Financial overwhelm is hard. It’s when you’ve hit a point where the financial to do list is too long, you’ve made a few bad calls, and you’re not sure where to go from here. Anybody would be overwhelmed in that situation – you’re not alone!
Whether you’re dealing with the stress of gigantic student loan balances, or you’re flustered by retirement planning and investment options – financial overwhelm can be a very real, very paralyzing thing. The thing is, life gets busy. Our financial “to do” list continues to grow, even when we put it on the back burner. Money is easy to spend, and it becomes increasingly more difficult to make good financial decisions the busier we get.
The best thing you can do for yourself when you start to feel overwhelmed about your personal finances is hit the pause button. Take a step back and breathe. Rather than trying ten new budgeting tactics simultaneously, setting a billion “micro goals” in regard to your money, and adding things to your already full plate – stop. You need to make space for yourself to slow down and think things through.
We live in a world where it’s easy to over-clutter our financial lives. There are so many different apps you can use, podcasts you can tune in to, and blogs you can read – each touting a different money strategy to grow your wealth, pay down debt, etc.
Instead of focusing on adding more to our financial lives, I’m a big believer in subtracting. Hitting “pause” can help you to evaluate what’s working – and what’s not. It can also help you to take stock of where you’re at, and where you need to go.
I should note that “hitting pause” on your personal finances isn’t the same thing as tabling them, or ignoring them altogether. This should be a very brief moment where you stop adding extra “stuff” to your financial strategy. Give it a day, or a weekend, where you don’t take any action. Just think about what your short and long term goals are, the problems you’re facing, and where your finances currently stand.
Write It Out
When you’re overwhelmed, I typically suggest you start writing things down. Don’t just focus on the numbers here, either. Write down how you’re feeling about your finances. What debts are stressing you out? What questions do you have that are going unanswered in your current financial planning approach?
Jot all of this down – and don’t worry about whether or not it makes sense. Our money is never a black and white subject. We have differing opinions, emotions, and baggage tied up in our personal finances. So, when you look at the “why” behind your stress, it might not always make sense.
Evaluate Your Strategy
Once you write down everything that’s stressing you out about your money, it’s time to evaluate your current plan. What are you doing about your financial problems? What actions are you currently taking?
Many people I speak with have tried multiple budgets, apps that track their spending, investment strategies, and more. Don’t be afraid to look at the long list of things you’ve attempted and say, “Yeah, none of these are working for me right now.” Even if a tool you’ve been using has worked for countless other people, if it’s not working for you it’s not worth your time or energy.
Maybe something on the long list of things you’ve tried is working for you – it’s also okay to hold on to that piece of your plan. Evaluating your plan isn’t about beating yourself up for your failed attempts at financial planning. It’s about deciding what works, what doesn’t, and what you want to spend your time on in the future.
This doesn’t just go for financial planning tools. This directly relates to spending decisions, as well. Be honest with yourself about where your money is going – is it working for you? Is it having a positive impact on your life? If the answer is “no” it might be time to move on and use your hard-earned cash in another way.
Set Reasonable Goals
A few common goals I see are:
- Get out of debt.
- Save more. (this goes for emergency funds, retirement planning, 529 plans, etc.)
Almost every single financial goal you set falls into these two categories. However, I’d like to add a third to your thought process:
- Spend intentionally.
Spending your money intentionally is often a way to address both your debt repayment and your savings strategy, while also growing your ability to make and stick to a budget that leaves you feeling financially and emotionally fulfilled.
Personally, I like to keep things simple when it comes to financial goal setting with a basic 10/20/30/40 budget. This budget breaks your spending into four categories:
30% Debt Repayment
40% Everything Else
It helps you to prioritize your financial to do list while also addressing your need to spend the remainder of your funds wisely.
Sticking to the Plan
The simpler you keep things, the easier it is to stick with your financial plan. And the bonus? You’ll also feel significantly less overwhelmed about your money. That’s because a simple, easy-to-follow financial plan addresses your financial issues while giving you full control of your money.
Of course, sometimes we start out on our financial journey with the best intentions, and we still fall flat on our face. That’s where NewLeaf Financial Guidance can help. Whether you’re overwhelmed by debt, or you don’t know how to allocate your retirement savings fund, we can help you set up a simple budget that maximizes cash flow and make smart decisions about your finances. Your money is just that – your money. There’s no reason to let it continue to overwhelm you. Contact us today for a no-obligation consultation to learn how you can take back control.