Financial stress is pervasive in the United States today and it touches every single family in some form or fashion. We need it to exist, and we interact with it every single day.
Why are we stressed about money? Things aren’t so great out there.
- In a recent CNBC survey, 90% of respondents said that money impacts their stress level.
- 64% of Americans were living paycheck to paycheck at the end of 2022.
- Collectively, we owe $17 Trillion (yep, with a “T”) in debt when you add up all U.S. households. As a nation, we’re kinda broke.
- Money problems plague marriages and are one of the leading causes of divorce. Check out some of these bizarre statistics.
- The cost of everyday items, from meat to bread to milk, has skyrocketed by just under 30% over the past five years alone.
- Let’s talk housing. The median price for a home has risen to $400,000 and the average cost of rent in the U.S. is $2,000. That’s simply out of reach for most families.
There’s a reason that we’re all feeling the pinch of money stress right now. As a dad, entrepreneur, creative professional and personal finance coach, I know there are steps we can take to chart a better path with money going forward. Here are 11 ways to improve our relationship with money, whether you make $100,000 or $25,000.
Before we get into it, remember. The path to prosperity isn’t (all about) how much you make. It’s what you do with the money you do have. If you want to provide for your family (today or in the future), that starts by living below your means, saving/investing the difference and doing this over a long period of time.
There is a baseline amount of money that we need to make to be able to make ends meet and you can’t budget your way out of poverty. So, let’s talk about how you can tackle both sides of the financial coin.
1. Be Honest with Yourself.
I grew up without a lot of resources and developed a scarcity mindset early on. It’s stuck with me even today, but once I realized that money doesn’t define me, I got a lot more confident and finally got control over it! So, acknowledge that you might not have a great relationship with money, and that’s okay.
2. You Are Here.
The first and best way to get a handle on your finances is to know where you are. “I’m broke, Greg. That’s where I am.” If you’ve never done this before, it’ll be transformative (and probably a little depressing).
Go into all the places where you spend money (bank accounts, credit cards, digital payment platforms, etc.) and track your expenses for 90 days. Not only will you know how much you spent, but you’ll be able to figure out what you spent it on.
And this is where the change begins. What are your weak spots? Where are the leaky pipes in your financial life? For my fam, it’s eating out and ordering too many “must-haves ” on Amazon.
Pro tip: Want to skip the line and do this one faster? Sign up for a budgeting service like Every Dollar, YNAB, Good Budget or Mint, hook up all your bank, credit, etc. accounts. It’ll help you categorize all your transactions for you. Here’s a list with these and others.
3. Set Some Goals.
If you’re ready to make some changes, aim high. Set some goals for your finances that can be your north star as you work through things. Examples might be: “I want to save $1,000 by December 24,” “I set aside $8,000 to buy a new (to me) car,” or “I want to pay off $X,XXX in high-interest credit card debt.” Whatever your goals are, write them down and put them somewhere where you’ll see them every day.
4. Get on a Budget.
I don’t care if it’s written down, typed out or tattooed to your lower thigh… Get on a budget. This is the single greatest gift you can give yourself and your family.
Take your take-home pay (pay after taxes) and play the “match up” game with those major spending categories you identified above. Start with the essentials like food, shelter and electricity and work your way down to your lowest priorities.
Cheat Code: Looking for a simple framework for budgeting? Try this from Dave Ramsey.
5. Cut The Fat.
So, chances are that if you got into your budgeting process, you’ve probably run out of money far before you ran out of spending categories. That means you have more going out than you have coming in. That’s trouble. And that’s the goal of this piece of advice. Get your budget to zero.
If you can’t make ends meet, you need to figure out how to cut some costs. And I don’t care how lean you think you’re living, I’ve never worked with a client who couldn’t find a little fat to trim.
What are good places to explore and maybe limit? Cancel subscriptions, see if you can save on big expenses like car insurance, eat out less, try to cut back on late fees and adjust payment schedules so your bills are spread throughout the month.
6. Build An Emergency Fund.
Having an emergency fund is a good idea so that an inconvenience like a blown tire doesn’t spiral into something much worse. It can be as little as $500 to get you started, but ideally, you want to get to 1-3 months of expenses set aside. We all need a little financial cushion in life… because it is a guarantee that something will go wrong when you least expect it. Be prepared.
Bonus: Set up a simple automatic transfer from your checking to your savings every month, even if it’s just $50. It’s a muscle you need to start flexing.
7. Destroy Debt.
Listen. I’m not going to lie. I hate debt. There’s some good debt (on houses, the right education, etc). But, with the average credit card interest rate sitting at 20.5% and some cards over 25%, if you have high-interest debt, you will never get ahead until you get it out of your life.
So, make a plan (in your budget) to chip away at your debt. Once you have a balanced budget, make it public enemy no. 1. Attack it with a vengeance. List out your debts, smallest to largest, and list out the interest rates for each.
Then, start tackling the highest interest-rate debt first. Get a bonus? Put it on the debt. Pick up some extra hours? Put it on the debt. Find some extra savings from cost-cutting? Reallocate to the debt.
It will take time, but every time you knock out a debt, that gives you just a little extra money for the next one. Before you know it, you have a snowball of debt repayment happening and you’re on your way to being debt free.
Level Up: Want to learn more about Debt Snowball vs. Debt Avalanche? Check out this article.
8. Get Your Income Up.
I know this can be a really tough one for busy working parents. But, there are so many ways to earn extra income in your spare time. Do a garage sale. Get a side hustle delivering food. Ask for extra hours at work. Do anything you can to get your income up. But make sure that extra money is going to something that’ll move the needle, like getting out of debt or building an emergency fund. Here are some resources to explore:
- Upwork, Fiverr, Freelance.com, and Guru: These marketplaces can help you find clients for your skills.
- Etsy, eBay, Big Cartel, and Amazon: These platforms can help you sell your products online.
- Care.com: You can find gigs for child care, housekeeping, tutoring, or pet sitting.
- Rover: You can find pet sitting and dog walking jobs in your area.
- TaskRabbit: You can get paid for performing tasks for people in your community.
- Nextdoor: You can sell things and find paid gigs in your area.
- SolidGigs: You can find gigs if you have advanced digital marketing, web design, or graphic design skills.
- Urbansitter: You can find babysitting and nannying opportunities near you.
9. Find Your People.
Remember. If you’re feeling it, then everyone else is too. If you’re committed to getting better with money, consider starting a support/accountability group of others who share your desire to do better. There is great strength in numbers.
Connect with your local church community, a Facebook group or talk to your friends to form your own group. Thousands of people are just like you trying to figure this out.
10. Don’t Give Up.
You will screw things up (I certainly have). You will fall off the wagon.Just like everything else in life that’s worth doing, you and your family are worth being financially healthy and strong.
So, no matter what happens, cast a vision for your life and continue walking towards that vision, even when the world knocks you down. You can do this!
11. Get Help.
There are a lot of free and low-cost options to help you get into a better place financially. From Employee Assistance Programs at your work, to free credit counseling, to cost-effective therapy options on FindHelp or online counseling with Better Help… You have a lot of options if you’re committed to improving your relationship with money.
Looking For Some Other Resources?
Still not able to make ends meet? SC Parents has a ton of resources that you can tap into, from rent assistance to assistance with childcare and loan forgiveness. Before you throw in the towel, check out the finances & employment section and explore resources near you.
