Tough times mean tough measures

I recently spent some time in email conversation with one of our subscribers who was excited to join us on the recent Financial Priorities teleseminar.  She was excited to learn more and valued the input… but she was scared their current circumstances would continue to limit their ability to move forward.

Listen to these words from her email, she’s graciously allowed me to share them with you;

  • How do we overcome the bewilderment of not having enough?
  • … it feels like a mouse on a rotating wheel…
  • I have a habit of forward spending.
  • Debt here there and everywhere – so overwhelming.
  • at the moment I am dreading the mail coming because its another reminder statement for another bill….
  • Holy moly…

This was clearly a cry for help, and one I’m happy to say has led to some significant progress.

Sometimes you have to go backwards to go forwards

As I worked through a suggested process I was careful to present options that were realistic.  I have helped hundreds of families in situations like this over the years and I know how “hope-less” it can feel to be in a situation that makes you feel like this person did.

The reality is our unhealthy finances are caused by choices we’ve made in the circumstances we face.  When we respond to hard times with pig-headed determination we can hinder the help we’re seeking.  Sometimes you have to go backwards to go forwards.  That may mean selling a car you’ve borrowed money to buy.  It may mean taking a second job for a while to get enough income to smash your debt.  You may even need to forgo some of the luxuries you’re used to in order to make financial progress.

Sometimes fixed costs are too high

Another phrase in the email I received caught my attention;  “food is a luxury in the budget.”  This is a shocking reality for many families, you only have to explore the “food in schools” news items to see how real this issue is.  (Let’s agree not to argue about the merits of this Government proposed plan today – once I get started I won’t stop!)

I believe not being able to afford food is a strong signal that fixed expenses are taking too much as a percentage of household income.  A recent news item shared the struggle of an Auckland family who were living in one room and struggling with $100 per week for food.  There was no “extras” at all for this family.  The reality of their situation (as I could understand from reading online) was they had no way to further cut their expenses.  The answer:  get more income.  Fortunately for this guy his publicity on national TV helped secure him more work with his employer!

If you are struggling to meet your basic living costs it is vital you challenge every single expense in your bank account to see if there is anything you can chop out.  If you say there’s no more room for chopping, then it’s time to find more income.

Finally, get a plan to eradicate debt

I find in many cases the reason money is tight is due largely to the amount of income that has to go towards paying debts.  High interest loans or over-sized mortgages are the reason many families spend hundred of dollars each week paying their debts.  Fix this and you fix many of your problems.

I shared a simple strategy in my recent email conversation that has helped many, many people to smash their debt.  You, too, can become a Debt Terminator!  (You’ll find this plan in chapter 17 of my book, Becoming Money Wise – it works!)

I’m pleased to report my willing student has created her own personal Debt Termination Plan.  As she faithfully sticks with the plan she has created she will see her debts fall off one by one.  And that, my friends, is how you get yourself out of trouble.

 

In closing, there will be some of you reading this and feeling like you don;t have a problem.  That’s awesome.  Others, well you’re possibly feeling like you need to take some time to focus on your money and make the hard calls necessary to get yourself back on track.  Don’t delay, get started today.  There are plenty of resources here to help you.

Posted in Financial Education