It sucks right? Having a disastrous finances! It affects every inch of you. The anxiety, lack of sleep, drained mental resources, and withdrawal away from others are just probably something you are experiencing if your finances are in bad shape.

I know because I was there almost 3 years ago. Below are the things that won’t cost a dime to do for handling financial stress. The first step has never been easy and I find the last advice the most rational and logical.

Acknowledge that you have a problem with your finances. 

It all starts within you. Admit to yourself that your finances are in bad shape. The keyword is acknowledging and not blaming. The moment you acknowledge your situation, your mind becomes clearer and more focused on your next steps because it alters your brain to see more of your capabilities. You start to realize the root cause of your financial disaster without judging them from your perspective.

Change your money mindset.

 I took a 180-degree turn by changing my money mindset. That has been a life-changing moment for me and I suggest you do the same. Read books and blogs on personal finance that positively influence you, study the psychology of money, learn from other people, and take advantage of free resources online. What you believe will drive your behavior and it’s the same for money. That’s how I learn that budgeting and expense tracking are 2 different things.

Stop blaming others why you’re not recovering from your loss

When I incurred half a million pesos debt due to a business failure almost 3 years ago, I blame my business partner. He ran off with my money and I was left alone to pay my bank loans. I’d always tell myself, if he wouldn’t steal my money, I wouldn’t be in that financial predicament.

But now looking back, I realized that I was to blame. You see, I entered in a business without knowing the character of that person. I was complacent because my brother-in-law knows him. We did not enter into a contract nor agreement, none at all and so I had to endure the pain of being cheated and unfairly treated for his benefit. I knew someone who asked for help from her sister who is “nakakaluwag” but for some reason, his sister declined. And he was telling me that, “Kung pinahiram lang sana ako ng kapatid ko bayad ko na yun!” Oh please, let’s stop this mentality. Stop waiting that someone’s gonna fix your financial mess for you. No one’s gonna come to rescue you except you! You can ask for help but stay away from this money mindset.

Start Planning Strategically and take action. 

Take a moment to sit down and give your 100% focus so you can start strategizing your next steps. Start with the habits that are messing up your finances. Do you constantly use your credit card for nothing or you’re intentional with its purchases?

I can’t say stop using your credit card but if you’re intentional with your spending then by all means use it. Go on a spending freeze, re-evaluate your subscriptions or eliminate some of them, lower your housing expenses (or maybe find a cheaper housing option) and lastly, list down/consolidate your debts in a spreadsheet or an excel so you can have a bird’s eye view of your total debts.

Next, pay as much as you can afford each payday. What I did in the past also was take a quick loan to meet my daily needs and pay off any outstanding debts but that was just an interim measure.

Increase your income.

 If you want to get out of debt faster, you should get other sources of income. It is what it is. Leverage your skills, and become addicted to making more money. Get a part-time job or monetize your hobby. Eyes on the prize (in this case, get out of your financial mess) and make debt elimination a top priority.

Having a financial mess is distressing anybody wouldn’t want to be in. But what’s scary is being stuck and not moving forward. This reminds me of Newton’s 3rd law of motion, “For every action in nature there is an equal and opposite reaction” I think it applies to finances as well. As they say, forces always occur in pairs. The more effort you exert, the faster you get out of financial disaster.