Ideas for People Struggling To Make Ends Meet – Part 4 INTRO:
“The Most Fatal Illusion In Life Is “The Settled Point Of View”
Life Is Growth & Motion. A Fixed Point Of View Kills” ~ Brooks Atkinson
We continue our journey through the Series of “Guide to Personal Growth & Wellness”. We’ve covered “Creating Lifestyle Changes” and “Creating Good Emotional Health”. In this section, we’ll examine the impact of Finance on our lives and how to go about creating a healthy Financial Life.
As managing finance is a vast topic with many different parts to it, I’ve divided this topic into two parts
Part (a): Healthy Financial Life: Finance for people struggling to make ends meet today.
Part (b): Healthy Financial Life: Financial Ideas for people with good incomes and can put a proportion away.
Speaking generally, most of us are, unfortunately, not taught the importance of saving and investing for future needs. This aspect of childhood upbringing is so badly done that even studying for a degree in University and having a Master’s qualification doesn’t guarantee an understanding of best practices in personal money management. We are taught the complex excels & model building parts but not how to comfortably prepare our finances for the future.
Financial Well Being is an important part of Personal Growth & Wellness. In this article, we’ll explore simple aspects of finance and how to manage them. I’ll also give some pointers on how to be an investor if you want to go further.
I believe that all of us should strive to put some money away for future contingencies or at least for our pensions and financial security. No one can work forever. There will come a time when you can no longer work.
Saving for contingencies and pension should start immediately you are in gainful employment, especially savings for your retirement. Ideally, you would have started putting something aside by the time you are 30 years old.
For people on a low income, who can’t imagine being able to save a dime, please read to the end of this article. You’ll see that saving is possible for everyone. I’ll explain how important your upbringing, mindset, and perceptions control your ability to save and how to change the traditional thinking you may have.
A lot of people struggle to make ends meet. My advice is to start small and start immediately. Every day lost will cost you a lot at the point of retirement.
Understanding subliminal aspects of working against you is a good starting point. If these are shifted, your perceived belief that you can’t save (because you have many things vying for your money) will change to positive thoughts and practical, applicable actions.
Every one of us can save money, no matter what our present commitments are. It’s our mindsets that have been bashed into believing that we can’t save. You may even be thinking this now, read this article!
Let us look deeper. Start by defining what exactly is holding you back from saving. How do you currently manage your finances? Are you in control? If not, why not? Successfully answering these will give you a solid idea of where your thoughts are presently and what you should change for a better future.
Changing Your Mindset: Everything in our lives is connected. In our other articles (“Lifestyle Changes” and “Good Emotional Health”) we discussed the effects of being in the wrong environment. The damages caused by surrounding yourself with the wrong people and how this affects your effectiveness. The same applies here. You will be buried in the “Lose Mindset” if you’re constantly around people struggling financially, (your neighbors, family, your children’s school teacher, etc.), people who can’t pay their monthly bills and are endlessly struggling to make ends meet.
It is proven that when we are in a negative social environment, it is virtually impossible to have a positive mindset. This is because you won’t have any other points of reference. It is impossible to think differently about money than what is around you. A poor social environment where everybody is struggling financially becomes your default option. This, unfortunately, equates to “Financial Failure and Defeat “.
Your only chance to succeed in such circumstances is to overwhelm the negative inputs. You do so by infusing positivity in you and around you. We know that replacing negative surroundings/inputs with positives will surely change your thinking and mindset. This, in turn, changes your core and results in positives. For a successful outcome, the amount of positive inputs you apply is important. Scarce input of positivity will not suffice. You need to immerse yourself in it, often and for long periods of time. This state of mind gradually becomes the new you.
Bearing the following in mind may help you see what you’re fighting against. Remember that this is a circle which without a change of sort, simply leads you back to where you started (Lose-Mind-set).
It goes like this:
- Your social environment shaped your philosophy about money.
- Your philosophy shaped your beliefs.
- Your beliefs shaped your actions.
- Your actions shape your results.
- The results reinforced your philosophy.
And on it goes. This, like all circles, is closed with no exit way! You essentially go round and return to the same starting point, meaning being sentenced to struggling with money all your life.
The only way out of the circle is to change something. The easiest change would be your actions as they are the only thing you can control. Here are three things to focus on to achieve change(s):
- Changing your “Social Environment”
- Changing your “Personal Beliefs (Philosophy)”
- Repair/Build Up Your Credit Scoring
Start the change to your Social Environment by interacting with people outside your negative social environment. We’re lucky to be in the technological era where online relationships with the right people are possible. Look around you, ask around and research where you can find this in abundance. Tap into them once identified. Interact and absorb ideas and attitudes from them.
My Tips:Expand this aspect further by meeting more people from anyone you come in contact.
Read and research more. Bear in mind that just one online program, one seminar, or one book won’t be enough to transform your mindset. You need as much interaction with the right people to reverse the massive ocean of negative input around you.
Once you’ve started on this, go on to look at “Savings” of some sort. It doesn’t have to be spectacular. Try to put something aside. Some people may think this is not possible, but hold on; read through my story, and see what I went through. I was in this position too and managed to work through things.
Changing your “Personal Beliefs (Philosophy)”:
One of the tactics that worked for me in achieving positive (financial) results and phenomenal change to my perception came from David Bach’s book “Start Over, Finish Rich”. Bach advocates a saving method called “Pay Yourself First”. There are a few actionable pieces of advice in this book. Reading and applying the “Pay Yourself First” strategy worked for me.
I didn’t want to believe it would work but I was desperate enough to try it out. I started on a “very” small scale, deciding to invest the least possible. I settled on $50 per month, about 3% of my monthly income at that point. I was worried that I won’t be able to pay all my bills (rent, utility bills, transport to work, food for the month, etc.) without the $50.
The process was easy enough. I opened a separate savings account and deposited the $50. I went about paying for things as I did before but was a bit apprehensive. At the end of the month, I had the $50 in my account BUT still managed to pay my bills. I didn’t starve! The next month was the same, and the months after. By the 8th month, I had $400 in the savings account. I couldn’t believe I had $400 unencumbered cash in my account. I never had that before. And to crown it all, my bills were all paid. SO IT WORKED!
It was a great feeling to have the cash in my account, but a bigger aspect was the change to my money philosophy. It was phenomenal, so I decided to increase my monthly savings to $80 in the 9th month. I also put aside another $10 for recurring expenses, bills that are paid quarterly or half-yearly.
This experience placed me on the “Savings Ladder”. It also created a big jump in my “Positive Growth” input. It helped change my “Money Philosophy” by shifting my “Doomed Money Mindset”. Although this is a small amount to some people, it showed me that I can be richer than I ever thought possible. The experience made me look at other parts of my life. I began to see that my lifestyle, wellbeing, finances are all in my hands; that I can do things if I believe and set about doing them.
I got the momentum and kept pushing on, looking at areas of my life where I lack control and confidence. The main one was my job prospects. Being able to look inwards and value me more, shifted my fear about changing jobs. I applied for a better-paid job and guess what, I got the job! All these helped to shake off the draining negative input I had around me. I’m happy to say that it’s been up and up since then.
Once you’ve sorted out your Environment and Mindset, you’ll be ready to work on how (what I call) “The Money Companies” see you. These are the Credit Companies and Credit Score Monitoring Companies. One common thing that they all will look at is your Credit Report.
Your Credit Report is your gateway to credit-related products. It gives you access to things like apartment rentals, credit cards, loans, mortgages, etc.
The most important thing in the report is your Credit Score. This needs to be in a good shape for you to tap into some services. To build your Credit Score up, you need to understand how they are scored. There are 5 main parts to credit scoring.
- Your Payment History – This is the most important factor and relates to how you make payments on any previous credits you had. Paying your repayments on time is very important. Don’t be late on things like your monthly credit card and other credit payments.
- Length of Credit History – The length of your oldest credit account matters too. It shows that you can consistently use credit responsibly.
- Credit Utilization – This is the way you use your Credit card. It is equally important. Make sure you don’t max out your cards. Try to stay at around 30% of your credit limits. This maintains a good utilization rate.
- Mixing Different Credits – Having different accounts and types of credit accounts show lenders that you can manage different types of debts.
- Applying for New Credit – This needs to be on the low side. Interested companies will check your history on Experian and other companies that keep these records. It is better NOT to have many of such. It shows that you are not constantly looking for credits.
How to Build Your Credit Score: Here are some ways to build a good credit history and get a good credit score:
- Using Secured Credit Card: You can use this if your bank refused you a card, but they can issue a Secured Credit Card which backed with a cash deposit. The credit limit here will be the amount
you deposited. Using this for 6 months will put you in a better position to successfully get a regular credit card. You can then convert this secured card to a regular Card which is an unsecured card. With this, you get on the right path to building your credit history.
- There are few companies that can give you a small loan to help you get on the grid of the credit system. These are known as Credit Builder Loans. These companies may require a deposit but the good thing is that you’ll get into the Credit Scoring system and build your credit history.
- Co-Signer Card: This is where relatives or close friends put you on their credit product. You use their good credit history to get started. Bear in mind that because you are a co-signer, you will be liable for any of your defaults. It is important that you are ready for this before embarking on this route.
- Authorized User on Someone Else’s Credit Card: This, like Co-signer, is done through relatives or close friends. Here you become a user on their credit card with all the benefits of a credit card but you will not be obligated to pay for charges.
- Start now, acknowledge and believe that your position is not set in stone.
- Put something small in motion, observe the results.
- Let the effects of the results percolate through your philosophy and money beliefs.
- Let it affect your mindset. You need the effects to go through your being and your psyche for a chance to change your “Poor-Mentality” mindset.
- If you are one of the lucky ones that have entrepreneur mindset, read up and look online on how you can do business without investing your money. There are companies looking for people to represent them for a commission.
Use your hobby or expertise to make extra income. It’s now easy to use hobbies such as walking (use your knowledge of an area you know well to be a guide), photography (there are lots of enthusiasts that will pay for your time and a chance to meet like-minded people) to make money.