When it comes to money, it’s easy to feel like you’ll never get ahead. Whether you’re living paycheck to paycheck, buried in debt, or finding it hard to save, financial troubles lead to stress and uncertainty.
But you can’t simply hang your hat on the fact that you’re expecting a raise or hoping to get a higher paying job. The best way to work out of a troubling financial situation is to take measures to fix the finances you have right now.
From college students with student loans to professionals saving for retirement, try these five steps if you feel stuck in your financial situation.
1. Create a Plan
The best way to fix your financial situation is to create a plan, including creating a budget.
Start by writing down your long-term goals of how much you need to earn, what you would like to save, and how much you can spend per week or month. Prioritize your current financial responsibilities or long-term financial goals. Then, analyze your current income levels to see if you can meet those goals by what you’re currently earning.
If your paychecks can’t meet your goals, it may be time to look for a new job or take on a part-time job to earn more income.
If bad credit is holding you back, part of your plan should be to improve your credit score. You must have decent credit if you want to lease a car, get a credit line, or get approved for a mortgage.
2. Confront Your Debt Head-On
Unless you win the lottery (and chances are, you won’t), your debt will not disappear. You have to be realistic about your finances and confront your debt head-on.
Are you expecting to get a new job or get a raise or a promotion to up the money in your pocket each week? That’s fantastic — but waiting for that to happen may just put you deeper in the hole.
The only way to start eliminating debt is to attack it NOW.
With loans and credit cards, try to pay more than the required monthly minimum to reduce your interest payments. Any small, extra payment can make a big dent in how much you’ll pay back over the life of the loan.
3. Talk To Your Lenders
If it’s debt that’s holding you back and causing you stress, talk to your lenders. You may have bills, credit cards, and personal loans to consider. If so, your lenders may be willing to reduce your monthly payments or work out a payment plan.
In some cases, you may even be able to negotiate a better interest rate.
It can also be helpful to consolidate loans and credit cards. You’ll usually pay more interest in the long run, but debt consolidation can reduce your monthly payments. Long term, debt consolidation is not the best solution. But in the short term, if you’re struggling with cash flow, it is a way to keep some extra money in your pocket.
As tempting as it may be, running from your lenders is never the answer. Instead, reach out to them. Let them know you’re having financial troubles. You may be pleased at how willing they are to work with you!
4. Cut Back On Spending
The obvious way to improve your financial situation is to cut back on spending. For most people, this is easier said than done. But it’s crucial if you want to have more money in your pocket and more control over your finances.
To cut back on spending, do a thorough analysis of where and how you spend.
Resist impulse buying and stop using retail as therapy. It may feel good to make a new purchase, but you should only do so when you have extra cash on hand. Unless it’s something you need, please don’t buy it.
Stop trying to keep up with the Joneses or the Kardashians or your friends on social media. Don’t go into debt to finance a specific type of car or buy a particular pair of shoes. If your friends want to plan an island vacation, save your money to pay with cash or turn down the invitation.
You have to resist the urge to use credit cards. If you’re having trouble paying your bills or saving, only use credit cards for emergencies, not day-to-day living.
Be sure to review all of your monthly subscriptions and service plans. Do you really need Netflix and Hulu and Prime? Is your Birch Box or FabFitFun membership worth it? Is your wine or coffee club membership an essential part of your life?
Cutting back on small things here and there can make a big difference in your cash flow and ability to save. Be realistic in what you need and don’t need. The more money you can save today, the better off you’ll be tomorrow.
5. Find a Side Hustle
We already know what you’re thinking: I already have a stressful job … how can you expect me to work a second one?
If you can’t pay your bills and save some money for your future, you’re not earning enough money. So unless you can talk your boss into giving you a big fat raise, getting a second job may be your only option.
But here’s the good news: there are countless side hustles and part-time jobs you can do on your own time and your schedule.
If you’re a good writer or graphic designer, look for side work writing blogs or creating logos. If you own a car, try driving for a rideshare service or a delivery service as a way to supplement your car payments. You can only work a few hours on the weekend, clean houses, assemble furniture, or walk dogs.
You can do lots of jobs as a side hustle to bring in extra money to help you pay your bills.
If you’re stressed out and feeling financially stuck, it’s time to start looking for a better paying job. You can also invest in your education so you can get that big promotion.
But in the interim, here’s what you can do:
- Create a budget and a plan
- Tackle your debt head-on and keep up with loan and credit card payments
- Talk to your loan lenders to set up payment plans
- Cut back on spending and only buy what you need
- Take on a part-time job to help supplement your expenses
With these five tips, you can put yourself on a path to financial freedom and security. And the sooner you start, the better!
Dominique Daniels has 5 years of Property Management experience working primarily in high-end apartment community living. Her ability to consistently deliver white-glove service to her residents and prospects has propelled her in a successful career that now finds her leading the team at 15th Street Flats.