10 Ideas to Fix Your Money Problems

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If you are in a bad financial situation, and here are ten things that could do to help you toward recovery. These steps will put you back on track, but the journey will be long. But as Confucius said, “A journey of a thousand miles begins with a single step.”

1. Empower Yourself

The first and the hardest thing to do is recognize that you are in a bad financial situation and you have to decide to do something about it consciously. Arm yourself with knowledge about money, so that you can learn to master it. There are a lot of good books, blogs, and websites that you can peruse to build your knowledge. I recommend this short article on wealth building.

2. Stop Carrying Credit Cards

Sometimes the temptation to use these plastic cards is just too high — it is so convenient. A good way to stop yourself from using them is not to carry them around. Carry only enough cash for whatever you have planned for the day. This will force you to think about your spending habits and prevent you from buying on impulse. If you manage to clear your credit card debt, you can reward yourself by keeping one in your wallet for emergencies.

3. Consolidate and Pay Down Your Debt

If you owe money on several credit cards, it is time to make phone calls. Call your credit card companies and ask them to lower the interest rate. If the customer service representative refuses, hang up and call back again — another person may be more helpful.

While on the phone, ask if they would offer you a better interest rate and waive fees if you transfer all your credit card balances to them. Do not forget to review the fine print carefully — e.g., How long does this better rate last? What is the catch? You do not want to be surprised by a higher rate three months down the road.

While you are going through this phone exercise, make a list of all your credit cards. For each writes down the current balance, interest rate, negotiated interest rate, balance transfer fee, and any other note. You will want to come back to this later.

Lastly, ask your Credit Union or local bank to see if they would offer you a personal loan. If the rate is reasonable, you can use this money to pay off balances on credit cards with higher interest rates.

Once you have your list, you can do the following:

  • Transfer balances from high interest to low interest cards
  • Pay off the balance with the highest interest rate using your money, or money you borrowed; while paying the minimum on all other cards

Dave Ramsey coins the term Debt Snowball, and here is a good write up on this method.

Remember, to put your credit cards away until you wipe off your debt.

4. Hit the Pause Button on Spending

Only buy the minimum you need to survive — e.g., food, medicine, rent (for shelter), etc. — and do not stock up. That means no Costco and BJ for you.

Also, opt for less expensive items over more expensive ones, and buy used instead of new when you can. For electronics, always wait until the first price cut before you buy.

For all other stuff, do not buy anything the moment you want it, wait one month and see what happens. If you still want it then, maybe it is worth your money.

Check out “Save Up to Buy Things” and “The 30-Day Rule” money hacks to help you manage your spending.

5. Always Have a Shopping List Handy

I cannot tell you how many times I go to the store to buy one thing and come back with a whole bunch of stuff I did not plan to buy. Always make a shopping list before you go to the store, and do not be tempted while you are there. I usually walk straight to the items that I want and go through my list as fast as I can. My theory is if I did not put it on my list, it could not be that important.

If you do this, you can save a decent amount of money each week.

6. Spend Your Free Time Away from the Mall

I know it is nice and cool at the mall. You get to look at other people and play with all the cool toys at Brookstone and Sharper Image. But spending your free time at the mall is a terrible way to get out of a financial problem. Instead, spend your time on other activities. Some of my favorites are walking in the park, riding my bicycle, reading books, working on my blog, reading stuff on the Net, watching television and old DVDs — to name a few.

A good example of this mantra is my dad. He spends most of his free time in his garden. We have string beans, hot peppers, bitter melons, and mints growing in our front yard. Instead of going to the local store, we can go to the yard and get them. How cool is that?

7. Save $20 a Week for Rainy Day

Even if you are tempted to use every last dollar to pay off your debt (that is what you have been doing right?), you should pull out $20 each week. Keep this under the mattress if you must. Wherever you keep it, do not use the money once you saved it. After one year, you will have your first $1,000 of Emergency Fund.

Instead of the mattress, you can do even better by putting your money in a high yield savings account or a money market fund. Just make sure you can quickly get to it in case of an emergency.

8. Update Your Resume and Post It on the Web

When was the last time you ask for a raise or go for a promotion? When was the last time you update your resume? The time is NOW. Update your resume and post it on job search sites. While you are there, look around and see what employers are looking for. Maybe it is time to update your knowledge and skills.

As you put yourself out there, do not forget to approach your boss and ask for a raise.

9. Play the Expense Reduction Game

Here are 40+ ways to save money. How about turning this into a game with your family and see how many of these you can do? And bonus points for doing things that you come up on your own.

10. Start a Side Hustle

While cutting expenses and pay down your debt is a good start, there is only so much you can do here. To get out of your financial mess faster, try making more money. Here are 40+ extra income ideas and ways to make money. See how many of these you can do.

I hope that you find these steps helpful, simple, and straightforward.

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16 years ago

These are very true and I’d say #2 is a key step. Cutting them up is a great way to go because if nothing else it leaves an invaluable imprint on your mind of the change that is taking place.

16 years ago

Pinyo I totally agree with your points, they are excellent. I definitely agree that step 1 is the hardest as many of us are more than happy to ignore the problem or even refuse that there is an issue in the first place. The sooner you recognize but also accept that there is a problem the sooner you begin to change your circumstances now matter how bad they are. I’ve also written a similar article on this area entitled “A Step by Step Guide to Get Out Of Debt”. This is based upon my experiences of working with people with… Read more »

15 years ago

Don’t you think the best way to kill the credit cards is to cut them all up, yet leave accounts open? That way you remove the temptation to use them, whilst benefiting from a current credit history.

15 years ago

We’ve kept our credit cards open but we don’t use them. We may close some of them but have kept them all. It’s been good for our credit so far. But, your good credit is your only insurance in this economy. Things are looking so grim that we need to do all we can to save and stay afloat until things get better. All this doom also leads me to watch less news. It helps me to keep a cheerier perspective.

Doctor S
Doctor S
15 years ago

#1 is the most important. Some people (Like myself) can just be too stubborn to admit that they even have the slightest problem. Finding your own personal drawbacks and weaknesses is the first step to finding solutions.

Credit cards are the devil, cutting them up is the answer, but extreme. I prefer to consolidating many cards into one and only carrying one that benefits you. Making the credit card work for you as long as you are handling your obligation in paying it off appropriately. If you can not handle that much, cut the plastic up ASAP!

lost and alone
lost and alone
14 years ago

Once you are in over your head though, there doesn’t seem to be a way out. If you couldn’t pay the minimum payments to begin with, how can you negotiate with multiple companies so that you can EVER get your debt repaid? I, personally, have given up. If they take me to court, they take me. I can’t pay my health insurance and the credit cards too and my health insurance has gone up by OVER $100.00 EVERY YEAR for the past five years. I don’t see a way out.

Nick Vail
Nick Vail
7 years ago

SPENDING. This is the biggest problem that ruins a family’s financial plan. Folks want to reach financial independence but aren’t willing to sacrifice what they want now with what they want in the future. Saving needs to become a priority.

Scott Cole
4 years ago

I think in this day and age, everyone should start a side hustle of some sort. It’s so easy to do, and it’s a great way to pick up some extra cash, perhaps in just a few hours per week.

10 Ideas to Fix Your Money Problems

by Pinyo Bhulipongsanon time to read: 5 min
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