If you want to know how to solve money problems on your own, we can show you. There are many reasons for money problems, we help people with them all the time, and we have excellent “how to” information to solve many of the common challenges. Below we briefly discus how to solve a number of common money problems, but we link to other resources that provide much more help – both with these topics and with many more. Before we get to that, though, we need to let you know the two best solutions to solving money problems: creating a spending plan and tracking your expenses.
Start by Creating a Spending Plan
The very first thing you must do in solving financial problems is to create a personal or household budget (depending on whether you live by yourself or support others with your income). Don’t let the “B” word (budget) scare you off. A budget is simply a spending plan for your money. Creating and following one allows you to see what’s going on with your finances and where your money is going. Without a simple spending plan, even rich people will run into money issues. Everyone needs one, and making one is probably much easier than you would think. In fact, we’ve made it simple (and even a little fun) by creating a budget calculator that guides you and suggests how much to spend in each area of your finances (you don’t have to listen, but the suggestions and advice are thought provoking and helpful).
Related: How to Budget Your Money
Track Your Expenses to Make Sure Your Spending Plan is Accurate
Once you’ve created a budget, it’s a really good idea to track your expenses for a month to make sure the numbers you’re working with are accurate and realistic. If your budget doesn’t reflect reality, it won’t work.
You can track your expenses by collecting all your receipts every day and dropping them in a box. At the end of the month, you can categorize them by the type of expense (groceries, transportation, etc.) and then add them up. If you pay for everything with your bank card or credit card, you can grab your statements and do the same thing.
Most people are surprised when they track their expenses and add up what they spent on different things. Many find their actual spending is different than what they thought, and through tracking their expenses they were able to find part of the reason for their problems with money.
8 Reasons for Money Problems & How to Solve Them
While budgeting and tracking expenses can provide a fair amount of help with solving money and debt problems, for most, it's a good start but more work remains to be done. In solving a financial problem it's important to identify the underlying cause and then either create a plan to fix the issue or get a professional to help you out. Here are eight of the most common reasons for money problems and potential solutions.
|Source of Money Problem||Reason Why Difficulties Often Occur||Solution|
|Earning less than before or Unemployment||Using credit for living expenses while earning less than you earned in the past, or living on credit while unemployed||Re-evaluate your lifestyle & create a budget and follow it. If employed, see if you can get more overtime or a second job|
|Unanticipated illness or accident||Decreased income along with increased medical expenses||Re-evaluate your lifestyle. Get all the help you can. Make sure you're getting everything you're entitled to: check with your province & reach out to societies related to your ailment|
|Moving out on your own||Accustomed to a higher standard of living that took your parents a long time to achieve||Adjust your expectations and learn to live on what you earn rather than what you're use to|
|Birth of first child||Couple didn't budget for the increased expenses and the drop in income during maternity leave||Adjust your budget and your lifestyle to fit the reduced income and increased expenses|
|Divorce||Got the house but can't afford the ongoing expenses on only one income||Sell the house and downsize to something you can afford or generate revenue with the house|
|Retirement||You're now asset rich and cash poor. You can no longer afford to do things plus pay the house upkeep on your reduced income||Sell the house, move into something you can afford, invest extra proceeds from the sale, and enjoy life more|
|Emotional attachment to something||You are unwilling to part with something you can no longer afford: could be a home, vehicle, toy, or business||Put your emotions aside and look at the situation from a financial perspective|
|An addiction||Spending more than you earn trying to satisfy the addiction||Get professional help and counselling. If you don't, you'll never overcome your money problems|
While the answers above may be brief, if any of them can help you begin to identify part of the problem you're going through, then you can begin to take steps to resolve the challenges you're going through.
Different Ways to Solve Money Problems
Money problems often occur for a number of reasons and can be eliminated more quickly and effectively if attacked from a number of different angles. Here are a whole bunch of ways you can begin taking significant steps towards solving these issues. Click on the links to learn more about the solutions that you think might apply to your situation.
- How to Overcome Financial Problems - 6 steps to solve financial problems including a lot of ideas for small steps you can take to address your financial challenges.
- 12 of the Most Effective Ways to Get Out of Debt - Practical ways to get out of debt along with helpful advice and suggestions.
- How to Manage Debt Better - Learn the fastest ways to pay off your debt, how to get lower interest rates, how to consolidate debt, and much more.
- How to Fix Your Credit - If bad or bruised credit is holding you back, learn how to improve it as quickly as possible.
- How Much Debt is Too Much - If you think the problem may be that you're carrying too much debt, here are 3 different ways to see if that's true.
- How to Consolidate Debt - If you're thinking that a debt consolidation loan may solve your money problems, this will show you 5 different options.
- 10 Tips for Paying Off Credit Card Debts - If credit cards are one of the issues you need to deal with, here are a bunch of tips to help you make some progress.
Help for Marriage & Relationship Financial Problems
Money can cause marriage and relationship problems. If financial troubles are causing difficulties in your marriage, here are some resources that my be able to help you solve some of these problems:
Freeing up your existing income so that you have more funds to work with is another good way to help address money problems. Here are some great ideas:
After working on your money problems for a while, you may come to the conclusion that what you really need is to sit down with a financial expert to work through your situation and find the best solution to get your finances back on track. If this is where you're at, then contact a local non-profit credit counselling agency in your area. They can usually help you either in person or over the phone to create a budget, review your whole financial picture, and explore the different options that may be available to you. Help from a non-profit like this is usually free, confidential, and non-judgmental. Get the financial help, debt help, or help for money troubles you need. Contact a non-profit credit counselling organization today if you think it might help.