While I am far from a financial guru, I have learned some powerful lessons over the years that have drastically altered my financial habits. I never saved money; I used my credit cards with abandon. Several years ago, caring for a sick parent combined with a commission only sales job– that I was not very good at– put me in quite a financial pickle. It was the culmination of years of being bad with money, and it led me into bankruptcy. I am now proud to say that person and those money woes are a mere memory, and here are three ways I turned things around for myself.
REALLY Start Thinking about the Long-Term
Our inability to really think about the long-term and the consequences of our present actions causes us a whole lot of trouble in life. It is why people can’t bring themselves to quit smoking, change their diet or make more responsible decisions with their money. Things are tight sometimes and saving money seems impossible at the present moment. While this is sometimes truly the case, for most of us, poor financial planning is at the heart of our problems. We do not budget properly. We spend irresponsibly. My financial debacle was a huge wake-up call to me that I could no longer just continue ‘’living in the now,’’ when it came to my finances. As a freelance writer, there is no pension waiting for me. I fully realized I was responsible for my financial future, and I decided to rise to the occasion. I started investment accounts, and even if I can’t contribute huge sums of money to them, I know I am still creating a nest egg for the future.
Vowing to Avoid Emotional Turmoil about Finances
When I was in the thick of my financial crisis, I felt horrible. My debt, lack of income and inability to pay my bills was the first thing on my mind when I rose in the morning and the last thing on my mind when my head hit that pillow. I felt a horrible knot constantly. I cried. I panicked. Worrying about money is a horrible feeling and can take a serious toll on our mental health. Once I climbed out of that hole, I never forgot those feelings and I vowed to make better decisions moving forward so I could avoid ever feeling like that again. So far, I have succeeded. Keeping my peace of mind when it comes to money led me down a road where I would budget, commit to putting a certain amount of my money into savings and building a cushion should I find myself without income for a period of time. The next time you find yourself worrying about money, really tune into those feelings and how horrible they are; start reflecting and questioning what you could do to feel better. No matter how small a step it is, take it. You just need to get yourself on that road and once you do, the decisions will get easier. If you find yourself worrying about money, don’t just be a passive victim to your thoughts. Take control and do what you can to make yourself feel better—again, no matter how small a step it may seem.
Make a Realistic Budget
Budget is a dirty word for many of us. We look at it as a hindrance. It makes us think of restriction, austerity and giving up all the fun stuff in life in the name of being a financially responsible person. The thought of sitting down and going over our finances may make us a bit queasy. We may not want to fully acknowledge our poor habits, or our true financial situation. But, you have to suck it up and face the music. I devised a realistic budget and do my best to stick with it. Notice I said realistic. Many people get a bit overzealous with their budgeting and make a plan that is hard to stick to. Rather than readjust, they just give up the idea of tracking their money altogether. To make a budget, you do not necessarily need to track every cent, though some people get quite detailed. But, you do need to clarify your regular expenses, commit to saving a certain amount of money each month and figure out how you want to pay down your debt. The mere act of deciding I wanted to become better with money was a major turning point, and getting started is really that simple. Much of our current situation results from bad habits and lack of education. We just never took the time to learn about money. No matter where you are today, you can get to a better place financially. Take it from a former financial nightmare. Kelli Cooper is a freelance writer who enjoys blogging about all things personal finance, from how to improve your credit score to how to increase your savings account