Have you ever felt like you are bad with money? Or that you just don’t have what it takes to finally get your finances under control?
You are not alone.
But it IS possible to stop being bad with money, and become better at it! (It’s also possible that you might be better at it than you realize.)
So let’s talk about what it means to be bad with money, and what you can do about it.
You can feel like you’re bad with money, actually be bad with money right now, or both.
Feeling Like You’re Bad With Money
The feeling part is pretty self-explanatory: you have uncomfortable feelings around money, and feel like you don’t handle it well.
Maybe you look around at other people and feel like they’re all doing better than you financially. Or maybe you missed out on learning about money, and feel bad about that.
Keep in mind that how you feel right now doesn’t have to be how you will always feel.
What It Means To Objectively Be Bad With Money
Objectively, being bad with money means your finances are in a mess at the moment for whatever reason.
So for example, for right now you might be:
- in debt up to your eyeballs
- living paycheck to paycheck
- having a lot of overdrafts on your checking account
- constantly missing payments and having late fees
- unaware of how much money you have, or painfully aware that you don’t have enough
- without a budget
- missing an emergency fund
- behind on retirement
- or struggling with money due to ADHD
If you felt bad reading that list, stop! Those are all things you can change, and you don’t need to be a money master or to have any special skills to do so.
So remember this:
Being Bad With Money Is Not a Permanent State
You might be bad with money right now, or just be struggling with certain areas.
But that doesn’t mean you will always be.
Small steps in the right direction can change your entire life.
I know this from both personal experience and from seeing the changes in others around me.
(Everything on that list above described past me! Present me is good with money.)
How To Stop Being Bad With Money
The very first step is to stop beating yourself up or feeling hopeless. There is hope, and you can do it.
Because if you feel like there’s not, you may think “what’s the point in trying?”. So please trust me when I say you can make some changes and turn thing around for the better.
Next, tackle the items in a way that makes sense. The order below works best in general.
1. Take a Look at Your Current Situation
Which areas are you struggling with? Make a list. Then step back and see which one bothers you most. Often that has to do with income, paying bills, and debt. Which isn’t surprising, since those are all related.
2. Track Your Spending
Tracking your spending as you spend it is key. Many times, your money isn’t going where you think it’s going. Or you’re spending more than you realize. The only way to know for sure is to track it for at least a month. Here’s how to track your spending so it actually makes a difference.
3. Make a Budget
If you don’t already have one, make a budget. This is just a plan for how you want to spend your money. You put the most important things first, and the least last. If you have more month than you have money, having this priority list will help as you work on ways to bring in more money. Here’s the easiest way to create a budget. Make sure to leave a small buffer amount in your checking account too.
Keep in mind that no one’s budget is perfect right away! Adjust each month, and you’ll get closer and closer to having it down pat over time. Doing what you can to make more money and reduce unwanted spending goes hand-in-hand with this step.
4. If Late Fees Are a Problem, Automate Payments
If you’re like me and you forget to pay bills or get behind on doing so, even though you have the money, automating payments is a great way to go. Most companies that you pay regularly have a way for you to set that up. Just give them a call or look on their website to find out how. In my case, I have everything automatically paid on a credit card, and then I have my credit card auto-paid from my checking account.
5. Build an Emergency Fund
This is really key. Everyone has emergencies that require money. Pretend building an emergency fund is your emergency, and get it done quickly once you are no longer behind on any bills. Here are tips on how to build an emergency fund in 90 days. Make saving for emergencies and for other large irregular expenses part of your budget. You’ll be glad you did.
5. Make a Plan to Get Out of Debt
If you’re in debt, chances are you’re spending a lot of money on interest. You’ll have more money without that, so make a plan to get out of debt. The debt snowball method is a GREAT way to go for that. It’s easy, simple, and effective if you have several debts.
6. Start Investing for Retirement
As long as you aren’t already retired, it’s not too late to start investing for retirement! Like many money-related things, this works great when you automate the amount you send in. If you have an employer-sponsored plan like a 401k, signing up for that is an easy way to start. You can have a percent of your paycheck deducted each time. Then you can choose what to invest in within the 401k. If you don’t, you can start an IRA and do something similar with your contributions. Start with the amount you feel comfortable with, and increase it a little every few months.
Even if you feel like you’re bad with money now, there’s hope. You can make small changes over time that will give you great results in the long run! Don’t try to do everything at once, and give yourself great. It takes practice, and you’ll get better and better at it. Until one day, you’ll realize you are no longer bad with money at all!