What if the thought of untangling your finances makes you feel overwhelmed?
You are not alone. About 70% of Brits feel stressed and overwhelmed when thinking about their personal finances. This can stem from negative past experiences, an underlying fear of maths, uncontrollable debt. The list goes on.
The issue here is the feeling that you are not in control and the belief that you are unable to fix the situation. But this is untrue. What you should realise is that these are feelings, not fact. The feeling of fear causes the overwhelm and paralyses you from taking action to fix the situation.
Steps to deal with financial overwhelm
The first step requires you to focus on your mind. After accepting that the overwhelm is a feeling you can overcome, you need to work on developing a positive mindset. The key element to improving your finances is by first believing that you can. You must identify when you start to think negatively and doubt your ability, and stop these thoughts in their tracks.
Visualise what you are seeking to achieve. Be detailed with your mental imagery, then write it down. Do you want to clear all your debt? Do you want to have saved an emergency fund? Clearly and confidently document what you want and believe it. Just like when you were a toddler and you were determined to walk, use a fork, put on a vest, believe in yourself wholeheartedly.
Identify the ‘now, never, later’
Here we get into the nitty gritty of the situation you are in. Write down on one piece of paper all the issues that are a cause for concern. Keep the sentences short, detail is not required here. Next, you want to categorise each item as one of the following:
Never: these items are outside of your control and you should discard them. Accept that you cannot control everything, and if something is a lost cause, let it go. For example: your washing machine has broken down and you can't afford the replacement, you must accept using the launderette for now.
Later: allocate the items that are not urgent and can be dealt with later. Write down the date that you plan to deal with each of these items. Alternatively, identify those that can be delegated to someone else such as a partner or other family member. Don’t be afraid of seeking help from those close to you. For example your partner could sort the renewal of your car insurance.
Now: these are the pressing items that must be dealt with immediately. Prioritise these and make time to deal with them as soon as possible.
You should now be left with a smaller list of things to sort. Hopefully, seeing the items categorised into more manageable chunks brings about optimism and confidence in your ability to sort your finances. You want to make time to deal with them in the order of importance you detailed above.
Prepare for success
Don’t stop there! Make taking responsible steps to improve your finances a habit and begin to build a strong foundation for a secure financial future. Set aside a time every week to look at your finances and check you know where your money is going. Review your spending habits, then create a budget to manage your activity.
Finally, do not hesitate to seek help if you are unsure. This could be an accountability partner to help you through this difficult stage. Or if you need someone with expertise seek a financial expert, or debt adviser.