Is debt causing you stress? Are you starting to feel the consequences of the holiday or everyday excess? Over-eating and over-spending are common activities during the holiday season and appear to be on the rise as daily behaviors for Americans.
According to National Endowment for Financial Education (NEFE) 2017 Living on the Edge publication, 36% of American’s are considered “financially fragile.” Financial fragility is measured by an individual’s ability to cope with unexpected expenses (emergencies) in a short timeframe. Specifically, $400 within 24 hours and $2,000 in 30 days. Are you in this category? If so, do not despair, you can change it. You have control over your life and choices. You can harness your behavior if your survival is at stake.
Tool #1: Get some type of organizing system to track your money.
Organizing systems can be on paper or electronic or a combination of both. An example
would include a three-ring notebook with labeled dividers to keep track of bills paid.
Another system would be a small notebook, file folder, accordion file, box, basket,
files placed into filing cabinet, or any other organized method that works for you.
An electronic file would include an Excel spreadsheet, Word document, or an app that
you use to track your money. The key is to use your organizing system! If you don’t
like it, ask others, google it, and change it. Always be looking for new ways or strategies
to improve your organization system.
Tool #2: Use SMART goals to help you change your behavior.
Goals need to be specific, measurable, attainable, realistic and have a time limit.
SMART goals and what each acronym mean:
S: Specific what is going to be done or accomplished?
M: Measurable how will you measure your progress (money, grades, weight, etc.)
A: Attainable is this a goal you can reach, is it within your power to control? If not,
reformulate a new goal.
R: Realistic what do you want the end results to be?
T: Time Bound, define a clear deadline or end
Work on one goal at a time.
Tool #3: Write down where your money comes from (Income).
Gather pay stubs, benefit statements, any record of payment. An example of income
is money earned from your job, having a business, seasonal work (construction, recreational).
Tool #4: Look at what debts you owe. Create your Debt picture (debt log) then record monthly expenses
Debt picture via debt log
Monthly Expenses-Where does my money go?
Tool #5: Short-term Strategies to make extra money.
How can I earn more by working extra (or getting a second job short-term), selling
something, cutting costs, or planning for expense (such as the grocery store)? What
can we do to have enough money to make it through the month? What strategies or tips
can I use to make my money stretch further?
Tool #6: How do I make tough choices in tight months?
In tight months, it is important to pay for a place to live, utilities, food, and
a way to get to work. Other obligations such as child support or loans are included,
however it is important to prioritize the costs of not paying certain bills/expenses.
In conclusion, there are many tools to help you get “back on track” with your money.