Pithy sayings about a dollar a day and soundbytes of financial wisdom feel completely useless when you’ve been hit with financial hardship. The idea of an emergency fund seems laughable because you feel as if you’re living in an emergency on a daily basis. Let’s not even bring up retirement.
Even so, you’ve got to do something to keep moving ahead. Even when you feel immobilized by debt or expenses, you still have the power to plan and to act on that plan.
So how can you stand up and fight for your financial security when you feel dragged down by your circumstances? Here are some basics to start you out:
Look At Your Numbers
Part of putting together your financial plan is putting your money into perspective. That requires knowing what’s realistic, what’s unrealistic, and what reasonable sacrifices or concessions you might be able to make in order to achieve your goals.
Numbers don’t define you, but they do clarify your financial circumstances. Open your statements and punch in the numbers to see where you stand. However scary or intimidating they might seem, understanding your numbers (the negative and the positive) ensures that you’re an active participant in what’s happening with those numbers.
Set Just One Small Goal To Begin With
One of the most important things to do as you hash out a financial plan is to give equal importance to the small and immediate changes. Those changes might mean saving five dollars at the grocery store, or selling the guitar you never use — small steps that can have big long-term impacts. These actions put momentum behind the larger goals.
As you continue to develop your plan, then you might try to re-prioritize your goals and plan more detailed timelines of how to achieve them. But if you’re going to start somewhere, make it a place where you can realistically achieve and actually see the results.
Seal All Financial Leaks
Go over your expenses regularly to see if you’ve missed an opportunity to save. Unsubscribe from monthly subscriptions, look at every extra expenditure and cut them. Cancel cable, downgrade your phone, and halt membership services. If you feel stuck in the cycle of paycheck to paycheck spending, then choices have to be made with your spending. They don’t have to be permanent switches, but they contribute to your ability to save enough to break the cycle.
Look For Opportunities To Add To Your Income
There are two parts to the basic financial equation: your spending and your earnings. If you’ve budgeted to the max and you can’t see anywhere else to cut spending, then you might want to take a look at the earnings part next. Seek out opportunities for extra income: freelance projects, surveys, helping out with gigs, etc. Not all jobs need to take up your weekends or nights, but boosting your earnings is one way to add a cushion to your bank account.
Debt or financial turmoil can feel abstract. Unfortunately, poor financial health can result in very real consequences on your life. If your financial situation feels too intimidating to face, see where you can give it some structure. Ground your finances in reality by sharing with others and asking questions to make sure you understand the basics.
Having a financial plan requires serious discipline. But it’s also made up of choices. And the choices you make now can really help to stabilize your financial future. Small changes are what will make up your long term action plan.