Financial Problems are Temporary

Financial ProblemsIf things seem a bit tight or finances are weighing you down, you have to understand it will not always be this way.

I know firsthand. While in college, I made financial mistake after financial mistake.  If it wasn’t the mall calling my name, a night out with my girls, or just living beyond my means, I always found myself spending money I didn’t have. After graduating from college, it finally dawned on me; I had to make some financial changes.

The conversation I didn’t have

Just like many of us, before going away to college, my parents warned me about drugs, drinking, and other distractions that may get me off course. However, they failed to mention, the credit card representatives would be awaiting my arrival at the college’s recreation center.  Armed with free giveaways and t-shirts, I was instantly lured into the power of the plastic.

If you find yourself in financial distress, begin to educate yourself regarding personal finance. Get a basic understanding of financial issues, such as savings, credit card management, retirement planning and budgeting. More importantly, take time to understand what it takes to create a budget. Understanding the amount of money you earn and spend each month is key to getting your finances under control.

Do I really need those $200 jeans?

Pay attention to every dollar you spend. You have to understand, every dollar that comes into your possession has a purpose. But you must be willing to figure it out.

Yes, it may be a good idea to stay in the latest fashion, but if your bank account is suffering you may want to think twice. But don’t just stop at evaluating wants, but also review your monthly necessities to determine whether you should cut your expenses.

Set aside a few hours a month, or review your budget daily to evaluate each and every expense. Question whether you are able to cut expenses by shopping around for lower prices, maybe consider refinancing a home mortgage or determine whether each expense is a necessity.

Save, save and save

I don’t care if it is $20 or $200 per month, putting something aside is essential to reaching your financial goals. Back in my B.C. (before cash) days, I used all the little money I had on everything I could think of without saving for a rainy day!  Fortunately for me, I begin to seek wisdom, prayer and understanding about my finances and upon graduating got my finances in order.

More importantly, you never know what lies ahead.  Nothing taught me this lesson better than Hurricane Katrina.  Although I don’t believe any lesson could have prepared me for all that I was able to endure, but at the very least I had an emergency fund, which I utilized for the unexpected expenses that came as a result.

Keep your debt in check

While it may be necessary to obtain some debt, such as a mortgage, there is some debt you should try to stay away from.  But, if you if you have found yourself swimming in debt, create a reduction plan to make a way out.  Get creative.  Order your credit report for free at annualcreditreport.com and get serious about your debt.

Pick up the phone and contact each creditor. Make arrangements with each to reduce your debt going forward.  But more importantly, as you get out of debt, it is important you just say “no” to other debt on your financial journey.

Remember: your choice, your future!

Kemberley Washington is a certified public accountant and business professor who writes a personal finance blog at Kemberley.com. Follow her on Twitter and on Facebook.

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