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Wednesday, November 18, 2020

No Money, No Worries! 7 Steps to Overcoming Any Financial Problem

 


Are you dealing with financial problems and live paycheck to paycheck? If so, you're not alone. In fact, nearly 49% of Americans either live like that or expect to sometime in the future.


Luckily, there's a way out and a better future for yourself and your family. Whether you're struggling with debt and overdue mortgage payments or want to save some money for rainy days, the first step is assessing your finances.


Here are 7 effective tips to help you resolve any financial problem you might be facing and manage your finances better.


1. Analyze Your Current Money Situation


Before you start making changes to your finances, take some time to assess and analyze your current money situation. When struggling financially, it might be hard to see all the possibilities for improvement, but an honest approach can do wonders.


On a piece of paper, write down your income, your expenses, debts, mortgages, and credit card payments. Then, analyze where the money is coming from and where it's going, and if there are any hidden or unnecessary expenses you can get rid of or eliminate.


2. Define Your Main Money Problem


Once you've done an inventory of your finances, it's time to define your main money problem. For some, this might be not earning enough to cover their expenses. For others, it might be debt or mortgages or simply not knowing how to manage their finances properly.


For some people, the only way out might be declaring bankruptcy, so in this case, it's best to consult a lawyer for bankruptcy to help with the process.


Once you pinpoint your main money issue, the next step is to list all the possible solutions. For instance, if your expenses are bigger than your earnings, it might be time to find a side gig to earn some extra cash. Or, you could try to reduce some expenses or get better conditions on your debt or mortgage payments.


If possible, you could also try to ask some friends or family for a small loan with no interest rate. This way, you can cover some overdue expenses and slowly pay back the loan over time without any risk.


3. Reduce or Eliminate Your Expenses


When you're struggling with financial issues, one of the first things to do is to reduce or eliminate your expenses. This is easier said than done because most expenses seem essential. However, you can prioritize and decide what you can live without until you get your finances in order.


For example, if you buy your coffee or lunch outside, this might be an expense that you can do without. Things like cable TV, memberships, subscriptions, or pricy phone plans can take a toll on your budget.


Of course, you don't have to get rid of all the fun in your life in order to save money. There are still so many ways to spend time with your loved ones for free. For instance, instead of eating out, you could make your own food at home and head to the park for a family picnic.


Instead of going to the movies, make it a movie night at home with some popcorn and snacks. You can also have date nights at home or your own backyard that don't have to cost a fortune. You can even have a birthday party on a budget at home with homemade decorations, homemade cake, and homemade presents.


4. Reconsider Your Living Arrangement


Whether you live in a house or an apartment, your living situation might be affecting your financial situation. Consider sizing down to a smaller home to reduce your mortgage payments, taxes, and utility bills.


If you live in an apartment, sharing the rent with a roommate can help cover some expenses. If you have spare rooms in the house or an empty finished basement, rent them out to families, businesses, or travelers.


5. Find Ways to Make Extra Money


When you're in a long-term financial pinch, it might be a good time to consider making some extra money on the side. This could be a part-time job or a side gig that you can do in the evenings or on weekends.


Extra earnings can help you cover some expenses or debt payments so you don't have to worry about living paycheck to paycheck. Ask yourself what you're good at and see if you can find a way to sell your skills.


Your side gig can be related to your day job or your hobbies outside of work. For example, if you're a teacher, you can offer online tutoring, create fun school activities for sale, sell lesson plans, or e-books on educational topics.


6. Sell Things You Don't Need


Everyone has stuff around the house they don't need, be it clothing items, furniture, knick-knacks, toys, or books. They say one man's trash is another man's treasure, so do a yard sale or sell your stuff online.


There are so many websites you can sell on, including eBay, Craigslist, Facebook Marketplace, and Poshmark. You can also sell used electronics if they still work, your wedding dress, homemade crafts, and used bikes.


7. Reshuffle Your Income Spending


If you have a certain way of spending your salary as soon as you get it, it might be time for some reshuffling. For instance, if you don't set aside money for your expenses and leave them for later, you might not have enough to pay everything on time. The interest rates will build up and so will the expenses.


Instead, try to pay the most important things right when you get your salary. This includes debt payments, mortgages/rent, credit card payments, and utility bills.


Then, set aside a lump sum for groceries and everyday expenses for the month, and if you can, put a little money on the side. A good spending plan can help you reduce stress and give you peace of mind when your expenses are paid off in full.


You Can Solve Any Financial Problem With These Useful Tips


Whether you have a new financial problem or have been struggling with money for a while, these tips will help you find the best solution for your situation. There's an end to your financial worries and it all starts with being honest with yourself and your money mindset.


Want more personal finance and money-making tips? Check out the other articles on our website on these topics and start taking control over your finances today!

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