Overwhelmed by your finances? Here’s how you can regain control
It’s hardly a week past payday and you have no more money left to see you through the month? Worried about how you would make enough money to pay your student loan instalment next month? Feeling hopeless that your present job and lifestyle may not take you far on your goal of travelling around the world or retiring early or buying your dream house? Or, put simply, feeling overwhelmed about your finances and your future?
Anxiety about your financial situation can manifest in many different ways. And, studies have shown that it is the top cause of stress for people around the world. Why is it so? When there is so much information and advice available (most of it free), why it is that people still fret about money? Why is it so difficult to follow these rules and stay on track when you are spending, or be strict with yourself when you are saving?
The answer to this question is surprisingly simple: Because, it is not that simple to do so.
There Is No One Size Fits All Solution
When it comes to personal finance, truth is that there is no one solution that fits everyone’s needs. It is truly ‘personal’ and the kind of problems each of us face is unique. So although following a few good financial habits will do us good, it is foolish to expect that what works for your friend will work for you, too.
When you blindly follow such rules and see that your attempts to manage money fails repeatedly, you tend to give up too soon. This leads to the downward spiral of overspending, debt and financial stress.
What Can You Do To Set This Right?
The first step is to relax!
Yes, just take a deep breath and stop doing anything at all related to your finances. Stop stuffing yourself with generic information which might not work for you. And, take a step back.
What Do You Want to Do With Your Money?
Once you have calmed down, take your eyes off what is happening at present with your money. Take off some time to think about your future. The question to ask yourself is what do you want your money to do? Where do you see yourself in the next few years? What do you want to achieve? What do you see yourself owning or enjoying? Or, in short, what are your goals?
You don’t need goals that are set in cement. They can be and need to be dynamic, else they are unrealistic.
Looking to the future and planning your life backwards gives you a better perspective to chart out realistic goals.
What you should be teaching yourself to do is to decide what you want in life and steer yourself towards it. Not to restrict yourself to cut your dreams short to make them fit into what your current income can get you.
We are not asking you to set unrealistic goals. But we are asking you to forget about all your financial stress for a moment and think of what you really want in life. Do you want to be debt-free in the next five years? Do you want to build a house? Do you want to start your dream business? Do you want to go to the best university in your country? What is that you really want?
What You Must Do Now: Take a sheet of paper (or open your note-taking app if you use digital devices) and jot down at least three goals you want to achieve in the future. You could list down more. Don’t worry if you feel like changing them sometime later, just write down what comes to your mind today, now. This is just to have a starting point to work towards.
Understand Where You Are Now With Your Finances
Now, come back to the present. Let’s look at what we are working with.
The advantage you have now is that you know what you want your money to do and you have a goal to work towards. You know exactly what you want to spend on and what you want to save for.
The next step is to analyze what you are doing with your money right now. Only if you know what is going wrong now will you be able to set it right.
Are you not earning enough? Do you have too much debt? Are you spending too much? Are you not saving enough? All these are questions you will have to ask yourself at this stage. To find answers to these questions, you will need to track what you are doing with your money. A minimum of two weeks to one month is a good enough period to get an idea about what’s happening.
This is where an app like Wallet will come in handy.
It may not be easy for someone who isn’t used to keeping track of their spending to start doing so overnight. At BudgetBakers, we realize this. Our aim is not to change your habits and lifestyle overnight.
We want to make this process as simple as possible for you, because the truth is that you are less likely to stick through a system that is complicated or has a lot of rules to follow.
The simpler it is to keep an account of your expenses and income, the more chances are that you will stay on track.
What you Must Do Now: Select a suitable system for you to track your expenses and income. We suggest you give Wallet a try.
With features like the Smart Assistant that will remind you to track your expenses depending on your location, you will always stay on track. And, if you connect your bank account to Wallet, then it will do all the work for you by automatically syncing your spending and earning and even auto-categorizing it for you.
Now, Create A Plan That Works For You
As you start tracking your money, you will get a realistic picture of what needs to be done to get closer to your goal. You may think that you know where you money is going. The truth is that when you really do track your spending, you may be surprised at the mismatch between your actual spending and your priorities.
With Wallet’s specialized, easy-to-read charts and reports, it is easier to get a grasp on your spending habits and whether your income is sufficient to finance these expenses.
What you ought to be doing is increase the gap between your income and expenses, which is your savings. This can be done by either earning more or spending less. Given your money habits, you will be able to identify which of this you need to do. Think of ways in which you can cut down excessive spending or earn more, whichever is the case.
Once you have decided what is to be done to get to your goal, start planning your finances to make this possible. You can start by creating a budget to regulate your spending.
What You Must Do Now: Read more about how you can start budgeting any day of the month using Wallet.
Create your first budget and set up your planned payments. Also, read about small ways in which you can create the habit of saving without really feeling the pinch.
Stick To Your Plan And Keep Going
If you follow these three steps, in no time you will see that your money will start to behave the way you want it to. It is now only a matter of time that it helps you accomplish your goals.
But the key here is consistency. As is with anything else, accomplishing a goal requires discipline, dedication and commitment. But now you know that its is not as hard as it sounds. You just need to stick to your plan and keep going.
Wallet is designed in a way to understand your preferences and learn to adapt to it with time. It also allows for unmatched flexibility, which means that in case you want to make changes to your budgets or plans, you can do so guilt-free. We believe that a plan that doesn’t allow for flexibility is unrealistic.
So allow yourself the freedom to make mistakes and learn from them. You don’t have to abandon your plan if you make a mistake, you just need to tweak it a bit and keep going.
So be true to yourself, live your life and stick to your good financial habits.
BudgetBakers, our aim is to help ordinary people lead richer lives. We want to assist you to build your own dreams and make your money work towards making them a reality.We want to make sure that you are in the driver’s seat of your life. And, this can happen only when you regain full control over your money. Anxiety and stress will then be a thing of the past and you will feel free to make your own decisions, without being tied down or feeling restricted. So go on, set your goals, get insights, plan your future and keep going on your road to a richer life!
Also published on Medium.