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Do You Have a Toxic Relationship With Money? 6 Ways to Tell

Do You Have a Toxic Relationship With Money? 6 Ways to Tell

Having a toxic relationship with money can cause you to struggle more than you have too. Most of us develop their attitude toward money earlier in life, you may not even realize the destructive thoughts and feelings you have toward money. The sooner you can identify trouble in your financial relationship, the sooner you can work toward having a healthier attitude towards money and begin to repair your finances.

You’re always broke.

Sometimes you may genuinely not have enough money to pay all your expenses. It’s one thing you’re living on a barebones budget and you barely make enough money to pay all your bills. It’s another when you’re constantly broke because you overspend and you’re not trying to control what you spend each month. Or if you refuse to do anything to make more money or cut your expenses.

You think money doesn’t matter.

Of course, money isn’t everything. You should never make money the center of your life or the driving before behind how you live your life. In a healthy financial relationship, you understand that money is simply a currency - a medium of exchange. You receive money for what you provide to others. And give it to others for what they can provide you. It matters because it’s necessary for life’s basics.

You diss people who have money.

It’s one thing to hate a system that supports unequal pay between genders or races. It’s another thing to hate on people who have money simply because they have it. Whether they worked hard or they inherited from someone else’s hard work, it makes no difference for you. Repairing your relationship with money means acknowledging where you are in life and drawing motivation and inspiration from people you look up to.

You think winning the lottery (or getting some other large sum of money) will solve your problems.

You’d be surprised to find out just how many lottery winners end up going broke. Or how many people who’ve inherited a fortune end up squandering it before they can pass it down to the next generation. Lots of people think they wouldn’t end up in that situation, but as soon as they get a little extra change, they blow it. Getting a lot of money won’t change your life if you don’t have the foundation in place to properly handle money. The same way you blow a $5,000 tax refund, is the same way you’d blow a $5 million lottery winning.

You don’t make any plans for your money.

You should tell your money where it’s going, not the other way around. Having a frivolous attitude toward money prevents you from making serious plans about your financial future. You may spend more than you should and end up saving less than you should. It’s important to set both short- and long-term goals for your money, then put a plan in place to make sure you’re going to meet them.

You’re scared at the thought of making more money.

You can get stuck in a cycle of struggling because it’s what you’re comfortable doing. Despite the fact that it’s scary and painful at times, if this is how you’ve always lived your life, struggle is simply what you’re familiar with. And human nature causes us to seek out the unfamiliar. Making more money isn’t a bad thing, but can be terrifying if you’ve never made a lot of money before. You might fear something bad will happen to you. Or that people will look at you differently. Having more money can provide you with security for months and years to come, if you’re responsible with the money you earn. And long-term security is the true comfort in life.

 

5 Important Steps to Take When You’re Overwhelmed With Bills

5 Important Steps to Take When You’re Overwhelmed With Bills

Being responsible for bills every month is a level of adulting we weren’t all prepared for. If you’re not careful, the number of bills you’re responsible for each month can creep up on you. You sign up for services and subscriptions one by one, until suddenly you’re having to dip into savings or use your credit card to pay for everything.

It’s a dangerous way to live. You’re one emergency away from spiraling out of control. The moment you notice your bills are getting too high, you have to make a change, otherwise, you might have to fix some real damage.

Start by figuring out what exactly you’re paying each month.

Go through all your bills and your credit card and bank statements to figure out what you’re paying each month. Make a list of all the bills and the amount of each. This digging can be tedious and can take a few hours, but you might see a few expenses you didn’t realize you were paying.

Decide whether each expense is necessary.

Now comes the hard part. Being real with yourself about what you should be paying for and what can go. Some things are obvious - you have to pay utilities and probably your cell phone bill. But there may be some expenses that are questionable, especially the subscriptions. Do you need the gym membership? Netflix and Hulu? Spotify and Apple Music?

Of course, you can justify keeping any of those bills. But, when you’re swimming in bills, you have to get rid of something so you can keep your head above water. Make the tough decisions about which bills you can cancel.

Make a plan to catch up.

If you have any bills that you’re behind on, highlight those so you can work toward getting caught up again fast. Prioritize bills that will cost you the most. For example, if you’re behind on your rent or mortgage, catch up on your housing expenses first to avoid becoming evicted or foreclosure. Work toward catching up on past due credit card bills so they won’t get charged-off and damage your credit.

When you can’t quite afford to catch up right away, you should talk to your creditors right away to see if you can make payment arrangement to bring your account back current again.

Set aside some bills to pay off.

Another way to get rid of a bill completely is to pay it off faster, this is especially true when it comes to credit card bills. Once you start cancelling some of your other bills and services, you’ll free up some extra money that you can put toward paying off your credit card balances faster.

Pick up some overtime, part-time work, or a side hustle to make more money.

You don’t want to have to bring in extra income just to afford your basic living expenses, but temporary side work can help you at least get caught up on your bills. Once you have everything under control, you can decide whether you want to keep working so you can build up your savings account or pay off some of your other debt.

10 Small Financial Moves That Are Still Major Wins

10 Small Financial Moves That Are Still Major Wins

When you scroll through social media and see pictures of people buying their dreams homes, picking up a luxury vehicle from the car lot, or spending money on a lavish international vacation it’s easy to feel like you’re behind. That’s one of the downsides of social media - we can feel like we’re not doing enough when in reality, even the small things are major.

Saving your first $1,000. Having enough discipline to save up $1,000 isn’t easy, especially if you’ve never had a consistent saving habit before. And when you consider that 58% of Americans have less than $1,000 in the bank, you’re doing pretty good to get your savings account up to four figures. Pat yourself on the back and get started on your next goal.

Going six months or more without paying an overdraft fee. Americans paid $54 billion in overdraft fees last year. If you’ve over drafted once, you’re more likely to overdraft again. Getting the hang of managing your money and avoiding overdraft fees is worth celebrating.

Gaining credit score points. Raising your credit score is hard work. It takes patience, time, and dedication. It’s a good feeling seeing your credit score going up. Even if your credit score goes from 535 to 570, you’re still making progress. Keep up the good work and you’ll have more credit score gains to celebrate.

Paying off a credit card. When you pay just the minimum on your credit card, your balance will barely budge. You have to pay a large lump sum to your credit card each month to see real progress on your credit card balance. If you’ve been making sacrifices to pay more on your credit card and finally see zero balance, congratulations are in order.

Doing a full credit report check. You can keep up with most of your credit information by using an app like Credit Karma. Still, it doesn’t give you the full picture. At least once a year, you should order all three of your full credit reports and review each item to make sure all the information is accurate. You can get one free copy each year through AnnualCreditReport.com.

Buying your first stock. Millions of Americans aren’t investing in the stock market and young adults are less likely to invest in stocks. Microinvesting apps like Acorns and Robinhood make it easier than ever to invest in stocks at a low cost. There’s risk involved in any investment, stocks included. If you’ve read up on the stock market, decided you want to invest, and finally chosen a stock you think will do well, kudos to you. Investing in your first stock is a huge step.

Staying in your car after it’s paid off. Paying off your car loan is a major step. Many people go right out and buy another new car and never miss the money since they were used to a car payment anyway. If you can hold off on buying a new car for another year or two, you can put the amount of your car payment toward another goal like paying off other debt or saving money.

Making your own coffee, taking your own lunch, or eating leftovers. Eating out is one the biggest expenses for many people. Whether it’s Starbucks or a local coffee shop, that morning coffee just feels so good, but you save so much money by making your own coffee at home. Even if it means investing in an automatic coffee maker. Choosing to save money over convenience is a major step in financial maturity.

Keeping your credit card balance low. The temptation to run up a big credit card balance is too real. But, having a high credit card balance can hurt your credit score and can be tough to pay off. For a good credit score, it’s best to keep your credit card balance below 30% of the credit limit. That’s a $300 balance on a credit card with a $1,000 limit. Having enough self-control to keep a low credit card balance is a major win.

Reading a book on money. You don’t have to stop reading just because you’re no longer in school. If you want a good lesson on finances, pick up a personal finance book. They’re not always the most exciting to read, but you’ll learn a lot about managing money and can start to undo some of the bad financial habits you picked up over the years.

Being good with money isn’t about one big accomplishment, it’s about all the small decisions that you make everyday. Those good choices add up in major ways.