There are ways to feel more confident about your money, even when your finances aren't going your way. Most of us have plans for our life. Maybe we want to start our own business, build a large emergency fund or have plenty tucked away for retirement. But oftentimes, things don't go according to plan. Setbacks can take you off track. But even if this happens, there are ways to feel more confident about your money.
1. Create a Strategy to Pay down Debt
Paying down debt is one of the best ways to feel more confident about your money. Even if it takes several years to knock down balances, the fact that you're making headway can boost your confidence and give you the power to continue. Stop using your credit cards and adopt a cash-only system. Negotiate a lower interest rate with your creditors, and start paying more than your minimum payments each month.
2. Start Saving for Retirement
The earlier you plan for retirement, the better. If you're in your 30s or 40s and you haven't started saving, you might fear not having enough once you leave the workforce. The truth of the matter is, it's never too late to start. Talk to your employer about enrolling in a 401(k) plan, and speak with a banker about starting an individual retirement account. Contribute the max you can to your retirement accounts each year to play catch-up.
3. Resolve to Increase Your Emergency Fund
It's sad, but many people are just one paycheck away from living on the street. If you don't think you can survive a financial disaster, develop a strategy to increase your emergency fund. Start depositing 10% of your paycheck into a savings account. Reduce expenses to free up cash for saving. And when you get free money, such as a tax refund or a work bonus, put this money into your savings account.
4. Get Another Income Stream
Don't rely solely on your job for income. Because in all likelihood your job isn't enough to cover all your expenses and build your savings account. Get creative and brainstorm ways to generate extra cash. You can buy and resell items on the Internet, freelance, get a part-time job after work and so forth.
5. Don't Rely Solely on Others
If you want to feel more confident about your money, make sure you're earning your own income. Even if you're married and you're not required to work by your spouse, it doesn't hurt to have a side business or hustle that lets you build your own savings account and establish your own credit history. Honestly, you never know when you're going to have to handle your own finances. If your partner loses his or her income, your income can help cover some of the family's finances until he finds another job.
6. Get Insurances
To feel more confident about your money, make sure you have adequate insurance. This includes health insurance to avoid a hefty medical bill, as well as renter's insurance, disability insurance and life insurance. Don't think that life insurance is only for breadwinners or parents. Even if you're single, a life insurance policy can provide funds to pay off your debt if you die, plus it can cover your funeral expenses.
7. Remember Your Accomplishments
It's easy for us to focus on the negative and push aside any positive things about our finances. But even if you've made a lot of mistakes, you probably made some smart choices as well. Don't beat yourself up. Everyone makes mistakes.
No matter what's happened in your financial world, you can bounce back and overcome issues. It might take time, and you'll need an effective plan, but it's not impossible. What are other ways to feel more confident about your money?