More Money Is The Answer, Right?
Once You Make More Money, Everything Will Be Okay
The most common money concern that financial advisers hear from their clients is that their paychecks are never big enough. They translate that to mean that their client spends more money than they make. The basic solution from a financial adviser’s perspective is that their client needs to change their spending habits and live within their means. But the objection that they continue to hear is, how? How can someone possibly live just on their paycheck? Well the hard conclusion a financial adviser will tell you is to spend less money. But that’s not the answer clients want to hear. Instead, clients want the financial adviser to say that they just need to make more money. Because the client knows that if they just made more money, everything would be okay, right? Well, not really.
It’s Rather Basic
Even though financial advisers have been advising their clients for years about financial basics, people still ignore the basics. Money management can be so easy and rather basic, but people complicate it. To change your financial direction, all you basically need to do is focus on your spending habits.
Start by asking yourself a few questions. Are you spending for all the wrong reasons? Does a bad day at the office entitle you to blow some money on a few new purchases? Do you feel obligated to keep up with your family and friends? Do you even watch or monitor your own spending? Do you need or just want most of what you are buying? Do you ever see yourself debt free? Do you want to be debt free? Hard questions, yes; but questions you need to ask yourself if you expect any changes.
1st – Give Yourself A Break
Sometimes we need to hit rock bottom before we see the light and are willing to make changes. Have you hit rock bottom yet? Are you living from paycheck to paycheck and barely making it to the next paycheck? Are you knee-deep in debt? Are you desperate to get out of debt but do not know how? Maybe it’s time to give yourself a break and try a new approach. You do not need more money to reverse a financial setback you just need to change your financial habits. Easy to do? No! Worth it in the long-run? Absolutely!
2nd – Take Back The Controls Over Debt
You give up so much financial control when you live from paycheck to paycheck, struggle to make ends meet even with the use of credit cards or are hounded by creditors. When you are buried in debt, your creditors own you, they run your financial and personal life. And that is no way to live. Take back the control.
Start with your credit card debt. To get your credit card debt under control, pay down the debt with the highest interest rate first, that will save some money. Pay something on that debt every single month, never miss a payment. Even small amounts count.
Next, avoid racking up future credit card debt by only buying what you can buy with cash. Make a promise to yourself that if you cannot pay cash, you cannot afford it, period! Your credit cards are for “emergency” purposes only. Again, make a promise to yourself that your credit cards are untouchable unless a true emergency arises that is to expensive for a cash payment.
If you are contributing to a retirement plan at work, stop your contributions until your debt is under control. Once your debt is manageable, start your contributions again. Think about it, you earn perhaps 5% or 6% on your retirement plan investment but are paying 25% interest on your debt. That’s not good financial move. Just be sure to promise yourself that you will start your contributions back up once you are out of debt.
3rd – You Are What You Spend, Pull Back
The fact is that you are what you spend. If you always overspend, your identity becomes a reality…most likely, you are always in debt. Think about it, if you spend more than you make, you will always be scrambling for money; you will never make enough money. How can you, your spending never ends so how could you possibly make enough money to satisfy that? It’s like a gambler who just needs to win the next one.
If you are living beyond your means, stop; change your focus. Instead of dwelling on your need for more money focus on what you have control over; namely, your expenses. You have more control over what you spend than what you earn, unless you are the boss or own the company. You have the power, you control where your money goes.
To succeed at turning your financial direction around, curb your spending. This can be easily accomplished by living from budget-to-budget instead of paycheck to paycheck. Budget living gets such a bad reputation, but it works. Make your budget flexible, but firm. If an item is not on the budget, promise yourself to think long and hard about it before purchasing it. Denying yourself a few perks once in a while is the flexible part. Separating need purchases from want purchases is the firm part. Do not be afraid of a budget. It is a simple way for you to track your expenses. It is one of the easiest ways to find out where your money is going. How else can you find areas of waste or excessive spending?
Take Advantage Of You
Whether you believe it or not, you have all the power over your financial life. Will you use that to your advantage or waste that power? With financial self-discipline you can accomplish more than you can imagine. With financial discipline you will be able to separate need spending from want spending. You will loosen the grip creditors have over you because you will pay off your debt and understand how to prevent yourself from falling into a debt trap again. By whittling down your debt, eliminating credit card fees, putting a curb on your spending and focusing on where your money goes you will in the end, find more money. That’s what you want anyway, more money, right? You can do it by taking advantage of your own self-discipline.
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