Financial problems? Don’t you even want to watch? Here is help, advice
Would you rather eat that ATM receipt than risk seeing your balance? You’re not alone. Keeping an eye on money can be stressful and confusing. Even if you know you need to keep track of your finances, it may seem easier to ignore balances, credit card statements, and bills.
But what is easy now can become difficult to digest later. Avoidance can lead to overdrafts, a reduced credit rating, debt, and possibly missed opportunities to save and invest.
Seems familiar? Don’t feel guilty, says Justin Nichols, Certified Financial Planner and COO at Garrett Planning Network. He tells clients in this situation, “Let’s get started right away and make a plan to move forward.
You are already making movements by clicking on this article. Read on to learn how to master neglected finances.
Determine if you need professional help
These tips are very helpful for people whose finances are not yet in dire straits – they are simply ignored. However, avoidance is especially easy (and harmful) when you’re financially overwhelmed, says Sarah Newcomb, behavioral economist for Morningstar and author of “Loaded: Money, Psychology, and How to Get Ahead Without Leaving Your Values Behind.”
If you cannot meet your basic needs or if you feel drowning in debt, speak with a nonprofit credit counseling agency. Credit Counselors Offer Free Help With Budgeting and may be able to create a plan to consolidate your debt and lower the interest rate.
Schedule financial audits
Acknowledge any anxiety you feel about finances, says Amanda Clayman, psychotherapist and financial wellness coach. “Anxiety takes up our attention and energy,” she says, making problem solving difficult.
If you only take care of your finances when you feel bad, you may associate this behavior with negative feelings. Clayman is the example of seeing a shocking credit card statement, panicking, and choosing this time to pay off your overspending.
Rather than waiting around until you’re preoccupied with anxiety, Clayman recommends scheduling a weekly financial recording at a neutral time. The idea is to “reprogram your emotional experience around money so that you can be much more effective,” she says.
Take 30 minutes each week to review your spending and your checking and savings account balances, as well as any outstanding debt. Then take note of any upcoming bills or other monetary events – like payday – and make a flexible plan to prepare for pending expenses.
If you’re feeling overwhelmed with a 30-minute financial review, Clayman suggests starting with 15 or even five minutes. (Maybe you’re just jotting down your balances.)
Control your anxiety by focusing only on your current financial situation. However, over time, the comfort and familiarity with your money today can help you prepare for tomorrow. For example, spending tracking could lead to spending less and having money to spend. Or, after reviewing your paychecks, you may decide to contribute to your 401 (k), a tax-advantaged retirement savings account offered by some employers. (Contribute at least enough to get all the matching dollars offered by your employer.)
Tackle small, achievable goals
Changing behavior “depends on our sense of identity,” says Newcomb, who was unaware of his own finances. For example, she says: If you’re okay with being someone who pays late bills, you probably will continue to do so.
“There came a time when I decided I didn’t want to be that person anymore,” Newcomb says. “Being someone who manages their finances is the goal – it’s not that I care so much that the power company gets their money. “
Take on small, achievable goals, like these check-ins, to start identifying yourself as a financially responsible person as well. To identify your goals, Newcomb asks, “What are some things that make you feel like a punch when you see them?” “
Are you ashamed of the overdrafts? Go the next two months without one – then another two months. Pay your bills late? Make each of next month’s payments on time. (And for each bill, set up automatic payment, which Newcomb describes as a “bargain.”) Bad credit score? Aim for a certain score in a few years and find out what will help you, like making those payments on time and keeping your credit card balance below 30% of your overall limit.
Collect your rewards
Build that positive association with money management by rewarding yourself. Treat yourself to an ice cream or your favorite TV show after your weekly recording, for example.
Some perks will be intangible but nonetheless significant, like pride in taking on those important (if dreaded) goals, Newcomb says.
Later on, you’ll likely see those little goals you’ve accomplished helping your finances, which is also very satisfying. Newcomb, who now controls his money, has seen his balances increase. “Now my reward for looking at my finances is that I can see I’m in a better place,” she says.
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