Most financial advice is provided for people who have enough to get by on rather than for those who are struggling financially.
Struggling to make ends meet often comes about in one of two ways:
The first is when you actually have enough money but you’re not using it mindfully.
And the second is when you simply don’t have enough money coming into meet the bills and expenses you’ve incurred.
But it doesn’t matter what situation got you to where you are now, if you’re struggling then it’s time to take action! And here’s how I suggest you start:
1. Freeze all new spending
It might sound cliché but “when you’re in a hole, stop digging!”. If you’re struggling to make ends meet then you need to put a freeze on any new expenses.
This is often easier said than done I realise, particularly when terms like “retail therapy” are part of our vocabulary and a go to strategy for many stressed out, sad, anxious or depressed women.
Almost like a vicious cycle, we lack money and we feel bad, so we go shopping to make ourselves feel better.
Not long after we suffer from buyer’s remorse when we realise we’ve just worsened the situation we we’re seeking to feel better about in the first place.
Trust me – it’s absolutely necessary to stop spending on new things if you’re going to get yourself back in the black.
2. Get Clear on Your Situation
Before you can work out what to do, you first need to work out exactly what position you’re in.
I know it can be frightening, scary or embarrassing and yes you may feel some guilt jealousy or shame around your situation but remember, it’s not always disheartening!
Sometimes, the picture we’ve painted for ourselves is far worse than the reality!
Either way, we can’t create a plan or figure out the next steps if we don’t have a clear picture of where we are right now.
It’s time to write down and get clear on your income and all of your expenses…every single one of them!
Start by making a list of everything you must spend money and then list everything you like to spend money on.
You can use your bills, recent bank and credit card statements or receipts to help you make a complete list. Be honest!
The next step is to list all the bills or expenses that you have overdue, and that are falling due in the next month.
Make a note of the dates they are falling due and highlight the most important ones.
There is no need to judge yourself. Instead, take a deep breath and relax as you’ve just created consciousness around your money situation.
And it’s from this place of awareness that you can start to make decisions and take action for the future!
3. Prioritise MUST over LIKE expenses
There are two ways to get ahead. The first is to increase your income. The second is to decrease your spending and expenses.
For most of us, whilst not our preferred method, the second option is probably the easiest and most realistic to achieve with immediate effect.
Our expenses can be endless as our wants are often insatiable.
So when we don’t have enough, we need to Prioritise what is MOST important. This is where our list of what we MUST spend and what we LIKE to spend are going to come in handy.
Your job now is to prioritise and decide exactly where your next pay or income is going to go in accordance with your new priorities.
In fact your job every month from now on should be to tell your money where to go.
If right now you can’t afford to cover everything on both your lists, then review the LIKE to spend list and see what you can cut back on.
Reset your priorities for the next month. Remember it doesn’t have to be forever but it might be for the next little while if you’re going to be able to get back in the black.
Whilst it’s not a ‘magic fix’ what many of us don’t know is that most companies will offer flexibility for payment terms of bills and expenses – but only if you communicate with them.
Don’t wait until you are behind or late in paying don’t fall silent and ignore it.
Be proactive and see what arrangement you can negotiate with them.
There is no shame in reprioritising your spending, saving money, paying down debt or trying to get ahead! Ask for their support on your new spending journey and see if you can come up with new low cost ways you can still socialise and have fun.