The problem with financial difficulties is that they’re rarely contributed to by just one process. Of course, that’s not always the case. But if you’re already used to overspending or even gambling a little too much, you may have done so within your personal spending tolerance, knowing you may be evicted if the rent is too late, too consistently. But then, boom, all of a sudden your car breaks down and you have zero buffer. Of course, to suggest that those with these habits somehow manage to make it month to month without issues except for unfortunate events is also an incomplete picture.
In reality, if we don’t have enough money to never worry about the bill (which is vanishingly few people, no matter what people tell you), then financial literacy and good habitual management is not only worthwhile, it’s essential. Unfortunately, few of us are taught about good financial handling in schools.
In this post, then, we’ll discuss how to prevent a habitual hole you can put yourself in by implementing some worthwhile new perspectives and habits:
Don’t Fear, Ignore & Hide Debt
It’s easy to be somewhat ashamed about debt if it’s unplanned or if you’ve gotten there through bad habits. The truth is, lenders are usually much more open to working with people who engage early, because it benefits them. Payment plans, interest pauses, or even partial settlements might be available, but only if the conversation is started. You can sometimes use charities to help you. The advice of experts such as Alex Kleyner can also go a long way towards reassurance.
Also be mindful of where your debt is coming from, because it’s not always about massive debt either, as even small, missed payments can stack up in a way that chips away at your peace of mind.
Your Budget May Be Flexible, But Always Have One
Don’t make your budget into an overly complex beast, as it just needs to reflect what’s coming in and going out in a way that helps you understand your actual limits. That could be a spreadsheet, a notebook, or a budgeting app depending on your tastes, but make sure it keeps you accountable.
Sure, you may have a non-standard income or different costs (as we know when running a family), but having a baseline structure in place lets you shift with purpose instead of reacting on impulse, and it’s that latter issue which causes problems for the most part.
Set Main, Secondary & Tertiary Spending Goals
It’s good to know what your money is for, and so setting a main focus like rent and groceries, a secondary aim such as reducing credit card balances, and a third, smaller intention like putting aside something for a weekend treat is good. It keeps you focused and also disciplined, and before the money comes in you know what you’re doing with it. It’s like walking into a gym knowing the exact workout you’re going to do instead of just milling around on different equipment – you feel better, more confident, waste less time, and can relax into your routine.
With this advice, you’re sure to prevent the hole of poor financial habits from being present in your life!