How to Recover from Financial Misery

Finding yourself in a stressful financial situation is becoming all-too-common

How to Recover from Financial Misery

Unfortunately, finding yourself in a stressful financial situation is becoming all-too-common. It’s very easy in today’s materialistic society to be drawn to the newest gadget, the latest designer clothes, and dining out regularly, with little to no regard of how we will actually afford each purchase. Impulsive shopping is one of the many reasons why Canadian’s can find themselves struggling with their money, along with living beyond their means. A US study found that the average American spends over $5,400 (US) a year on unplanned purchases. So, what’s the solution, and how do you recover from financial misery? It may be a long road ahead, but luckily, there are a series of steps you can follow to get your money back on an even keel.

Create a Realistic Budget

When you are struggling with financial difficulties, it can be very tempting to bury your head in the sand and ignore the problem hoping it will go away. This way of thinking is a mistake. Not only will you continue avoiding the situation, potentially making it worse, but you will also be dealing with anxiety and stress (either consciously or subconsciously), which can take a toll on your health.

On the other hand, there are people who cope with the stress by over-analyzing their situation and create a budget which severely reduces their spending power. While creating a budget is a wise move, limiting your disposable money will lead to resentment and unhappiness. It stands to reason then that a budget is a great idea, but only if it’s realistic, and you can stick to it. After all, you will only feel guilty and disappointed when you spend more than you planned for one month.

The key steps to creating a realistic budget include setting goals; for example, do you want to buy your own home in the future, or do you want to get yourself out of debt? Further steps are assessing your monthly income and expenses, such as your monthly salary, your rent, and your utility bills, and then separating the things you want from the things you need. The things you want could include a state-of-the-art 4K television, whereas a thing you need could be a newer car if your current model keeps breaking down. By separating these two, you will be able to manage your money much better, and not deprive yourself of the things which will make you happy, as impulse buying is linked to stress levels.

Consolidate Your Debts

Managing mounting credit card debt can feel like an impossible task, especially when you can’t see a way out of the situation. However, there are ways and means around this issue, and one such way is to consolidate your debts into one easy payment. The method behind this is relatively easy, and one which can alleviate the pressure. While taking out a new loan, on top of the already large debt, can feel like a step backward, by simplifying your debt into one manageable monthly payment, you can save money and repay it quicker. One way to do this is to take out a personal loan from a reputable lender, such as CashNetUSA, where you can apply easily online, and you won’t face penalties for repaying early.

Define Your Saving Goals

One reason why people find themselves in a difficult financial situation is that they don’t have any savings to fall back on when times get tough. Even if you are left with money at the end of the month, it’s too tempting to spend it on another takeaway or another night in the bar, rather than place it securely into a savings account. A lack of discipline with money is a contributing factor, as is the fact that saving money isn’t always a priority. A study recently found that 85% of Canadians admitted they needed to save more money, but an astounding 64% didn’t have a savings plan. So, how can this issue be tackled head-on? By defining the goals which you want to work towards, (as mentioned above, saving for your first home or a new car), you have a tangible outcome in sight. When you are focused, and you know that $50 you could spend on a night out could go towards your very first property, it’s easier to motivate yourself.

Move Up the Career Ladder

This point may or may not have crossed your mind, but there’s no denying that switching careers, or pushing forward to a more senior position, can affect your bank balance. It is easier said than done, and sometimes the opportunity simply doesn’t arise to make a difference. However, if you find your current paycheck doesn’t quite cover your monthly expenses and doesn’t leave you anything to place into your savings account, it’s time to make a move. Whether you apply for a new position elsewhere or you speak to your current employers about a raise, it’s taking the first step towards something bigger and better which is often the most difficult.

In particular, asking your boss for a raise can feel uncomfortable, and something which you need to build the courage to do. But with the right preparation and the correct facts, you can step forward with confidence. How do you prepare for such a conversation? Firstly, you need to be realistic. If you work for a small startup company, there may not be the budget to pay you, and you also need to take into account what other professionals in your role are being paid. You also need to be realistic about whether you truly deserve a raise in your salary. To prove to your boss that yes, you do deserve it, you need to prepare evidence of how you’ve made a difference to the company, and for the better. Lastly, don’t be afraid to negotiate. It’s rather unlikely that your boss will automatically accept your suggestions of a new paycheck, so if they do agree to a raise, they will often counter it with the amount they feel is correct. The trick to negotiating is to enter into the conversation with a raise a little higher than what you would truly want. If they accept that, you’re a winner with the extra money. If they don’t, you can still achieve the money you want by showing your willingness to compromise.

How to Recover from Financial Misery

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