Getting Back on Track with Your Finances

"I am ashamed to admit this but I was doing well with my finances for a few years, then all of a sudden things went sideways with my finances. It’s harder for me to maintain paying my bills, much less save and invest as I had in the past. Recently, I have had to use my credit card to pay for some personal needs such as groceries and gas. I do not want to get back into a downward financial spiral that I worked so hard to get out of. What should I do?"

Have you been there? I have been in this person's shoes more times than I care to admit.

Here are some things that I do to get back on track:

• Give yourself amnesty and forgiveness. Life happens. This can mean accidents, divorce, illness, injury, job loss, caring for loved ones, natural disasters, etc.

• Revisit your financial why and goals

• Evaluate what went well, what were you doing daily when everything went well. Also, consider what has been happening recently in your personal as well as the national economy. At the time of this writing inflation rates are at record highs, which has caused the price of goods and services to increase.

• Examine your:

  • Habits - Are you sticking to your monthly budget? Are you the financial savior of your family? Do you say yes and overextend your finances and rely on your credit card to pay for meals with family, friends, trips, everyday expenses, etc? If so, learning the power of “no” is helpful. Your true friends will understand and not make you feel bad about your decision. Some family and friends select a more budget friendly option. You may have to have an honest conversation with your family about where you are financially and direct them elsewhere for assistance.

  • Lifestyle - Do you have champagne taste but a tonic water budget? As my mentor Nicola Smith Jackson says, learn to master the crawl. This may mean getting a roommate, downsizing your home, automobile, cell phone plan, delaying trips and vacations, making a grocery list, shopping sales and clearance items, using coupons, etc. Learn delayed gratification.

  • Finances - are you earning enough income to pay your monthly expenses? If not, it may be time to ask for a raise, promotion or seek a higher paying position. You can also identify ways to earn additional income. Do you have a skill or hobby that can become a business? Something as simple as offering babysitting or dog walking services to your neighbors, coworkers and friends can yield additional income.

  • Ability to pay your bills - are you paying your bills on time or are you paying late fees? Late fees eat away at your finances that could be allocated somewhere else. Contact your creditors to find out what options are available. Most companies have the option of automatic bill pay. Just make sure you have the funds in your bank account on the payment draft date. In addition, some mortgage companies allow homeowners to make two biweekly payments instead of one monthly payment. Consider if paying annual premiums for home, auto and life insurance is more cost effective than making monthly payments. Furthermore, enroll in budget billing with your utility company if available. Consider shopping around or switching your home internet and cell phone providers. Discuss opportunities to bundle services such as home, auto and life insurance; as well as home internet and cell phone service if available in your area. If you are active duty military, a veteran, senior, student or employee of certain companies, you may be entitled to discounts. You never know unless you ask your providers.

• Ask for help and be willing to take immediate action

  • There are numerous individuals and organizations that offer free or low cost financial services. Many offer free consultations. Asking for help from a professional is not a sign of weakness but rather a sign of strength. This is the powerful first step to get back on track with your finances. By talking to someone about your situation, she may be able to offer solutions and resources that you would not have known about had you stayed silent.