We all experience money anxiety. I have, maybe you are now.
While I know nothing about your situation, I think I can help you break free.
There’s a great quote from the character Trixie on the show Deadwood, “Hard work dispels worry.” I remember how profound I thought it was the first time I heard it. And it’s as true today as the first time I heard it.
Now, I’m not accusing you of not working hard. Moreso, I share that because I’m going to help you put together an easy-to-follow plan that will help you break free of any money anxiety you’re experiencing.
When we don’t address obvious problems, they don’t go away. They get worse. For whatever reason, this is especially true for financial problems. When we get stuck in a negative cycle, it’s hard to break out.
Much of my 20s were spent in a negative financial cycle. I avoided financial matters, didn’t track my spending, never budgeted, and was in and out of credit card debt. This gave me anxiety.
Fortunately, I got my act together, and no longer have stress and anxiety about money. I share that so you know I’ve got personal experience with it. I’ve also spent the past 20+ as a financial advisor helping people get on the right track financially. I’m honored to be named to Investopedia’s list of the top 100 financial advisors many years running.
Here’s what we’ll cover:
- Addressing the problem
- Stop living paycheck-to-paycheck
- Get out of debt
- Set goals
- Begin working towards your goals
Let’s get started.
Addressing the problem
When there’s an elephant in the room, we all know it. Instead of ignoring it, we need to do the opposite and name it. What’s your elephant?
Here are some to the biggest problems facing Americans, and causing money anxiety:
- Almost two-thirds of us are living paycheck-to-paycheck.
- Almost half of all couples fail to discuss money.
- The average credit card debt is over $6,000.
- Almost half of us wouldn’t be able to come up with $400 in cash in an emergency.
Are any of those your elephant? Perhaps all of them are?
Here’s a financial first principle: What gets measured, gets managed. It’s time to start paying attention and addressing your problem(s).
Stop living paycheck-to-paycheck
When you live paycheck-to-paycheck, you’re broke. More often than not, you’ve got more month than money, and I can almost guarantee that’ll cause anxiety.
In order to break out of that cycle, you’ve got to know your financial facts. Your facts consist of your budget, cash flow, and beliefs about money. We’ll take them one at a time.
A budget is a plan for your money. It will tell you your fixed and variable monthly expenses. You’ll know when you’re on track with your spending, or you’ll know when you’re going over in certain areas. In order to break free of money anxiety, a budget is essential.
This is simply paying attention to the money you have coming in, and the money you have going out. And it’s easy to not pay attention to it. If you haven’t been in the habit of monitoring your cash flow, log into your financial accounts and review the transactions for as long as you’ve avoided them. If it’s been a year, review the last year’s worth.
You’re looking for things you shouldn’t be there, expenses you’re forgotten about, and things you no longer value and can get rid of. The first time I did this years ago, I found hundreds of dollars of recurring expenses I got rid of.
I have finite resources, and I’m assuming you do as well. When we’re trying to get ahead financially, we’ve got a choice to make; Can we earn more money, or can we figure out how to live on less?
As you move forward, I urge you to do both.
I’ve never taken a vow of poverty, and I don’t expect anyone else to. But you may need to take a temporary step back in order to get yourself in a better financial position. Once you break free from your problem, you can always add back anything you may have cut out.
Figure out how to bring in additional money, and or cut expenses. You’ve got to figure out how to stop living paycheck-to-paycheck.
Get out of debt
Debt is crushing us. It keeps us stuck.
When we’re in credit card debt, it’s hard to see a way out.
The first step is to get organized. Get an accurate accounting of all your debt; write down the total amounts, the interest rates, minimum monthly payments, and the company. When you’ve done that, you know what you’re up against, and can come up with a plan for how to pay it all off.
To help you create your plan, you can access our Get Out of Debt course for free.
Without a compelling vision for our futures, we are not very inspired to take meaningful action. When we spend the time to think about how we want our lives to be, magic happens. We’re able to do hard things, and to make tough choices in service of getting the lives we want.
That’s the amazing thing about goal setting. We can think about what we want, make plans for getting there, and then work to execute on them.
I like to think about goal setting in six key areas:
- Career and financial
- Personal development
- Peace of mind
Instead of thinking about money in a vacuum, think about all the important parts of your life and what you want. To help you get crystal clear, you can access our Goals course for free as well.
Begin working towards your goals
Now it’s time for the “hard work” part.
When you go through proper goal setting, you’ll also know what actions you can begin taking immediately. Getting started working towards your goals will eliminate procrastination and ease your money anxiety.
Some of your goals will be short-term, so you’ll be able to achieve them within one to three years. Others will be mid-term, like buying a home or paying for a kid’s education. Your long-term goals like retirement may take 30+ years. As you do what needs to be done on a monthly basis, your confidence will increase and so will your drive to do more.
So much of success with our finances is simple, but not easy. When you name your problem, start paying attention to the right things, get clear on what you want, and start working towards it, you’ve positioned yourself for success.
From there, you let the chips fall where they may. And you know you’ve done everything you can to find the success you’re looking for.
You’re someone who is capable of becoming financially successful, alleviating money anxiety, and getting the life you want. You got this.
If you’re ready to take control of your financial life, check out our DIY Financial Plan course.
If you’d like help getting on the same page with your partner, check out our Same $ Page Course.
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