It seems that everyone is looking for a way to save money these days. With record unemployment, higher healthcare premiums, and tighter budgets, now is a time when most people need to save a little cash. When we started on our debt free journey, we began looking for new ways to save. What we found is that there are a plethora of ways to do just that; most of these are uber easy to implement. However, it may require you to take a serious look in the mirror, but - be forwarned - you may not like what you see.
You can read hundreds of articles on the internet listing ways to save money. The problem with most of them is that they don’t delve deep enough. They only address the symptoms of the problem, not spending any time on taking care of the roots of those problems. “Lower the interest rates on your credit cards” is a great idea. Yet, why did you get into credit card debt in the first place? “Pay off your debts, starting with the smallest/largest/most emotional balance” first. That’s great advice too. However, what made you live beyond your means in the first place?
Making lifelong changes means taking a long look at your own behavior. What financial mistakes have you made and what have you learned from them? Are you spending all of what you make? Are you making small gains against your debt only to spend the surplus somewhere else? If you are truly ready to make a permanent change in your financial behavior, it would greatly benefit you to consider these five steps.
1. Re-evaluate Your Needs and Wants
If you are currently facing financial hardship, it may be time for you to decide what you actually need. You may like having cable tv, but that doesn’t mean that you actually need it. You may enjoy eating at different restaurants each day during your lunch break, but you would be better off eating leftovers from home at your desk. Take some time to find out what could be cut from your budget, and there is a good chance you will uncover a lot of money that doesn’t need to be spent. Remember, as you whip yourself into better financial shape, you may be able to afford these wants again in the future.
2. Learn to Tell Yourself “NO”
If you are experiencing money problems, chances are that it has been your own choices that have put you in your current financial position. Becoming financially responsible and getting out of debt takes time and willpower. If you cannot afford to pay cash for something you want, you can’t afford it. Period. If you want to get out of debt and stay out of debt, you have to learn that you can’t have every last thing that you want when you want it.
This is sometimes hard for people to accept. Afterall, you work hard for a living, right? Being serious about your financial goals means that you may have to ditch your feelings of entitlement. It may be time for you to stop being an overgrown baby and learn to go without…for your own benefit.
3. Quit Inflating Your Lifestyle
As you progress in your career, you will (hopefully) start making more money. It can be very tempting to give into lifestyle inflation. A bigger house and a fancy new car may be things that you desire. However, becoming financially responsible means living below your means – not at your means. If you are spending your entire income each month to maintain your lifestyle, then you cannot afford your lifestyle.
It is time for you to take a look at the bigger picture. Everyone, including you, needs to have an emergency fund and be actively saving for retirement. That may mean moving into a smaller house and driving older cars. It may mean less shopping and more time relaxing at home. Regardless of your particular situation, living at your means is a financial disaster waiting to happen. You are only one layoff or sickness away from financial ruin. Learn to live with - and be happy with - less.
4. Quit Making Excuses
When discussing personal finance, I can always count on some people saying that it is impossible to keep a budget. “I can’t get ahead because something always knocks me off course!” I have heard it a thousand times. While there may be some truth to this statement, feeling like you cannot stay on budget can become a self-fulfilling prophecy. If it seems so hard, then why even try?
The truth is that you can stay on budget if you put some effort into it. Creating a budget and sticking to it can be a reality for you if you do the work. A good way to start is by building a begginer emergency fund so, when an unexpected expense occurs, you can pay for it without wrecking your budget. Stop making excuses and start taking actions that will benefit you.
5. Re-Evaluate Your Relationship
In committed relationships, it is important to be on the same financial page with your partner. If one of you is a saver and the other is a spender, this can create huge problems. How can you possibly get ahead if you are married to someone who spends all of your money? No matter how good your intentions are, you cannot control another person. This can be especially true if they are the bread winner and feel like they are entitled to buy anything and everything that they want.
If you are in a financially troubling relationship that shows no signs of being fixed, it may be time to break it off – particularly if you don’t have children together. Staying with a financially irresponsible partner can mean struggling for the rest of your life. Ask yourself, what kind of life do you really want to live? And, is this relationship really worth it?
As you can see, making the decision to become financially responsible isn’t always pretty roses and balloons. It takes hard work and a willingness to be honest with yourself about your past failures. Confronting and changing the root causes of your self-defeating financial behavior may be painful. However uncomfortable it may be, it is the only way to truly break free from the chains of debt – and nothing feels better than financial freedom.