Lowering Financial Stress Part 2

Lowering Financial Stress Part 2

6 keys on how to break free

By: Genevieve Darr

If you have already read Part 1, you are ready to move onto step 3 and 4. If you haven't read Part 1,
click here to get started. In Part 1, we covered exactly where your hard earned cash is going, negotiating "needs vs. wants", and taking a hard look at ones' self to figure out what else might be the problem. The next lesson, is a hard one. All of these steps will help alleviate some of your stress that can help you sleep at night, but there is still an underline of debt that needs to be wiped clean so that we can be free. Easier said than done, right? Continue to step 3.

3. Get help

Getting help, is something I have a hard time with. I have pride and I am also extremely stubborn. Asking for someone to "bail me out", is non-existant in my vocabulary. I believe everyone is in 2 categories of life; "the savers" vs. "the spenders". If you're a "spender", having a night and shining armour (parents, family members, friends) continousouly being there for your financial rescue, will never solve your problem. You'll just find something else to get yourself into debt with and you will never learn. Sure, we all spend money on something and we all have our vices. But a true "spender" doesn't think for tomorrow, they only think about what they have to have today not taking in the consideration of circumstances they are about to endure. Other people are affected by your actions, especially if you have children.
Most of us, however, don't have the opportunity for someone to bail us out and we need to get ourselves out of the quick sand we have leaped into. The type of help I am talking about is getting financial advice from someone who really knows what they're talking about. It can be a friend, or you can go a step further and get a financial planner. A financial planner will go over your debt and give you a guideline on exactly what you need to do to get yourself out of, and stick with it. Make sure you do your research if you are to get a financial planner. Find out how long the company has been in business, if they are certified, and check out other clients that have worked with the company as well. Whether you get a financial planner or speak to someone that is financially stable, you will set forth a goal and stick with it!

There is another type of help, and this is for the more serious spending cases. If you are a gambler, a shopoholic, addicted to spending money on something particular, get help! There are plenty of support groups out there that can support you and help you.

4. Cut the plastic

All of those colorful credit cards in your wallet, all have interest fees tacked on to destroy you.

There is a difference between "good" credit and "bad". Having multiple credit cards and making minimum monthly payments, is a sign that you may have too many cards. And God forbid if you are robbing Peter to pay Paul on bills, you really need this advice. It is important to keep 1 credit card if something ever happens. There are people out there, believe it or not that have tackled their finances and have no credit cards at all. They have an egg nest that they put money towards, in case something arises. In my first step, I put down $500 for unforseen expenses. I just put 500 dollars down because this is something I can afford. Some people save thousands of dollars for a rainy day. The goal is to set aside what you can so that when lightning strikes, you can tackle the blow. If you're a spender, the easiest way to set aside money, is to have a money jar. Just like a piggy bank we had as kids, I want you to put money in that jar based on this simple activity:

I want you to ask yourself questions-
Do you go to Starbucks? Do you go to the gas station and get a drink, maybe a snack? Do you eat out for lunch every day? Entertainment on the weekends? Have drinks with friends?
This list could go on for eternity, but what I want you to do is to start recording some of your spending habits that we necessarily dont think of as a problem. I want you to have a piece of paper or a tablet and keep it in your car. Every time you spend a dime, write it down!
 Some of you won't need a week to figure out where your chum change is going, and will figure out what needs to be done. Some of you might need  to get to a bigger amount, in order to see where the problem lies. Do this activity for as long as it takes, but once you realize that something needs to be changed, take that list, prioritize, and cut it down. Every time you save, I want you to put it in the jar.

I just called a "spender" and for now, we'll just call him "Bob"to ask how much he has
spent in Starbucks in one month, and how much he spends on lunches and stopping at the gas station on a daily basis.

250 in Starbucks
300 in eating out and stopping at the gas station.
That's $550 in one month and to him, that's not even his vices.

Smoking, Shopping, drinking alcohol, having the NFL package & MLB, unlimited data plans, going out with friends, buying expensive foods, weddings, trips, etc.

You can see this person is a "true spender" but what I want you to realize is you and what you're doing.  $550 dollars towards something you owe, can really help out.

Challenge yourself on what you can save, and once you have enough in the jar, pay it off and cut it up! Making minimum monthly payments will only keep you in a dark hole, and it's time to see the light. If you are a serious case like "Bob", this is going to take years to over come. Slowly and surely, things will change not for you wallet, but for your sanity as well. And you might be able to finally start saving for the future.

One thing I didn't mention above, is that when "spenders" see money, they light up like a Christmas tree and can hardly contain themselves. The first thing that comes in their minds, is what else can I buy? If you're one of these people, the piggy bank can become an issue and you might have to go for the "out of sight, out of mind" approach.

Get a savings account and if you have a real problem, make sure the bank isn't local so that you can just go there any time and withdraw. Once you have a savings account, put money in every month but the key is cutting up the credit card the savings plan comes with. If you have followed these steps, it makes it harder for you to just spend it like that.
When it's time that you have had enough saved, go to the bank, and send it off immediately. If you have to have a stamp and envelope in hand, do what you've got to do!

And when you do pay that credit card, medical bill, whatever it is off, celebrate! You deserve a little treat here and there and it's hard to go cold turkey. Celebrate, but don't go crazy. This is something to look foward to, and will help you grow.
Spending more than your means can be an addiction just like any other drug.  It can lead to financial hardship, losing your home, divorce, and even death. These are all serious circumstances, but if you follow these steps and stick with it, you can hit the stress right out of the park! The
next time a new challenge occurs, you'll know better on what to do and how to tackle it.
When you're ready for the next challenge, go to step 5.

5. Make a Budget- And Stick to it.

Come back on Friday, for Part 3 of our series.