You survived the holidays. You’ve tossed or stored the decorations and reordered your space (and your life) to January normal. The last reminders of celebration are the credit card bills that rolled in on schedule. If your New Year’s resolution was to be more financially responsible, this arrival might have seemed more like a January 1 hangover—and the world seems bleak.
If this sounds familiar in any way, you are not alone. If this seems normal, then the time has come to question the sanity of this annual routine that drop-kicks you into money misery. Whatever lofty goals you set on January 1 have been supplanted by the urgency to deal with bills that are neither comfortable nor in alignment with your plans for financial success.
Your choice now is to feel miserable and remorseful about those poor decisions OR (waaaaay better) to channel that energy into a positive plan to create a new and better reality. If you haven’t clicked off by now, you probably are interested in finding a constructive solution to a more satisfying financial life.
But where to start?
The answer is simple: a change is necessary—from your mindset to your actions. Say it out loud: “I have to make a change!” There, you didn’t die from saying it and chances are you will be able to navigate change without costing you a limb or an essential organ. So let’s start these seven steps to back away from financial failure:
- Acknowledge—right upfront—that change doesn’t come easy. There is some level of pain involved. But let’s be honest, how pain-free is that January credit card bill? Yeah…right?
- Create a goal that would make you feel good, satisfied and proud. For example: “My goal is to be credit card debt-free.” It’s your goal, so name it. In fact, write it down. Your words have power.
- Look at your numbers. Let’s start with something easy—grab your last few bank statements and list the amounts deposited vs. the amounts spent. Now, let’s go a little deeper. Pull out your fixed costs—whatever you are contractually liable to pay each month (rent, mortgage, car payments, etc.) Whatever is leftover is a mix of discretionary or partially discretionary spending.
- Go back to your goal. What is it? Why is it important? Is it important enough to make some shifts in your spending? Is living in money misery acceptable?
- Now, come back to your numbers. What can you stop doing? What can you shift in order to create the surplus necessary to pay off your credit cards or move you closer to your goal each and every day, week, month. Remember, it’s a matter of mindset and the steps you create to reach your goals.
- Test your results. If you are saving $100 per week, are you paying off an additional $100 per week on your balances? Chart your progress. If you change your spending habits and replace them with savings habits, you should see, in very short order, the results clearly stated in your bank account.
- Celebrate your victories and learn from your missteps. If you have a lifetime of less than stellar money habits, don’t expect miracles or overnight solutions. Being mindful of your decisions and going back to your goals will keep reinforcing why you are making these efforts. It’s worth it.
Imagine yourself, a year from now when the January bills roll in. They are manageable and within reason. You feel good about yourself, your progress and the decisions you’ve made to put you into this more favorable position.
Just think, it seems like only yesterday when you were hyperventilating and now you are feeling the peace and happiness of a life in control. Go for it—your happiness is worth it!