A recent study showed that at least 6 out of 10 Americans are living from paycheck-to-paycheck, with little hope of getting ahead any time soon.
It’s easy to miss how many people are struggling when so much media coverage is dedicated to financial markets, which gives one the impression that everybody else must have plenty of money invested.
The fact is, most people are struggling and stressed out over money. Or to put it another way, most people are strapped.
And when you’re strapped, you experience a different range of emotions than you do when you’re prospering.
You feel anxiety and fear over what might go wrong next. Will a car break down? Will an air conditioner or furnace go out? Will the company make cuts and lay off workers?
You feel shame because, in our culture, we measure our worth by comparing ourselves to others around us. And we have a knack for choosing people who seem to have it all together for those comparisons.
You feel discouragement and a sense of hopelessness. While anxiety is acute (it’s something we experience in regard to the day, the week, or maybe the end of the month), discouragement is usually long term. We get discouraged when we believe we’ll be strapped endlessly, or at least for years to come.
The question is, how do you alleviate the anxiety you often feel about your finances?
1. Realize you’re not alone.
That’s right. 6 out of 10 Americans are living paycheck-to-paycheck. You’re not alone. In fact, some of today’s top financial experts have been to the bottom and back again, though it’s easy to forget this when we look at them merely as “experts.”
The truth is, we face quite a few challenges when it comes to the issue of money and finances:
- Our culture makes it seem that having things is the key to happiness (it’s not), which makes it seem justifiable to use any means necessary to get all the thngs we want.
- We attach a lot of shame to the issue of finances. The very idea of “keeping up with the Jones’s” implies that we’re comparing ourselves to those around us all the time, and too many financial experts have utilized the power of shame and guilt to sell wisdom on how to fix what’s broken.
2. Develop a basic understanding of the economy.
Capitalism works like this: Everyone is free to make decisions and start businesses and figure out how to game the economy to the best of their ability.
You may or may not agree with the ethics of those who game the system well, but since change happens slowly, you should at least learn from them enough to know what to do to earn something of your own.
3. Assess the mess you’re in.
Look up every account. See every charge. Every expense. Every single source of income. Make a thorough assessment of what you can actually make and what you actually spend in a given month.
The truth is, most of us just don’t want to know what we should know. But the first step in correcting things is knowing things.
4. Make a thorough inventory of your financial picture.
That is, make a list of every account, every username, and every password. Determine what is being spent in each and every account and make sure you actually intend for it to be spent.
5. Commit to cutting where you can.
Don’t misunderstand me. I don’t think you’re $5 coffee is what has kept you in whatever position you might be in. But you might be surprised how many $5 coffees you have in a month’s time without realizing it.
The goal is not to completely limit you from doing everything you want to do, but rather to help you be disciplined in what you really want to do and to help you say, “No!” to the things you really don’t want to do.
6. Eliminate unused or unnecessary subscriptions.
We live in a subscription-based economy. It’s very easy to accidentally get into trouble. As you’re combing through your financial accounts, look for recurring charges for things you don’t use or want anymore and cancel them.
7. Pay off one bill at a time.
This is often called “snowballing your debt,” because a snowball picks up speed and momentum while heading downhill. The advantage is that you feel your position getting better, one debt at a time.
My recommendation is that you start with the highest interest rate and the worst kind of interest first. Pay off revolving debts (credit cards), then cars, then the mortgage (because this debt still has some tax advantages), and finally student loans.
8. Consider your borrowing and consolidation options.
If you own a home, you’re going to have some advantages. You’ll be able to borrow against the equity in your home. Or you may be able to refinance and take cash out as you do.
9. Think about downsizing and minimalizing your life.
Can downsizing be an option in this current economy? Yes, IF…
- If you know you have plenty of equity in your home.
- You have quite a few years to keep paying on your mortgage.
- Your market is increasing.
- There is something worth buying.
And what is “worth buying?”
It’s simply a matter of, can you buy a home that will continue to increase in value over the next decade?
10. Keep tabs on all of your accounts.
You’re going to have to do a monthly check-up. You may not feel like facing it, but don’t do it so you can beat yourself up. Do it so you can save yourself some worry in the long run.
11. Start a side hustle.
This is the day and age of the side hustle. I’m obviously a big proponent of freelance writing, blogging, and affiliate marketing. But those certainly aren’t the only avenues to consider.
12. Start saving, and do it automatically.
You can automate your way to wealth, if you will. I use Acorns, which takes the change between whatever I spend and the next dollar amount and invests it into the stock market.
Your bank likely has an automated savings plan. Automation is the big secret to successful savings.
13. Start giving something away.
If you don’t give something away, you will automatically adjust your life to having everything you earn. You’ll consume it all and will cut short your potential for true fulfillment
The fact is, growing a generous soul is a key to your spiritual and relational health. If you don’t stretch your generosity muscle, you’ll experience generosity atrophy.
14. Meditate daily on where your real worth comes from.
Your real wealth and value as a human being never comes from what you do, no matter how successful you are. And it doesn’t come from what you have, either.
It comes from within. From deep in the soul where you and God alone commune about your identity.
And the more confident you are in who you are, the less stress you will experience along the way.
Photo Credit: rupixen.com.
Brandon Cox is an entrepreneur, Northwest Arkansas Real Estate Agent, and blogger. He’s also a former pastor and church planter who still mentors and coaches church leaders. In addition to Unstrapped Life, Brandon blogs about life, leadership, and digital marketing.
