Are You Dealing With Your Finances in Panic Mode?
If you are always worried about your finances, chances are you are not making the best financial decisions. Recently I had a discussion with someone about how the people at his job were making all of the decision based on fear. They were not looking ahead and making long-term plans. They are constantly in a flight or fight response mode of operating, just going from one disaster to the next. As I thought about this conversation, I thought about people who handled their finances in a similar manner.
They are operating from a place of fear, which affects how they make smaller daily decisions and preventing them from making wise long-term decisions and goals.
Do You Operate from a Place of Fear?
The first thing you need to do is determine whether or not you are operating from a place of fear. Once you recognize this you will be able to begin making real changes about your finances. Here are a few signs:
- I am worried about buying the groceries, paying my bills or handling emergencies all of the time.
- I am always looking forward to my next paycheck so I can cover the necessities.
- An emergency like a car repair puts me into a tailspin.
- I use my credit cards to cover things like my groceries even though I know I will not be able to pay off the entire balance this month.
- I do not have any money in savings.
- If I lost my job, I do not think I could pay my bills in the next month.
- My money is gone as soon as I get it.
- I never have money for extras.
Steps to Help You Stop Handling Your Finances with Fear
Often when you operating from fear with your finances, it is because you are living on the very edge of your income. You do not have anything in savings, and it feels like you do not have any way of taking control. You may feel like you are not spending on anything but the barest of necessities and you are still not making it.
You will need to take two different approaches to your situation at the beginning. In order to move out from your place of fear, you will need to build an emergency fund, which can help stop the panic over most situations. You will also need to determine if you are operating this way because of spending, debt or income issues and then make a plan to change it. This means setting long-term goals.
Focus on Your Budget
First, address your budget. Start by setting up a bare bones budget that covers just your basics so that you have extra money to put toward your emergency fund each month. This budget will be tight. It needs to be, but hopefully you will not need to be on it very long. It can help you manage your income so you are not counting the days until you can go to the grocery story. Be sure to have money that you can set aside for your emergency fund in your budget. This is where you can identify the cause of your problem, whether it is spending, debt or not making enough money. It may be a combination of all three.
Bring Up Your Income
Next, you need to address your income for the long-term. It may seem like you do not have time to do this if you are barely managing to put food on the table, but it is the way you can truly change your situation.
If you look at your situation and you realize that the reason you are struggling is that you are paying a lot of money to credit cards each month, it may be that you just need a temporary income solution like a second job. You may need to go back to school in order to get a better job. If you want to make more money, you need the skills that will make that possible.
Set Up a Financial Plan
Another thing that can help is to have long-term plan in place. This means setting up a financial plan for yourself that maps out when to buy a home, when you want to retire and how you will handle starting a family. The timeline for this financial plan can be adjusted, but if you have your goals mapped out, it is a lot easier to reach them then it is not to have them at all. If you know you are working a plan that provides a good financial future, it can help you stop worrying so much.