Just like dieting, exercising, managing your time and a million other tasks which require some level of discipline, managing your finances requires consistent effort. It’s easy to slip here or splurge there, or run out of time to stay on top of things, and before you know it your solid financial plan comes crashing down around you. If this has happened to you, it’s okay. We all slip from time to time, and all you need to do is pick yourself up, dust yourself off and follow these tips to get yourself back on financial track.
Don’t beat yourself up – It takes mental fortitude and grit to reach any goal, and finances are no different. The quickest way to keep yourself off track is to have a poor mindset. If you beat yourself up for slipping off track, it’s only going to put you further behind. Be kind to yourself. Also, be honest with yourself. Acknowledge your mistake, try to figure out how it happened, learn from it and move on. Beating yourself up will only make you feel more defeated and less likely to get back on track.
Take stock of your debt situation – Sit down and look at your whole financial picture. List and rank your debt, including outstanding balances, interest rates and minimum monthly payments. This can help you form your plan to pay down highest interest rate items first.
Look at your cash flow – Figure out what your monthly income is and what your monthly expenditures are. This will show you how much money you’re working with each month so that you can form your financial plan.
Make a budget – This is money management 101, yet so many people are flying by the seat of their bank balances. Creating a budget is just like going on a diet — a money diet. It’s not going to be easy at first, but it’s a good habit you need to develop. So look at your debt and your cash flow to develop a realistic budget that you can stick to. Cut down on discretionary spending to get to your long-term financial goals. That might mean you cut out a few lattes a week or that strappy pair of adorable sandals, but at the end of the day when your budget is balanced, you’re not going to mind missing that extra burst of caffeine or the shoes that complete that outfit.
Make a repayment plan – A good rule of thumb is to pay off highest interest rates first, so you save money in the long haul. See how much is available in your budget and make a plan to pay off debt so that eventually you’re working with more funds to go elsewhere in your budget, like saving for retirement or kids’ college funds.
Check yourself regularly – Staying on a healthy money “diet” takes practice. Measure and monitor yourself frequently to make sure you’re staying on track. If you’re not, examine where your shortcomings are and what caused you to get derailed and fix it. Lather, rinse, repeat. We are all human and will make mistakes, but learning from them and moving forward is all we can do.
Meet with your financial planner – When in doubt, ask for help. Financial planners are there to help you sort through all of your money issues.
If you need help figuring out budgeting, a debt repayment plan and more, speak with a financial planner who can guide you through each of your important financial decisions.
Linden Oak Wealth Partners offers fee-only financial advising customized for women, in particular, women in transition. Our goal is to create an environment where financial planning is efficient, simplified and easy to understand. We want clients to feel empowered and engaged every step of the way. Please contact us to schedule an initial consultation today.
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