When financial success eludes you, it can sometimes feel like you’re just not meant for prosperity. However, that couldn’t be farther from the truth. Plenty of people struggle with finances, and many of them manage to get out of it with strategic planning and a bit of discipline.
Here are our top three tips to get out of a financial pickle and help you stay in the clear.
1. Pay off Debt Strategically
Debt is not the Indiana Jones boulder. You can’t just run away from it heroically, duck at just the right time, and watch it roll past you as you triumphantly place your fedora back on your head. Debt is a boulder that doesn’t roll. It just stays there, standing in the way in of your progress, making you feel uneasy.
Paying off your debt is about chipping away at it, little by little, methodically, and with a specific strategy in mind. Don’t do it haphazardly—choose a path, and stick with it. Here are a few strategies to try out:
- Debt snowball – The debt snowball works a bit like its namesake: starting small and then slowly getting bigger. Start by tackling your smallest balances first while maintaining minimum monthly payments on your larger balances.
- Debt avalanche – This repayment plan accelerates your debt-destruction by tackling minimum payments for each debt you have and then allotting the rest of your debt-repayment budget towards the balance with the highest interest rate.
- Debt consolidationloan – This strategy involves taking out a single loan to pay off the rest of the loans you’re working on. The key draw here is that you go from having several monthly payments (and interest rates) to just one, ideally at a lower APR.
- Balance transfer card – This is another form of debt consolidation wherein you transfer your existing credit card balances onto a single credit card with more favorable terms, therefore reducing your monthly payments to one, also at a lower APR.
2. Invest in Financial Advising Services
While paying for a financial advisor while you’re already struggling with your finances may seem counterintuitive, it may actually be one of the best investments you can make at a time like this.
If you have a financial advisor you’re not happy with, make sure you’re involved with the best—through the help of advisor transition services, you can move your accounts and your repayment plans into the hands of someone you really trust.
3. Check on Your Finances Every. Single. Day.
When you’re in a real financial pickle, you have to make your money your priority. That means watching it like a hawk: all your balances, transactions, and bills. Come up with a fiscal responsibility routine to keep yourself in check, so nothing slips through the cracks:
- Check your credit card statement every day and update your monthly expenses spreadsheet accordingly to make sure you’re staying on budget.
- Review your expenses every week and note any spending areas you need to watch out for moving forward.
- Review your debt repayment progress every month after paying your bills and write down your budget for the following month.
Stop Identifying with the Struggle. Instead, Identify with Success.
The worst thing you can do for yourself when trying to get out of a financial bind is craft a negative narrative around yourself. You’d be shocked just how much your downer attitude can become a self-fulfilling prophecy.
Instead of telling yourself that you’ll never be wealthy, you’ll never pay off your student loans, or you’ll never be able to budget, switch that mindset to: I have what it takes to succeed, I will pay off my debt, no matter how long it takes, and I am a wise spender and a strong budgeter.
The rest will soon follow. Good luck and happy budgeting!
Article Submitted By Community Writer