As you manage your finances, you will encounter financial problems along the way that will test your mettle if you will cave in or conquer the problem. There are different types of money problems ranging from the seemingly harmless busted light bulb to the more serious job loss or your bank will soon take your house for non-payment of mortgage loan.
Now you might be quick to point out that the number one reason why you have problems with your finances is that you lack the funds to support your expenses. When you take a look at your household budget, your expenses far outnumbers your income just like in the movies where the good guys seems to be surrounded by the bad guys, the good guys seems to always win at the end.
This simply means that there is always a way out of your financial problems regardless how small or big or life changing they are. There are times that you feel that you just want to give up and throw in the towel. You would always say to yourself that if only you had a bigger paycheck or more funds in your bank account, you would be able to withstand any problems that come your way.
But sadly, having money is just one part of the solution. Take for example some of the stories of lottery winners and even athletes who all had millions in their accounts. Some of them are now broke and all wondering where did all that money go. For some. having that much money was a curse while some did not really know what to do with the money.
USAToday.com shares that one of the top financial problems of Americans is trying to make ends meet. That is one of the simplest daily task that you need to be able to accomplish yet a lot of consumers are having trouble getting their paychecks to meet up every month. It is as if the two were ex-lover who does not want to see each other.
Reasons why people get into financial trouble
Apart from not having enough money in the budget, there are other reason for financial problems in a consumer’s daily life. Here are some of them and it might benefit you to know them to spot and correct them immediately as you go along.
- Not having financial knowledge. Financial literacy is a problem with America’s youth and if they start with not much knowledge about finances, they will be having an even tougher time when they grow up and need to manage finances of their own. This is a real problem with grown-ups with some trying to grasp the idea behind a household budget to some believing that extra funds on one particular month means they can get that new car. You do not have to take finance class, although that is totally not out of the question. But you just need to get the basics and apply it your financial management.
- Thinking there is no time to learn. This is just not true and if it is important to you, you will always find a way. You might say that in between a nine to five job and house chores you do not have enough time to sit down and learn how to manage and solve financial problems. Buy a book about financial management and read a few pages before you doze off at night. Bring it to the office and try to squeeze in a few pages during your break time. You can also read the book or even listen to a podcast in between your commute to and from work to learn as much as you can in handling your money.
- Your ego gets in the way. Your ego can get in the way of a lot of things and one of them are your finances. You might think that you really do not need to know how to handle money because you have a lot of them. Sometimes this is also how some people think when they do not have much resources and do not understand the need to manage such a small amount. You should feel that there is no need to manage your money because you are a know-it-all and the thought of sitting down and talking about budgeting makes you feel old. If your ego gets in the way of money management, you will not have an idea what happened to your money in a few month’s time.
- You avoid money because of its complexity. The first thing that comes to your mind when you think of money is how complicated it can be. With that thought lingering in your head, you start to repel any thought of managing your money because you already programmed your head that it is hard to understand. Do not be afraid of something you do not know much about because you can always find a way to learn about it if you put enough effort into it.
- Trouble trusting other people. Kens5.com shared how NBA superstar Tim Duncan brought his finance manager to court for mishandling and siphoning off millions of his hard-earned money into dubious transactions. This is one of the fears of consumers and it is a valid point. One thing you can do to work around this is to research as much as you can about the person or company handling your money but never leave them to do all the work. You have to be as much a part of the decisions made on your account because that is your money to begin with.
- Lack of objectivity in money management. Your emotions can do a number on you and how you manage your finances. Make sure to hold off important money decisions if you are very happy or down on your luck. You tend to make knee-jerk decisions that spells trouble in the long run.
How to get out of financial problems
If you are already experiencing trouble with your finances, here are a few things that you can do to get yourself out of trouble.
- Get your budget in order. It is hard to meet debt payment in your household budget when you do not have an idea if you have the money to pay for them. The first step is organize your budget to see how you can balance your income and expenses and where you need to necessary changes.
- Learn as much as you can about money management. Money management can include a lot of topics such as spending, budgeting and even investing according to Investopedia.com. That seems a lot but you just need to take it one step a time or one topic at a time for money management to make sense.
- Proceed with caution. This is really important especially when you are making big financial decisions. Think over your decisions more than once especially if your gut is telling you that you are making a mistake. You need to be able to make informed financial decisions and not the emotionally-charged ones.
Financial problems will happen and will hit you sometimes when you least expect it. You just need to know the problem and find ways to fix it rather than run away from it.