This is such an inspirational guest post from Charlee of Humble in a Heartbeat!
I am, without a doubt, very financially aware. But even though I have a finance degree and a strong budgeting example from my dad, I have failed my family time and time again over the past year. Our finances are very weak at this point, and while this has a lot to do with my husband’s new business venture, it is also my fault.
Before I go deeper into my story, let me ask you a question. If you were at a point that you didn’t know how you were going to pay for your house, would you keep doing the same things financially? Or would you take a step back and consider that maybe you needed to make a few changes?
How My Finances Brought Me to My Knees
I personally decided I’d better come to terms with our situation and figure out how to get better. Lucky for me, when I came to this realization, I was already blogging and reading many financial blogs. I kept reading about all kinds of ways to save money, make money, and invest money. I already knew a lot of them. But did I ever really do anything about them? Not to the point I should have.
So when my husband and I decided it was better for him to quit his current job in favor of starting his own business, we had to cut way back on basically everything. We’re not spendy people, that’s for sure, so it was hard to cut out things that we figured were essential to life.
We needed to make lasting changes to our finances to get on a better financial path, and these are the steps we took to get there.
The 4 Steps to Creating Lasting Change on Your Finances
If you take the time to go through these four steps, you should be able to create lasting change on your finances for the better.
Unfortunately, change does not happen all at once. It takes effort and lots of time on your part. We live in a world of instantaneity. You see something you love on Pinterest and just know you’re going to change, so you pin it, and it sits there on one of your boards for months or years without you ever doing anything about it. You watch a life-changing documentary on Netflix, get really excited about making those changes, and go back to normal life the next day.
If you want to change bad enough, you will make it happen. Everyone has the power to create change, and YOU are no exception.
1. Recognize Your Problem
When you have a financial problem, whether it be spending more money than you make or never sticking to your budget, it’s easy to compare yourself to others. If everyone else seems to have the same problem, you will not admit that anything is wrong. Until something happens that pushes you to change, you never will.
So the first step in causing real change to take place with your finances is recognizing that you have a problem. You should write it down, give it a name, and start thinking about why it is a problem. Write a list of pros and cons with the problem and think about the past and where you might have gone wrong.
Last year, I pretty much stopped budgeting because life just got overwhelming. I didn’t realize how big of a problem this was until my husband quit his job and took a paycut. That’s when I started seeing the ripple effect that had taken place from not being diligent about our budget.
After recognizing my financial problem, I wrote down a list of mistakes that I had made as the family finance manager. They helped me see all of my problems (because there were many) and where I needed to change.
2. Write Down Habits You Need to Change
The next step to bettering your financial situation is to write down the small habits you want to develop to help you change your problem. It’s best to keep things positive so you are motivated to make the change.
I took my list of mistakes and wrote out what I could do to fix each mistake. It is so relieving to have it on paper! When there is too much clutter in my mind I just get stressed out and forget what I need to do.
To fix my budgeting problem, I resolved to start using a bill pay system, go on a spending freeze, simplify our budget, and start saving money each paycheck BEFORE paying our bills. It seems like a lot (and there were even more things I did), but I took my time and didn’t try to accomplish everything at once.
3. Get Help or Use Your Knowledge to Change
Once you know what habits you need to change, you need to find a way to get there. It might require some outside help from another person or from blogs, books, or online courses. If you already have a base knowledge of the subject, you can start from there and fill in the blanks by researching more if you need to.
Since I wanted to revive our budget, I searched out blogs that taught the basics of budgeting. I was also fortunate enough to review Jessi’s book, Build a Budget That Works, and it helped me understand some things about budgeting I never would have considered before.
4. Constantly Check on Your Progress
Finally, when you are working on changing a bad money management habit, you have to constantly check up on it. Even when you are doing better for a while, you still need to watch out for any old habits that can reverse your progress.
I wrote out my mistakes and used my knowledge and other resources to help me out, but I am still finding that some bad habits just aren’t going away. I know I probably need to list all the baby steps to correct a specific habit.
The purpose of doing this exercise for each and every bad habit is to ultimately reach financial goals that you couldn’t have while still managing your money unwisely. Your financial situation is not a roll of the dice. It is a result of the habits you have developed, and the results will vary depending on these habits.
What is one habit you could change to turn your finances around?
Charlee is a stay-at-home mom to two rambunctious and beautiful girls. She writes about her mistakes as a mom and the family finance manager on her blog, Humble in a Heartbeat. You’ll also find plenty of ways to save money on groceries, detailed posts about homemade baby food, ideas for feeding kids, and how to finally get all those pictures on your computer organized.
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[…] more you are aware of your behavior, the more you will think about changing and turning your finances around. Let’s go through some reasons you might be living paycheck to paycheck and then talk about […]