought their priorities were.
3. Determine Financial Priorities to Guide Your Spending Choices
4. Identify Small Steps You Can Take to Address the Problem & Achieve Your Goals
Look here to get ideas of where find some extra money each month , get the card paid off, and then permanently have $50 extra to use in your budget every month. However, if by the time you reach this goal you’ve learned to get by without this $50, then use it to accelerate the payment of another debt each month, and get all of your debts paid off more quickly.
Look for Things You Can Do, Even Temporarily, to Improve Your Situation
Here are more ideas or steps you can consider taking to improve your financial situation and alleviate difficulties:
- As you look through your budget, ask yourself: Do I want this or do I need it? Will spending this money get me closer to my financial goals or further away? Can I live without it? Learn more about separating needs from wants .
- Do you use credit cards for impulse purchases? This can contribute to a cycle of ongoing financial difficulty and add as much as 50% to everything you purchase . Learn how to reduce or change impulsive spending habits .
- Ask yourself if you can downsize anything in your budget or switch to a less expensive option. If vehicle costs are straining your budget, can you downsize your vehicle, get rid of one vehicle (the average person spends over $9,000 per year to own and operate a vehicle), take transit (80% cheaper than owning a vehicle), or car pool? If your rent, mortgage, or home upkeep is bleeding you dry, can you downsize to something more affordable, rent out your basement, rent a room in your house, rent out the storage space in your garage, or can you take in a student for some extra income?
- If debt is causing you financial problems, here are a lot of ways to reduce your debt or here are a dozen of the most effective ways to get out of debt .
- Can you take on a side job or create another source of income with something you know how to do well?
- Look outside the box, ask yourself tough questions, invite a trusted friend to have a look at your budget and make suggestions, or sit down with a Credit Counsellor and get their suggestions .
- Research viable options that will move you towards your goals. A consolidation loan , speaking with a Credit Counsellor , a Debt Management Program , or some other option may be a possibility.
While doing any of these can be an unappealing thought, don’t just dismiss them because they’ll move you out of your comfort zone. Keep thinking about them and give them some consideration. Come back to these ideas from time to time to see if you can come up with a new angle on decreasing your expenses or increasing your income that might just work for you. Remember, you’re trying to get through a tough a time; you don’t need to do this forever, just to get back on track. If you’re really struggling, an experienced Credit Counsellor can be a great, free source of suggestions .
5. Develop Your Plan to Overcome Financial Problems for Good
Once you’ve come up with some ideas for how to begin tackling your financial problems and difficulties, you can put together a realistic plan to accomplish your goals . Some goals will have a timeline of a few months; others will need a longer timeline, like 24 - 36 months. Write your goals down, but also write down where you’re at now in relation to each goal. For example, if one of your goals is to pay off a $4,000 debt, make sure to write down the current debt balance and your future goal of paying this down to $0. You’ll want to include in your plan the amount of money you’re going to pay on this debt every month so that you can pay it off within your desired time frame. For more help on setting goals, have a look at this . Here are also some tips on setting financial goals with your spouse .
If you’re really feeling overwhelmed and stressed by your situation, you can also reach out to a non-profit credit counselling agency for help . They have professionally trained Credit & Debt Counsellors who can review your situation with you, help you put together a realistic budget, and help you come up with a plan to solve your current challenges and get your finances back on track. Their help is usually free and is always confidential.
6. Review How Things are Going
The last step takes place once you are a few months into working on your plan. Every once-in-a-while, take a few minutes to review how things are going. Is your plan working? Are you making progress toward your goals? If not, you’ll need to take a closer look to figure out why not and adjust your plan. Your plan needs to be realistic, or it’s not going to work. It should also contain some things you weren’t doing before you put the plan in place.
If you keep doing what you were doing before, then you’ll continue to get the same result as before – problems. You’ve got to do something different to get a different outcome.
As you follow your plan and see improvements in your situation, be open to the possibility of fine-tuning the plan. Once you start making some progress, you may find you’re doing better than you thought, or you may come up with some new insights. Improving your plan so that you accomplish your goals more quickly is good as long as your budget can afford the changes and everyone who relies on your budget is okay with the more aggressive approach.
Preventing Future Financial Challenges
Unexpected financial challenges are bound to arise in the future - in fact, research shows that 6 in 10 Canadians will experience major life events that will challenge their prior financial plans . The key to tackling these challenges is to be flexible. Review your budget occasionally and make necessary changes. Build up savings so that you can handle unanticipated expenses without going into debt and putting yourself in a difficult situation.
Overcoming financial problems and difficulties isn’t easy, but by setting some clear priorities for yourself, identifying ways to achieve these goals, and persevering with your plan, you can overcome the challenges and at the same time, put an end to the financial stress.
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vivienne replied on Mon, 12/10/2018 - 4:59pm Permalink
how to overcome 8 types of financial problems
sagar pal replied on Tue, 05/28/2019 - 11:43pm Permalink
MyMoneyCoach Team replied on Wed, 05/29/2019 - 8:51am Permalink
Where to get help
Bandela Pratap replied on Thu, 03/05/2020 - 7:10am Permalink
MyMoneyCoach Team replied on Thu, 03/05/2020 - 8:40am Permalink
Pushkaraj Sawant replied on Fri, 09/04/2020 - 7:21am Permalink
More More Money Problem
MyMoneyCoach Team replied on Fri, 09/25/2020 - 9:40am Permalink
You should speak with a credit counsellor
Diganta Gohain replied on Sat, 09/05/2020 - 8:43am Permalink
Drastic financial problems
MyMoneyCoach Team replied on Fri, 09/25/2020 - 9:43am Permalink
Two places to look for help
Lanie Won replied on Wed, 05/04/2022 - 7:35am Permalink
Nina replied on Sat, 07/08/2023 - 10:42am Permalink
68 years old with little money for the golden years
MyMoneyCoach Team replied on Mon, 07/10/2023 - 2:58pm Permalink
You should speak with a financial planner
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6 ways to tackle financial stress
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For many Americans, financial concerns are ever present, especially given the uncertainties of today’s economy. While worrying doesn’t solve much, having a plan to manage financial challenges can help ease some of the stress. Plus, the monetary benefits of dealing with financial problems—paying off bills, saving more and reducing debt—can help improve your overall outlook. Here are some suggestions for tackling your money stress and taking control of your finances.
Identify top sources of financial stress
If financial anxiety is weighing on you, start by identifying the specific issues keeping you up at night. Whether the problem is credit card debt or upcoming bill payments, pinpointing the source of your stress will help you determine your next move .
Create a monthly budget
A budget is a powerful tool for taking control of—and understanding—your finances. It can help you avoid spending more than you have as well as save for future goals. Once you have a full picture of where your money is going every month, you can look for opportunities to redirect some of it to the areas causing your financial stress.
There are lots of apps and online tools to help you track spending or set up a budget. If you have an account with Bank of America, consider using the Spending & Budgeting tool .
Make the most of your income
When money is tight, you may think you don’t have enough to deal with your financial problems. However, it’s important to make the most of the income you do have. Know that small steps add up. You may not be able to cut any one expense by $500 a month, but you may be able to identify five that you can cut by $100 each.
Article continues below
Build an emergency fund.
Having money set aside for an emergency—such as car repairs, job loss or illness—can go a long way towards relieving financial anxiety. However, building an emergency fund can seem overwhelming, especially one with enough to cover three to six months of expenses. Don’t get hung up on the amount—what’s important is that you’re consistently setting money aside.
Bank of America offers a Savings Calculator to help you see how much time it could take to hit your savings goal.
Be strategic about reducing debt.
Credit card debt is a common source of financial stress. Not only is it expensive—it can also get in the way of your savings goals. The anxiety antidote: a plan to pay off the debt . If you have balances on multiple cards, consider using the snowball method (paying off your debts one-by-one, focusing on the smallest first) or the high-rate method (concentrating on the cards with the highest interest rates first).
Consider outside help
If you’re not satisfied with your progress in reducing debt, you may want to seek help from trusted resources, such as the Federal Trade Commission and the National Foundation for Credit Counseling. Or if you want guidance on long-term goals, such as saving for retirement or college, financial advisors can help. Finally, your friends and family may be able to offer support—just make sure to set clear boundaries and expectations to avoid damaging those relationships.
The material provided on this website is for informational use only and is not intended for financial or investment advice. Bank of America Corporation and/or its affiliates assume no liability for any loss or damage resulting from one’s reliance on the material provided. Please also note that such material is not updated regularly and that some of the information may not therefore be current. Consult with your own financial professional when making decisions regarding your financial or investment management. ©2023 Bank of America Corporation.
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7 Quick Solutions to Typical Family Money Problems
Roman Holovin | December 07, 2022
Summary: Knowing how to solve money problems is crucial if you want to have a good life. Using a budgeting app, investing in cryptocurrency, starting a side hustle, canceling your credit card, building an emergency fund, saving money for retirement, and getting on the same page as your partner are seven great ways to solve family money problems and find financial freedom.
Knowing how to manage money is a tough task, admit it. Living month to month is exhausting and escaping the rat race should be a number one priority if you want to live a good life and, more importantly, provide a good living standard to your family.
In this article, we explore seven money tips that you can incorporate with your family to change your lives—for the better. Here they are:
- Start using budgeting apps.
- Invest in cryptocurrency.
- Start a side hustle.
- Cancel your credit card.
- Build an emergency fund.
- Save money for retirement.
- Get on the same page as your partner.
Now, not all of these tips will work for everyone. That being said, these are tried and true tricks that have helped millions of people escape the chains of debt and enjoy financial flexibility and freedom.
Without further ado, here are seven solutions to typical family money problems.
1. Start using budgeting apps
Budgeting apps can help you manage your family budget and find "leaks" in your financial foundation. This way, you can optimize your expenses. There are a plethora of budgeting apps on the market, and it can be extremely hard to decide which one fits the bill for you. Here are a couple of quick tips on how to create a family budget with a budgeting app:
First, figure out what your family's financial goals are. Do you want to save for a specific purpose, such as a vacation or a new car? Or do you want to get a better handle on your spending to start saving more money? Once you know your targets, you can start looking for a budgeting app to help you achieve them.
Second, set up your budget according to your financial goals. Using an app can help you stay organized and accountable. Both you and your partner should use your budgeting app in harmony to make sure you stay within your financial means.
2. Invest in cryptocurrency
Cryptocurrency investing is one of the best ways to generate money. Many people buy Bitcoin to sell it for a profit later. But you can also "stake" your coins, so you can make an interest (it's called APY) of around 7-10% annually. All that without lifting your finger.
There are many new presales coins that can also increase in price upon the initial coin offering (ICO). Still, if you're new to the crypto world, you'd probably be better off with Bitcoin and Ethereum, the most famous names in the industry. Another good news is that experts predict the crypto market to jump in price now.
3. Start a side hustle
If you're finding it difficult to make ends meet, you might consider starting a side hustle. Freelancing can be a game-changer when it comes to earning extra money in your spare time.
Plenty of digital marketing jobs don't require much in the way of skills or experience but can nonetheless pay you well. So if you're chasing a way to boost your income, why not try freelancing? This way, you can pay the bills with your salary, and have "breathing" room from your side business.
4. Cancel your credit card
Although credit cards offer many benefits and can be a great tool for saving money, many people find themselves falling into the trap of spending beyond their means. This can lead to interest rates growing out of control, leaving you with a mountain of debt that is difficult to repay. In this situation, it is often best to cancel your credit card and focus on paying off the debt . That can let you get back on track financially and avoid further problems down the road.
If you have been sued for credit card debt, you need to respond to the lawsuit as quickly as possible to avoid further financial fiascos. Use SoloSuit to draft and file a written Answer to your credit card lawsuit and increase your chances of winning the case by 7x.
Check out this video to learn more about how to respond when you get sued for a credit card debt:
5. Build an emergency fund
It is essential to create an emergency fund that will cover at least 12 months of unemployment. Many people lose their jobs at least once in a lifetime and having this financial cushion helps to weather the storm.
You should start by setting aside a small amount each month and then increasing the amount as you are able. Once you have reached your goal, you can start to use the funds for other purposes, but it is important to have that safety net in place.
6. Save money for retirement
While it's all fun and games to play "Forever Young" in your 20s, most people don't take the time to prepare for their lives post-50s. And this is wrong. You can't be productive and living on the edge your whole life. This is why you need to start saving for retirement now.
It may not seem like much, but over time that money will compound and grow into a nice nest egg that you can use to support yourself in retirement. So don't wait until it's too late—start saving for retirement now!
There are two easy ways you can stash away money for retirement: First, open a Roth IRA and put $500/month into the account. Second, open a 401(k) account and determine what percentage of your monthly income you can invest into this account (even 1-3% can make a huge difference in the long run).
Both Roth IRAs and 401(k) Plans have tax benefits that will allow you to keep more of your invested money in the future, as opposed to stashing away cash.
7. Get on the same page with your partner
One of the most important things to remember when it comes to managing your finances is that you and your partner need to be on the same page. If one of you is a saver and the other is a spender, it can spell disaster for your financial stability and potentially your relationship.
You need to be able to communicate openly about your spending habits and agree on a budget that works for both of you. Otherwise, you'll find yourself constantly arguing about money and struggling to make ends meet.
Fight off debt and find financial freedom
Solving money problems is a top priority for you, as it can help your family live a better life. Money is often the root of many arguments within families, so by solving any financial issues, you can help to create a more harmonious home.
If you are already struggling with debt, you can fight off debt collectors by requesting that they validate each of your debts before further contact. Send a Debt Validation Letter to debt collectors to force them to prove the debt is yours or cease contact.
The video below explains how a Debt Validation Letter can help you fight off debt collectors and find financial freedom again:
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You can use SoloSuit to respond to a debt lawsuit, to send letters to collectors, and even to settle a debt.
SoloSuit's Answer service is a step-by-step web-app that asks you all the necessary questions to complete your Answer. Upon completion, we'll have an attorney review your document and we'll file it for you.
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Understanding financial stress
Effects of financial stress on your health, tip 1: talk to someone, tip 2: take inventory of your finances, tip 3: make a plan—and stick to it, tip 4: create a monthly budget, tip 5: manage your overall stress, coping with financial stress.
Feeling overwhelmed by money worries? Whatever your circumstances, there are ways to get through these tough economic times, ease stress and anxiety, and regain control of your finances.
If you’re worried about money, you’re not alone. Many of us, from all over the world and from all walks of life, are having to deal with financial stress and uncertainty at this difficult time. Whether your problems stem from a loss of work, escalating debt, unexpected expenses, or a combination of factors, financial worry is one of the most common stressors in modern life. Even before the global coronavirus pandemic and resulting economic fallout, an American Psychological Association (APA) study found that 72% of Americans feel stressed about money at least some of the time. The recent economic difficulties mean that even more of us are now facing financial struggles and hardship.
Like any source of overwhelming stress, financial problems can take a huge toll on your mental and physical health, your relationships, and your overall quality of life. Feeling beaten down by money worries can adversely impact your sleep, self-esteem, and energy levels. It can leave you feeling angry, ashamed, or fearful, fuel tension and arguments with those closest to you, exacerbate pain and mood swings, and even increase your risk of depression and anxiety. You may resort to unhealthy coping mechanisms, such as drinking, abusing drugs, or gambling to try to escape your worries. In the worst circumstances, financial stress can even prompt suicidal thoughts or actions. But no matter how hopeless your situation seems, there is help available. By tackling your money problems head on, you can find a way through the financial quagmire, ease your stress levels, and regain control of your finances—and your life.
While we all know deep down there are many more important things in life than money, when you’re struggling financially fear and stress can take over your world. It can damage your self-esteem, make you feel flawed, and fill you with a sense of despair. When financial stress becomes overwhelming, your mind, body, and social life can pay a heavy price.
[Read: Stress Symptoms, Signs, and Causes]
Financial stress can lead to:
Insomnia or other sleep difficulties. Nothing will keep you tossing and turning at night more than worrying about unpaid bills or a loss of income.
Weight gain (or loss). Stress can disrupt your appetite, causing you to anxiously overeat or skip meals to save money.
Depression. Living under the cloud of money problems can leave anyone feeling down, hopeless, and struggling to concentrate or make decisions. According to a study at the University of Nottingham in the UK, people who struggle with debt are more than twice as likely to suffer from depression .
Anxiety. Money can be a safety net; without it, you may feel vulnerable and anxious. And all the worrying about unpaid bills or loss of income can trigger anxiety symptoms such as a pounding heartbeat, sweating, shaking, or even panic attacks.
Relationship difficulties. Money is often cited as the most common issue couples argue about. Left unchecked, financial stress can make you angry and irritable, cause a loss of interest in sex, and wear away at the foundations of even the strongest relationships .
Social withdrawal. Financial worries can clip your wings and cause you to withdraw from friends, curtail your social life, and retreat into your shell—which will only make your stress worse.
Physical ailments such as headaches, gastrointestinal problems, diabetes, high blood pressure , and heart disease. In countries without free healthcare, money worries may also cause you to delay or skip seeing a doctor for fear of incurring additional expenses.
Unhealthy coping methods , such as drinking too much , abusing prescription or illegal drugs, gambling, or overeating. Money worries can even lead to self-harm or thoughts of suicide.
If you are feeling suicidal…
Your money problems may seem overwhelming and permanent right now. But with time, things will get better and your outlook will change, especially if you get help. There are many people who want to support you during this difficult time, so please reach out!
Read Are You Feeling Suicidal? , call 1-800-273-TALK in the U.S., or find a helpline in your country at IASP or Suicide.org .
The vicious cycle of poor financial health and poor mental health
A number of studies have demonstrated a cyclical link between financial worries and mental health problems such as depression, anxiety, and substance abuse.
Financial problems adversely impact your mental health. The stress of debt or other financial issues leaves you feeling depressed or anxious.
The decline in your mental health makes it harder to manage money. You may find it harder to concentrate or lack the energy to tackle a mounting pile of bills. Or you may lose income by taking time off work due to anxiety or depression.
These difficulties managing money lead to more financial problems and worsening mental health problems, and so on. You become trapped in a downward spiral of increasing money problems and declining mental health.
No matter how bleak your situation may seem at the moment, there is a way out. These strategies can help you to break the cycle, ease the stress of money problems, and find stability again.
When you’re facing money problems, there’s often a strong temptation to bottle everything up and try to go it alone. Many of us even consider money a taboo subject, one not to be discussed with others. You may feel awkward about disclosing the amount you earn or spend, feel shame about any financial mistakes you’ve made, or embarrassed about not being able to provide for your family. But bottling things up will only make your financial stress worse. In the current economy, where many people are struggling through no fault of their own, you’ll likely find others are far more understanding of your problems.
[Read: Social Support for Stress Relief]
Not only is talking face-to-face with a trusted friend or loved one a proven means of stress relief, but speaking openly about your financial problems can also help you put things in perspective. Keeping money worries to yourself only amplifies them until they seem insurmountable. The simple act of expressing your problems to someone you trust can make them seem far less intimidating.
- The person you talk to doesn’t have to be able to fix your problems or offer financial help.
- To ease your burden, they just need to be willing to talk things out without judging or criticizing.
- Be honest about what you’re going through and the emotions you’re experiencing.
- Talking over your worries can help you make sense of what you’re facing and your friend or loved one may even be able to come up with solutions that you hadn’t thought of alone.
Getting professional advice
Depending on where you live, there are a number of organizations that offer free counseling on dealing with financial problems, whether it’s managing debt, creating and sticking to a budget, finding work, communicating with creditors, or claiming benefits or financial assistance. (See the “Get more help” section below for links).
Whether or not you have a friend or loved one to talk to for emotional support, getting practical advice from an expert is always a good idea. Reaching out is not a sign of weakness and it doesn’t mean that you’ve somehow failed as a provider, parent, or spouse. It just means that you’re wise enough to recognize your financial situation is causing you stress and needs addressing.
Speak to a Licensed Therapist
BetterHelp is an online therapy service that matches you to licensed, accredited therapists who can help with depression, anxiety, relationships, and more. Take the assessment and get matched with a therapist in as little as 48 hours.
Opening up to your family
Financial problems tend to impact the whole family and enlisting your loved ones’ support can be crucial in turning things around. Even if you take pride in being self-sufficient, keep your family up to date on your financial situation and how they can help you save money.
Let them express their concerns. Your loved ones are probably worried—about both you and the financial stability of your family unit. Listen to their concerns and allow them to offer suggestions on how to resolve the financial problems you’re facing.
Make time for (inexpensive) family fun. Set aside regular time where you can enjoy each other’s company, let off steam, and forget about your financial worries. Walking in the park, playing games, or exercising together doesn’t have to cost money but it can help ease stress and keep the whole family positive.
If you’re struggling to make ends meet, you may think you can ease your stress by leaving bills unopened, avoiding phone calls from creditors, or ignoring bank and credit card statements. But denying the reality of your situation will only make things worse in the long run. The first step to devising a plan to solve your money problems is to detail your income, debt, and spending over the course of at least one month.
A number of websites and smartphone apps can help you keep track of your finances moving forward or you can work backwards by gathering receipts and examining bank and credit card statements. Obviously, some money difficulties are easier to solve than others, but by taking inventory of your finances you’ll have a much clearer idea of where you stand. And as daunting or painful as the process may seem, tracking your finances in detail can also help you start to regain a much-needed sense of control over your situation.
Include every source of income. In addition to any salary, include bonuses, benefits, alimony, child support, or any interest you receive.
Keep track of ALL your spending. When you’re faced with a pile of past-due bills and mounting debt, buying a coffee on the way to work may seem like an irrelevant expense. But seemingly small expenses can mount up over time, so keep track of everything. Understanding exactly how you spend your money is key to budgeting and devising a plan to address your financial problems.
List your debts. Include past-due bills, late fees, and list minimum payments due as well as any money you owe to family or friends.
Identify spending patterns and triggers. Does boredom or a stressful day at work cause you to head to the mall or start online shopping? When the kids are acting out, do you keep them quiet with expensive restaurant or takeout meals, rather than cooking at home ? Once you’re aware of your triggers you can find healthier ways of coping with them than resorting to “retail therapy”.
Look to make small changes. Spending money on things like a morning newspaper, lunchtime sandwich, or break-time cigarettes can add up to a significant monthly outlay. While it may be unreasonable to deny yourself every small pleasure, cutting down on nonessential spending and finding small ways to reduce your daily expenditure can really help to free up extra cash to pay off bills.
Eliminate impulse spending. Ever seen something online or in a shop window that you just had to buy? Impulsive buying can wreck your budget and max out your credit cards. To break the habit, try making a rule that you’ll wait a week before making any new purchase.
Go easy on yourself. As you review your debt and spending habits, remember that anyone can get into financial difficulties, especially at times like this . Don’t use this as an excuse to punish yourself for any perceived financial mistakes. Give yourself a break and focus on the aspects you can control as you look to move forward.
When your financial problems go beyond money
Sometimes, the causes for your financial difficulties may lie elsewhere. For example, money troubles can stem from problem gambling , fraud abuse , or a mental health issue, such as overspending during a bipolar manic episode .
To prevent the same financial problems recurring, it’s imperative you address both the underlying issue and the money troubles it’s created in your life.
Just as financial stress can be caused by a wide range of different money problems, so there are an equally wide range of possible solutions. The plan to address your specific problem could be to live within a tighter budget, lower the interest rate on your credit card debt, curb your online spending, seek government benefits, declare bankruptcy, or to find a new job or additional source of income.
If you’ve taken inventory of your financial situation, eliminated discretionary and impulse spending, and your outgoings still exceed your income, there are essentially three choices open to you: increase your income, lower your spending, or both. How you go about achieving any of those goals will require making a plan and following through on it.
- Identify your financial problem. Having taken inventory, you should be able to clearly identify the financial problem you’re facing. It may be that you have too much credit card debt, not enough income, or you overspend on unnecessary purchases when you feel stressed or anxious. Or perhaps, it’s a combination of problems. Make a separate plan for each one.
- Devise a solution. Brainstorm ideas with your family or a trusted friend, or consult a free financial counseling service. You may decide that talking to credit card companies and requesting a lower interest rate would help solve your problem. Or maybe you need to restructure your debt, eliminate your car payment, downsize your home, or talk to your boss about working overtime.
- Put your plan into action. Be specific about how you can follow through on the solutions you’ve devised. Perhaps that means cutting up credit cards, networking for a new job , registering at a local food bank, or selling things on eBay to pay off bills, for example.
- Monitor your progress. As we’ve all experienced recently, events that impact your financial health can happen quickly, so it’s important to regularly review your plan. Are some aspects working better than others? Do changes in interest rates, your monthly expenses, or your hourly wage, for example, mean you should revise your plan?
- Don’t get derailed by setbacks. We’re all human and no matter how tight your plan, you may stray from your goal or something unexpected could happen to derail you. Don’t beat yourself up, but get back on track as soon as possible.
The more detailed you can make your plan, the less powerless you’ll feel over your financial situation.
Whatever your plan to relieve your financial problems, setting and following a monthly budget can help keep you on track and regain your sense of control.
- Include everyday expenses in your budget, such as groceries and the cost of traveling to work, as well as monthly rent, mortgage, and utility bills.
- For items that you pay annually, such as car insurance or property tax, divide them by 12 so you can set aside money each month.
- If possible, try to factor in unexpected expenses, such as a medical co-pay or prescription charge if you fall sick, or the cost of home or car repairs.
- Set up automatic payments wherever possible to help ensure bills are paid on time and you avoid late payments and interest rate hikes.
- Prioritize your spending. If you’re having trouble covering your expenses each month, it can help to prioritize where your money goes first. For example, feeding and housing yourself and your family and keeping the power on are necessities. Paying your credit card isn’t—even if you’re behind on your payments and have debt collection companies harassing you.
- Keep looking for ways to save money. Most of us can find something in our budget that we can eliminate to help make ends meet. Regularly review your budget and look for ways to trim expenses.
- Enlist support from your spouse, partner, or kids. Make sure everyone in your household is pulling in the same direction and understands the financial goals you’re working towards.
Resolving financial problems tends to involve small steps that reap rewards over time. In the current economic climate, it’s unlikely your financial difficulties will disappear overnight. But that doesn’t mean you can’t take steps right away to ease your stress levels and find the energy and peace of mind to better deal with challenges in the long-term.
[Read: Stress Management]
Get moving. Even a little regular exercise can help ease stress, boost your mood and energy, and improve your self-esteem. Aim for 30 minutes on most days, broken up into short 10-minute bursts if that’s easier.
Practice a relaxation technique. Take time to relax each day and give your mind a break from the constant worrying. Meditating , breathing exercises, or other relaxation techniques are excellent ways to relieve stress and restore some balance to your life.
Don’t skimp on sleep. Feeling tired will only increase your stress and negative thought patterns. Finding ways to improve your sleep during this difficult time will help both your mind and body.
Boost your self-esteem. Rightly or wrongly, experiencing financial problems can cause you to feel like a failure and impact your self-esteem. But there are plenty of other, more rewarding ways to improve your sense of self-worth. Even when you’re struggling yourself, helping others by volunteering can increase your confidence and ease stress, anger, and anxiety—not to mention aid a worthy cause. Or you could spend time in nature, learn a new skill, or enjoy the company of people who appreciate you for who you are, rather than for your bank balance.
Eat healthy food. A healthy diet rich in fruit, vegetables, and omega-3s can help support your mood and improve your energy and outlook. And you don’t have to spend a fortune; there are ways to eat well on a budget .
Be grateful for the good things in your life. When you’re plagued by money worries and financial uncertainty , it’s easy to focus all your attention on the negatives. While you don’t have to ignore reality and pretend everything’s fine, you can take a moment to appreciate a close relationship, the beauty of a sunset, or the love of a pet, for example. It can give your mind a break from the constant worrying, help boost your mood, and ease your stress.
Find financial resources
Find U.S. Government Services and Information including How to Get Out of Debt , Unemployment Help , and Getting Help with Living Expenses . Or call 1-844-872-4681. (USA gov)
Get help with debt and housing problems from Citizens Advice , contact a free debt service at National Debtline or Stepchange , or seek free financial advice from the government’s Money Advice Service .
Find Government Services , get free Financial Counselling or call the National Debt Helpline at 1800 007 007.
Find government services and information for Managing Debt and Benefits .
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