Take Back Control Of Your Finances

Collaborative Post

It can feel very overwhelming when you have financial, whether expenses, dealing with debt, or just trying to make ends meet. Taking back control of your finances is possible when you approach it right and have the right mindset. You can develop a clear plan and focus on your financial goals in order to move closer to stability rather than financial chaos.

Photo by cottonbro studio

In this blog post, we're going to have a look at some of the steps you can take to regain control of your finances:

Look At Your Complete Financial Situation

One of the first things you need to do when you want to take back control of your finances is to have a look at where you are currently standing. You need to be completely honest and have a look at your income, expenses, assets, and debts. Without doing this, it's going to be very difficult to make informed decisions about your finances. You need to create a financial snapshot where you look at all of your income sources, such as side jobs, salary investment income, and more, and then compare them to your monthly expenses. Look at all your expenses in categories such as housing, groceries, transportation, utilities, and entertainment.

You then need to list all of your debts, including student loans, credit cards card payments, personal loans, and mortgages. Make sure you include the interest rate and monthly payments for every single one. You can then identify problem areas, and then if you're expenses are more than income, or you're looking at high interest debt, this is where you need to focus your attention first. When you have a clear picture of your financial situation, you can start to develop a plan to address your challenging areas and set achievable financial goals.

Set Financial Goals

Once you know where you stand with your finances, you need to set yourself up to be clear and realistic. When you have goals, you have something to work towards, which gives you the motivation that you need to stay on track with your finances. You should include short-term, medium-, and long-term goals. A short-term goal would be something that you want to achieve within the next year, such as building an emergency fund or sticking to your budget. A long-term goal would be something like saving for retirement, which is going to take you a long time to achieve. You need to be very detailed about each goal. For example, you need to say I am going to save x amount for an emergency fund within this year.

Create And Stick To A Budget

A budget is one of the most important things that you need when you are trying to recover from a bad financial background. It helps you track your spending, prioritize your savings, and ensure that you are living within your means. If you are trying to pay off debt or save for a large expense, then budgeting is even more important.

Track all of your spending and make sure that you are identifying exactly where your money is going. This way, you can have a look at the areas where you can make cuts. Make sure that you prioritize essential expenses such as your rent or mortgage, utilities, food, and minimum debt payments. All of these need to be covered before you start allocating any funds towards your savings or debt repayments. You may want to look at the 50/30/20 rule, as this is a really easy way to begin managing your budget. You put 50% of your income towards your needs, 30% towards your once, and 20% towards your debt and saving repayment. When you use a budget, and you are disciplined with it, you will be able to achieve your financial goals in the future.

Consider Selling Structured Payments

Suppose you are getting payments from a structured settlement, but you are in need of cash now to pay off priority debts, invest in your future, or cover unexpected expenses. In that case, selling your settlement payments may be a good option for you. Structured settlements are payments awarded to individuals as a result of legal claims such as a personal injury lawsuit. While these payments may be a good, steady income source, they may not always meet your immediate needs. When you sell your payments for a lump sum of cash, it can be particularly helpful to pay off larger amounts of debt or make a large purchase.

Increase Your Income

This may seem like a really simple thing to state; however, as well as cutting back on expenses, finding different ways to increase your income can improve your chances of financial recovery. Whether it is freelance work, a side hustle, or asking for a higher-paying role, having more income can make a huge difference. Have a look for some freelance work where you can use your existing skills to offer surfaces on platforms like Upwork or local classifieds. Freelance writing, consulting, and graphic design are all good ways to provide extra income on a flexible schedule. You could always have a look at monetising hobbies such as crafting, photography, or baking. You can also seek a promotion or a new job if you feel like you are getting underpaid in your current role. Then, you may want to think about asking for a raise, or you could start looking for a higher-paying job within your field.

Conclusion

It can be daunting and challenging to take back control of your finances however, it is something that can lead you to greater financial freedom. You need to make sure that you are making smart and intentional decisions that can help you take back control. By building a realistic budget, setting clear goals, removing debt, and increasing your income, you can slowly take back control and start feeling more financially secure in the future. Remember, heading down this road requires persistence and patience.

—End of collaborative post—

Free self-development courses
👇

Tap on any of the courses below to start learning how to:

boost your productivity (withGTD),
get focused (with Deep Work),
design a successful + fulfilling life (with The 7 Habits course),
or learn the art of influencing others (with the How to Win Friends & Influence People course.)