In Over Your Head? Here’s How To Handle Your Failing Finances

When you’re struggling with money, it can really feel as if you’re in a bad place. More often than not, you’ll know that you’re not doing all that well. You don’t really get into debt without realizing it. You’ll know that you’ve taken out loans or you’ll be aware that you have a building credit card balance. Yet somehow, you manage to put this all to the back of your mind. And that’s natural. It’s not the best move for your financial future, but it is something that many of us do. Because forgetting about it for a little while means that you can just get on with your life as normally as possible. It’s the whole out of sight out of mind thing that works.

And sometimes, you’re not dealing with debt, but your financial situation still isn’t looking great. But it doesn’t matter that it’s not the same, because poor circumstances can get you down – whether you’re keeping them front of mind or not. Now, the key here, is to actively accept your situation and look to do something with it. Because if you’re serious about being able to turn your life around, then you really do need to be able to take control and make some big changes to your life. Yet the idea of doing this can be pretty scary. So to help you find some air and deal with your failing finances, here are a few pointers.

Face Up To The Failure

The first step is to face the situation head on. No more hiding, being in denial, or worrying. Instead, you’re going to look your failure in the face and learn from it. Then turn it around. So get to know your situation inside out. Have complete transparency. Know where you’re struggling, where you’re struggling, and even work out how much you owe in total (and to whom), if you do have debts.

Know How You Got Here

A huge part of that is going to be understanding how you got here in the first place. Sometimes, it can take a lot of insight, thought, and objectivity to work it out. But if you’re going to assess your financial health and get back on track, you need to know why you ending up in the situation in the first place. So think about your early money memories, your patterns, and your habits. Any issues around money that you can iron out now will be a huge help.

Open Up

The next step is to be honest about it. Firstly, with yourself. Own the situation. Know that it’s okay, and be proud that you’re working to change things. Also, talk to your partner about money or open up to someone so that you’re not carrying the burden alone. If you are dealing with debt, it might also be wise to speak to your lenders to see if they can help you with this.

Know What You Want

Now that you’re aware of where you are, and you’re ready to change, you need to know what you’re aiming for. So, what sort of financial situation do you aspire to? And be realistic here. Think about how you want things to be. This can then help you work on getting there.

Set Goals

The first step to making this happen, is to set goals. And be clear about them. Do you want to get out of debt? If so, by when? Do you want to live within your means? Or maybe you want to improve your earnings? No matter what the ideal looks like to you, you need goals in place so that you’ve got something to aim for and work towards.

Come Up With A Plan

To reach your goals, you need to take action and make a change. But you also need to know what actions you need to take. So this is why you come up with a plan. And sure, you may find that you do not follow that plan to a tee in real life, but you are going to find that having actionable steps you can follow, is the best way to be able to change your life.

Pay Off Debts

If you do have debts owing, then this really is your chance to shine and pay them off. Sure, it can seem really overwhelming when you owe thousands, but as soon as you start to pay things off, you’ll be surprised by the changes you can make. Here, you may be torn between paying off debt and saving money, but you can do both. As long as you’re committed to paying down your debts and you’re consistently doing it, you can also think about building up a nest egg too.

Live Within Your Means

This one’s a big of a no-brainer, but it’s important. Because you need to be able to live within your means and always spend below what you make, if you’re going to turn things around. This needs to be something you’re conscious of.

Build Up Credit

Now, if you know that you do not have a good credit rating and you want to turn that around, you will need to get your lenders to trust you again. Here, you may find that credit cards for bad credit can help. Or, making sure that you’re making your monthly payments on time can be a good thing here too. If you focus on getting back on track, it’s going to help you to move forward.

Start A Budget

Something that will help you to not only live within your means, but also have better control over your financial situation and where your money goes overall, is budgeting. Setting up a budget planner for yourself and allocating money each month is a smart way of being intentional with your money and making it work towards your goals.

Build A Safety Net

Now, you know that you need to have money behind you, and this is why you need to start to focus on building a safety net. You want to make sure that you have some money put aside in case you need it for emergencies. This can stop you from going deeper into debt. So make saving a priority and aim to save a certain percentage of your salary every single month.

Focus On Earning More

And then, when you know that you’ve got a hold of your financial situation and things are running smoothly, the next step is to earn more. Because f you know that you don’t have enough money to life the life you want, or you feel restricted by your earnings, this will help. And sure, you can aim for a promotion or get a new job, but that’s not all. Because there are a ton of ways that you can make money fast, if you so wish. You just need to want to earn more, then put the work in to do it.

To summarize, it really is tough to be in a bad financial situation. But, it’s really not the end of the world. Because you can make changes. Sure, they’re not always the easiest to implement. Sure, this can take time. But the good thing is that you’re aware of your failing financial situation and you’ve chosen to do something about it. So as long as you get started, and you keep on going – no matter how slowly that might be – you will make a change. If you’re determined enough to turn things around, all you need to do is to put your mind to it, and you will start to see yourself in a positive, if not prosperous, financial situation. So enjoy the journey, and make magic happen!