Is money slipping out of your hands? Do you feel like you are working like a dog, day after day, and you have nothing in the end? If so, chances are you've fallen into the habit of letting money control you rather than the other way around. Keeping your financial situation under control is worth more than the money itself; it is also a question of self-respect and a balanced life. To stop getting broke, it's important that you realign your priorities and take better care of yourself. That's how.
Steps
Step 1. Start with you
Staying broke comes from not taking care of yourself as you should. If you don't reevaluate yourself, it's hard to reevaluate money. The choices you make to spend, save, or lend money are related to your ability to live within your means or to go beyond them. Recognizing the elements listed below will help you re-enter a path of financial stability:
- Money and spending money don't matter as much as your personal worth. Money doesn't define who you are, nor does it give you real power. True power is personal and comes from within. Using money to feel powerful is a way of seeking external validation rather than accepting one's own worth.
- Suze Orman says we spend "more" when we feel "less". and it is an excuse not to look deeply into ourselves and bring out what really makes us suffer.
- One of the main ways to disrespect yourself is to buy something you can't afford. The spiral that is generated will involve self-inflicted pain, the inability to find enough money to pay for other things, or even to pay back what one has bought, and end up choosing a life of debt rather than a life of moderation.
- Another mistake people who make a good amount of money make is to stop putting value on convenience. This does not mean going to the poorest shops; it means learning to ask for discounts, repairs, returns, savings. Don't do this, because it seems to you that doing it is "low-key" or makes you appear ungenerous, it is a way to disappoint yourself. We live in a world of sales and profits, and you deserve to take advantage of convenience as another person deserves. And for those who are graduates, having a degree does not mean giving up popular wisdom!
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For women, remember the most important thing: a man is not a financial project. No matter how sweet and cute he is, keep your head on your neck when it comes to money and take care of money in a smart and thoughtful way. While he's generous to the point of recklessness with your shopping sprees, that's no excuse to give up your financial autonomy and wisdom. Always keeping a reference budget in mind is neither bad nor miserable, so be an example.
A good companion "can" help you with finances, more often by cooperating in saving and producing a regular income rather than by inviting to spend. A bad companion certainly can compromise these things
Step 2. Get yourself out of this situation by doing what's right, not what makes you feel better or easier
The intensity of feeling good after a purchase is fleeting, as the object gets old quickly. Suze Orman suggests that you ask yourself three "on-call" questions before buying something: Are you generous to yourself? It is necessary? Is it something authentic to yourself? If you are unable to answer all three questions in the affirmative, then buying is not the right thing.
- This includes not giving up on favorite things either, because you know that another loss of control will soften everything but won't help you in economic reality.
- Never run out of emergency savings or long-term investments for whims or for people in need. You will end up being the only one in trouble. If this sounds hard-hearted to you, remember Suze Orman's questions.
Step 3. Create added value in your life
There are two simple ways to do this: 1. Lower your consumption and 2. Increase your income. For most people, the first option is more immediately viable, although you don't have to sell yourself or not consider the second option in the long run. It starts like this:
- Write down everything you spend. Grab a small diary and write down everything from the newspaper to the 300 Euro boots. This method is very straightforward: just writing what you spend will make you spend less, because it will make you aware of your expenses and ultimately allow you to spend a little less. Be prepared to be shocked if you are used to justifying yourself being broke all the time.
- Start worrying about small expenses. Do not spend unnecessarily on unnecessary purchases that you can prevent by organizing your skills and will: the parking ticket you took so as not to waste time, cigarettes, the 10 Euro fine for a late payment, only for disorganization, the season ticket to the gym you don't frequent, the taxi because you are late and perpetually disorganized.
- Prepare your budget. Don't consider an unrealistic budget. Set aside income to really reduce debt, not just to pay interest. Work on your monthly expenses and set aside money for annual or predictable ones (car repairs, holidays. Divide what's left by 31 to figure out how much you can spend each day.
- Plan your food shopping wisely. Many people who earn large sums have no idea how much they spend on food. You will think you despise convenient foods, but one look at your card will tell you another story. The trick is to buy food in bulk, large quantities, and late in the day. Keep the fridge full of ingredients you know you can cook when you come home late and don't have time to make a big meal. Keep a list of inexpensive recipes that everyone loves.
Step 4. Use your frustrations to change your attitude towards consumer goods
A good way to reduce your sense of deprivation is to stop reading mass fashion, home and tech magazines, which make you feel bad for not having the latest in trend item, and the ultimate home necessity (you can do without it), with those advertisements that "bravely" only make you feel worse. Will the new state-of-the-art camera, the new mobile phone, the new step make you feel better if you know that by buying them you will sink even more into the vortex of debt? No one will notice if you use an expensive shampoo or not, as long as your hair is clean. On the other hand, you don't have to show your thrift too much. Balance what you want and what you need to have.
- Rather than wanting things you don't have, look at what you already have. If you don't like it, give it to charities or sell it on Ebay.
- Recognize obsessions with brands. Being loyal to a brand that provides you with items that last makes sense. Being loyal to a brand and buying whatever that brand produces makes no sense. Only a small percentage of people will notice the brands on your clothes. Do you really want to impress these people? Being sensitive to labels will tear a hole in your pocket. Focus on value for money and prefer quality over quantity. Remember that many brands don't have the quality they advertise: a company just needs a little advertising to invite the whole world to buy its product, but don't be persuaded to buy something where the advertisement itself is the product.
Step 5. Forget about playing with your credit card
It is not a smart thing to give yourself a false sense of financial security if you are sinking into debt. It does the opposite. Eliminate the cards, one at a time, and with them the expenses to manage them. The aim is to have only one bank account and one emergency account. If you can reduce your credit card to a 500 Euro emergency account and count on cash transactions for the rest (including debit cards), you will be happy.
- Avoid running into added payments for bank account debts. Choose a bank for which debt arrears are not that high.
- Credit cards can offer debit card benefits. But if you are pushed to spend more, as with many people, it is best to avoid them.
Step 6. Stay away from temptations and dangerous areas, such as motorway restaurants, 24-hour shops, special discounts, and restaurant areas of cinemas
Do not order from catalogs by post, on the contrary, put the catalog directly in the separate collection, without opening it. If you have to walk past designer stores, keep going and don't come back for a second look.
Don't fall in love with savings ploys that will give you more problems than you can avoid. For example, home sewing machines and business newsletters. And beware of discounted items: save even more if you don't buy anything
Step 7. Get ready
Always carry snacks and bottles of water for the children. Always carry pocket change for parking, and spare change in your bag. Never buy anything if you have left the same item at home.
Step 8. Try to have a few days of spending per month
After a while it will be like a game: how can I live today without having to write anything in the diary? How can I strive to use only the food and resources already available? See how easily you can convert this into a real habit.
Step 9. Be generous when you can
You cannot be "Mr. generosity", but you can give others time, support, friendship, a bed for your child's friends, a ride for an elderly neighbor, something from your garden. Thrift can easily turn into mean, but remember to be generous - if your finances worry you, put a 10% cap on these things.
Advice
- When you think you are already spending money on your account, as opposed to spending virtual money, whose elasticity only encourages you to pay interest, think about how the money you already have makes you feel differently than what you are indebted to. The prospect of ending up in an identical pair of two-pair shoes you already own seems oddly boring.
- Take a day every now and then. Start small, review goals, heal yourself (not with shopping), play a little.
- Use cash. You will feel the physical loss when you spend them versus your credit card.
- Open an account for Christmas but put in more than you plan to spend on gifts. The excess part is perfect for a mini-vacation or special purchase. Plan and wait to find an opportunity. You will have a great thing without having to spend any more money.
- To always have money in the bank to pay the bills, add it for the past year and divide by 52. Collect 25, 50 or 100 Euros. Remember to add them to annual or bi-monthly bills. Don't underestimate them and use general utility trends. Put this money in the bank every week, for whatever reason. You will already have them when you need them and they will bring you interest if they are in a good bank account.
- Start acting like you are really rich, not like you are playing a part. Always negotiate prices and become a persistent customer.
- Take a jar and put all the pennies in it until it is full. Then take everything to the bank. Don't put your money in a coin counter, you will lose the effect of the savings.
- Even in a dire situation, these tips will help you survive and overcome difficulties. Unemployment does not last forever and many medicines are reimbursable.
- Buy things that last over time. For example, a pair of shoes can cost more than the average, but if you calculate the time of their duration, you will spend less than buying shoes that may be cheaper but that you can use less.
- Optimize your closet and buy clothes that go well with what you already have. It will multiply your options, it will not just add clothes. Buy clothes that can be used on multiple occasions rather than for a single night.
Warnings
- Don't overdo it and don't be unrealistic with the budget. If you don't respect it you will only feel worse (like on a diet).
- Don't think these things change if you lose your job. They can delay the inevitable. You will need to find a source of income as soon as possible. Look at all the possibilities, even a private initiative. Consider your happiness in the occupation more important than the money you earn. You will spend 3/4 of your adult life working, so for a happy life you need to practice an activity that makes you feel good. A disaster can become an opportunity if it changes your path and puts you on the path to happiness.
