7 Simple Steps To 2022 Financial Survival

Managing your money well doesn’t have to be a complicated process, and you don’t have to earn a degree in finance to learn how to be financially savvy. The key is to keep it simple and not to overthink it, and not to put it off!

I’ll say that again – keep it simple, don’t overthink it and don’t put it off!

Every time you feel like you’re getting overwhelmed, take a big deep breath, have a walk, a cuppa and create some space between you and the problem and come back to it with a clear head.

As a Financial Coach I often find that many people find money confusing and overwhelming and there is a significant amount of shame around money. Having financial control is about clarity, and I mean complete clarity – this is not the time to put your head in the sand!

When I say financial survival in 7 simple steps I mean it – simplicity is crucial. So if you’re skim reading this and you know all this stuff, please stop and ask yourself so you know it, but do you do it?

1. Keep it Simple – Spend Less Than You Earn

The most obvious and simple rule is spending within your means, i.e. don’t spend more than you earn!

Does this sound too simple to get your head around? It’s the simplicity that will help you win the day when it comes to surviving financially is to spend less money than you earn. It sounds simple, and it is, because it’s the only way to save money and to live within or below your means.

If you’re charging your expenses on credit cards that you can’t pay off at the end of the month, then you’re spending more than you earn to sustain a lifestyle you can’t afford.

If you have to charge it, then you can’t afford it! Full stop!

Cut up your credit cards or “freeze them” or give them to someone you trust for safekeeping.

Spending less than you earn might be a difficult step to take, but it’s crucial if you want to take control of your finances and save some money.

2. Track What You Spend

In order to spend less than you earn, you first have to know how much you’re spending each month, which means that you have to track what you spend.

It may seem daunting initially, but it doesn’t have to be difficult. There are many ways you can do this.

You can pay everything via a debit or checking account for an easy way to track expenses. If you prefer cash, you may have to write every charge down on paper (or record it on your phone or computer), or save all the receipts to sort later.

The problem with tap & go…. (contactless) is that it doesn’t feel like spending. The upside is that it is safe and it’s connected to your current account, so it’s a debit card, not a credit card. 

The way you choose to track your spending isn’t important. Just take charge and actually do it. You won’t have any idea how much you’re spending unless you track it first.

3. Check Your Credit Health

You may think you know what is in your credit report, but the reality is that you’ll have no idea until you look. 

Checking your credit report will also help you identify ways that you can improve your score. I always recommend www.checkmyfile.com because it uses all 4 UK credit agencies.

4. Be Accountable

Once you can see clearly on paper (or screen) how you’re spending your money and what you’re spending it on, hold yourself accountable and don’t make excuses for your purchases.

Be honest with yourself about how much you spend on everything, whether it’s online shopping, food takeaways,  clothes,  shoes, your takeaway coffee habit, or your mindless stationary habit! 

I always recommend doing it on paper – for some reason it works better!

Obviously working with a Financial Coach always helps, we’ll come back to that….

5. Make a Budget Plan

From there, make a budget. It doesn’t have to be a fancy budget, and you don’t have to be a genius at spreadsheets to do it. You don’t even need a computer to do it. Don’t use these as excuses to put it off!

Many first time budgeters appreciate an all-cash budget to start with. The all-cash method is easy because once the money’s gone, it’s gone.

If you overspend in one area, you have to pull the cash from another area, so there’s really no way you can fudge this kind of budget.

This is challenging at the moment due to lockdown and people not wanting to handle cash and having to buy online – so be creative. Create a “cash account” debit card account. It’s foolproof and it’s beginner proof!

6. Be Willing to Compromise

If you have a champagne taste on a beer budget – you are going to have to compromise!!

Think about scaling down on the brands you choose, from the vegetables you buy to the shopping around you need to do for the big purchases. Just because it’s expensive doesn’t always mean to say it’s better.

So make careful spending decisions.

7. Know Your Numbers

Don’t be a Financial Ostriche!

They usually stick their heads in the sand in the hope that money issues will get sorted out as if by magic!

What underpins a financial ‘ostrich mentality’ is typically anxiety – paralysing worry at what future problems lie buried beneath the hard figures.

So the first step must be to face that fear head on!

Open all the envelopes, review all your financial documents, from bank statements through to bills and insurance policies, then make a list of any mistakes you’re making.

Track your numbers, get the numbers visible and take great pleasure when the numbers start to improve – because they will! I know it’s a bit obvious – but the numbers never lie. You can tell yourself all the stories you want, make all the excuses you can think of and package them up as justifications. So always come back to the numbers as the numbers never lie!

Financial Survival like all survival strategies is for the fittest! So ensure you are financially fit and if you need a hand to take action then get in touch!

Time to take action?

If you need someone who knows what to do, won’t judge you, and will ask those difficult questions and help you fix the problem – then please email me and let’s chat – email me now! chat@rachelrowley.co.uk

Let me help you Master Your Money and Live the Life you Deserve!