Being in terrible financial health goes beyond messing with the way you handle money. It can leave you with unwanted stress, sleepless nights, and worse, lost friends. Although it takes a while to correct a lifetime of terrible financial habits, you can pull yourself together and start improving how you handle your money. We created a step-by-step guide on how you can start your journey towards better financial habits.
Admit that you need help
Like with most things you must turn around, the first step in fixing your terrible money habits is to accept the fact that you need help.
Saying “I need financial help today” to yourself will allow you to internalize the gravity of your situation. In addition, admitting you need help shows courage you’ll need to correct your errant financial ways.
Make yourself accountable
Now that you have promised yourself you’ll become better in managing your money, it’s time to lower your chances of falling into the spiral of terrible financial mess again.
If you want to make yourself accountable, you have to enlist the help of a friend who can make sure you’ll do right. Keep in mind that they’re not just there to give you a critical eye but also give you positive encouragement that you can be better.
Reassess your financial status
You know you need to straighten your financial life and you must do it now. However, you cannot solve your problems if you don’t know where to begin. To know how you fare in terms of finances, start by taking notes of the following:
- Income
- Debt
- Necessary expenses
- Unnecessary expenses
- Luxuries
From there, you can finally do some number crunching that will change your life for the better.
Identify your financial problem areas
People who have trouble handling their finances have different areas of improvement. While some have problems avoiding credit card overspending, others have an incontrollable urge to spend their money on frivolities like gambling, luxury items, and other unnecessary expenses. Once you can see the holes in your budget, you can start plugging them.
Create a timetable
Any habit, whether good or bad, requires constant practice. To create a positive money habit, you have to establish some patterns with the help of a timetable. For instance, you can pay off some of your debt every month or you can finally put some of your money in savings. When you have a schedule to follow, it’s much harder to fall into relapse and go back to your terrible money habits.
Set a limited budget
Before you start growing your money, you have to learn how to live within your means. This means a budget that will only cover the most basic expenses as well as a certain percentage for some unnecessary expenses. This way, you won’t have to suffer from saturation due to too much saving. As a rule of thumb, put the biggest percentage of your budget to expenses and allocate the rest to your financial recovery and wants.
When all else fails, seek help
When you keep on falling down the same financial mishap spiral, you have to acknowledge that things are beyond your control and it’s time to call in the cavalry. You can consult a financial advisor on how you can stop your habit of messy financial decisions. You can also follow a tried and proven guide like this 11-point guide to managing your finances. Keep in mind that seeking the help of other people is not a sign of weakness.
Sources:
https://www.youtube.com/watch?v=_NWf0lRXems