We all encounter obstacles, both in our personal finances as well as our personal growth. So trust me when I say it’s perfectly fine and normal to have setback or delays. However, how you react to those obstacles is what will set you apart and it could potentially be the thing that makes or break you. If you don’t already know how, it’s important to learn how to bounce back – quickly. If you can go with the flow and come back from problems stronger than before, you’ll end up doing well. With all of that being said, let’s get into 10 ways to revitalize your finances even when you encounter huge obstacles or setbacks.
1. Write Down Your Goals
The first thing you need to do is to write down some solid goals. It requires some introspection, to be sure. Be ready to sit down, have a cup of coffee, and really consider where you want to be.
When you’ve decided on that, use the SMART system to set goals. If you don’t know about it, it’s an effective way to set goals in a way that makes them easier to follow. SMART goals are specific, measurable, attainable, relevant, and time-bound. When you set your goals, make sure you include all of those traits. If you do, you’ll set some strong goals that give you a bit of a roadmap to follow so you can stay on course.
2. Look Over Your Expenses And Make A Budget If You Don’t Have One
Now that you know your financial goals, it’s good to take inventory. Go over your expenses from the past month and see areas you’re having some trouble. The big three categories for a lot of people are housing, transportation, and food. Usually you can cut at least one of those enough to help you get back on track as they tend to be the largest expenses. After you’ve cut those expenses, if you still have problems, make sure you don’t have some other spending issue. If part of the problem is that you need to make more money, do your best to find ways to increase your income.
If you don’t have a budget yet, check out my guide for beginners. For those who already have one, make sure you’re not missing anything. Alternatively, try a zero-based budget if you’re having problems and see if that works better for you.
3. Make Paying Yourself The Priority – And Automatic
I hope this goes without saying, but you need to invest in your future. Ever hear of the saying “pay yourself first?” Well, it’s important. To learn how to invest, you can use my guide to start investing in index funds. All you really need to know is that there are brokerages like M1 Finance that make it easier than ever to get started. Just put some money into index funds or ETFs that have low-fees and watch you investments grow over time. Of course, investing should be a strategy for long-term results. In other words, short-term results will vary.
If possible, try to set up automatic investments. That way you don’t have to micromanage it and can just sit back as you automatically invest every single month. This makes it easier for you to stay consistent and gives you less work to manage your finances on a routine basis.
4. Eliminate Debt
Not all debt is horrible. For example, a mortgage may not be the highest priority. Alternatively, debt with super low interest rates may not be a particular concern for you. However, any high-interest debt you have needs to be your priority. As a general rule of thumb, if it is over 5% it probably needs to go as soon as possible. If you’re trying to recover financially, and you have a mountain of debt to get rid of, that should definitely be your first priority. Eliminating your debt will make your financial health much more stable. If you don’t know how to start, try the snowball method.
5. Be Okay With Spending On Yourself Sometimes
Despite popular belief, it’s okay to spend money on yourself occasionally. In fact, I would argue that sometimes it is crucial to spend a little on yourself. Now, don’t get the wrong idea. If you can cut back, you should. It all really comes down to the psychology behind personal finance. If you deprive yourself of fun and don’t spend anything, most people will end up doing at least one of the following:
- Reach a breaking point and spending a lot.
- Justify massive splurging because they’ve been frugal, even though splurging sets them back even further.
- Feel like they’re moving too slowly and give up entirely.
Don’t let that be you. Be as aggressive with your finances as you want, be remember that it’s okay to not be perfect.
6. Meet Your Needs, But Prioritize Your Wants Accordingly
When you create a budget, you definitely need to make sure your needs are met. That isn’t something to skimp out on. However, you may not have the luxury of getting all of your wants. When it comes to things you want, but don’t need, give them a priority. For example, a Netflix subscription might be more important to you than Starbucks a few times a week or vice versa. Make sure you know which things you prefer or want more, and be ready to choose them if need be.
As I said in the previous point, it is okay to have wants and things you spend money on. The problem comes when you spend far too much money and can’t sustain it. Many people have a vice, but don’t let it control you.
7. Simplify Your Finances And Close Accounts
In general I’m a fan of keeping it simple, but especially when it comes to personal finance. The simpler your finances are, the easier it is to maintain and monitor them. The easier it is to maintain them, the more consistent you’ll be. So, keeping it simple tends to yield a lot more results than most people expect. Don’t overcomplicate your budget or get caught up in too many fancy financial tools. I use a spreadsheet and Personal Capital for all of my routine personal finance needs. Another thing that may be worthwhile is closing out some accounts if you have too many to manage easily.
If you want access to my free budget template and financial goals worksheet, sign up for the newsletter (I send them out in the welcome email)!
8. Make An Estate Plan
This may sound odd since the focus is revitalizing your finances, but it is still a good addition to the list. Making an estate plan sets you up in the worst case scenario, so that there are no issues after you pass. On top of that, it gives you a clear insight into the current state of your finances and can give you a good idea about where you need to end up. So, if you’re having issues figuring out goals this is another thing that can help you with that!
9. Prepare A Menu And Buy In Bulk Instead Of Eating Out
Buying in bulk is a huge hack for your finances. It costs more in the moment, but it ends up saving you tons. Of course, the first step is making sure you reduce how much you’re eating out. Eating out is one of the three biggest expenses (that I mentioned earlier) that you can cut to save huge amounts of money. Meal planning and buying in bulk just make it easier for you to actually cut that expense and save some money.
10. Use Your Benefits
If you have a 9-5, use your employee benefits! They’re part of your base compensation package, so you should use them. You don’t feel guilty about your base pay – in fact you probably think you should get paid more. So, why does everyone feel so much guilt for actually using the benefits their employer gives them? Consider it part of your pay – because it is. Use it, enjoy it, and it can help your life be more stable, while potentially cutting some expenses.
Conclusion
I hope this helped give you some direction for revitalizing your finances. If you have any tips of your own, or a question, be sure to leave a comment. For those of you who want to stay up to date on Bitter to Richer content, or to get a free copy of my budgeting template and goals worksheet, be sure to sign up for the newsletter.
