Whether you feel like you are not saving enough, not earning enough, have too much debt or feel guilty about a recent purchase, you could probably use a financial mood boost.
I pay all my bills on time, have enough to save and I am paying a lot towards debt, but there are still times when I feel like I am failing. No matter how much money I have, I always feel like it's not enough. I can't reach my financial goals fast enough and getting rid of my student loans seems like a million light years away.
Everyone deals with financial depression and periods of doubt. Here are some ideas to help your financial outlook and give you hope that you are on the right track towards financial success.
Have you ever felt like everyone around you is doing better financially? Does it feel like everyone else has it all figured out and you are the only one struggling with finances.? I have been there and as an Accredited Financial Counselor, I sometimes feel like I have to be doing better than everyone else. I am supposed to be an expert on money management so I should be excelling with my own finances, right?
It so important to remember that everyone's financial situation is different. Comparing your financial situation with others is not only unfair to you but it can also be very damaging, financially and mentally.
When you compare your financial situation to other people you have to ask yourself, "What makes you feel like they are doing better financially than you?" Do you look at their pay-stubs, analyze their balance sheets or read through their budget? Your answer is probably "no," right?
The truth is we base our feelings on what we see and what we see can be misleading. Maybe your sister is always taking nice vacations or purchased a house way before you were able to or maybe your friend is always going out to eat at nice restaurants when you can only afford to eat at home.
You must remember that these things tell you nothing about their financial situation. You don't know how much debt your sister took on when she purchased that new home or how your friend is paying for those nice meals at fancy restaurants.
Focusing on what other people have really only forces you to focus on what you do NOT have. Be proud of your own financial progress and focus on what truly matters in your own life.
It's hard to see the progress we have made financially because most of the time our success is not achievable overnight. Financial progress takes months and even sometimes years before we actually see a positive difference.
It's important to remember that improving your financial future is a process. Monitoring your progress will help you understand that progress is being made, even if it's not immediately.
One of the ways to track your progress is by creating and maintaining a balance sheet. This financial statement is used to determine your net worth and allows you to compare what you own (financial assets) to what you owe (financial liabilities).
I update my balance twice per year and every year I am blown away with the progress I have made even though I FEEL like I have made no progress at all. You balance sheet will open your eyes to positive things you are doing even though you might not notice the progress right away.
Let me give you an example of how this pulls me out of my negative financial thinking. When I started tracking my balance sheet almost 5 years ago, I had 7 credit cards listed under my liabilities. All of these credit cards totaled over $11,000. Today when I look at my balance sheet, I have one credit card listed under liabilities with a current balance of $500. When I feel like I am not doing enough, or if I feel like I am failing financially, I look at this to remind myself that I have come a long way.
Create Clear Financial Goals
Reaching a financial goal gives you a huge feeling of accomplishment. It also helps you create a clear plan of action. It's easy for life to get in the way and for us to get derailed and lose motivation. This lack of motivation is a huge reason why we sometimes feel like we are failing financially.
There are so many benefits for setting financial goals such as developing positive financial habits, defining a clear picture of what you really want, and determining what's really important to you. Without these goals, getting out of a financial rut will be harder and it will be less likely for you to get back on the right track.
Setting goals can lead to positive financial progress (which you need to track on your balance sheet) and it can also result in a more positive attitude towards your finances.
Here are some general rules when creating clear financial goals
Make sure your financial goals are clear and detailed
Instead of saying "I want to save $300" make it better by saying "I want to save $300 by January 1st for my husband's birthday present." Having a clear goal will make it easier to create a clear plan of action.
Choose one important financial goal to work on a little at a time
You will set yourself up for failure if you try to tackle all of your goals overnight. It's unrealistic to say "I want to pay off my house in one year." It's easier to feel a sense of accomplishment if you break it down into smaller goals like "I want to put an extra $200 towards my mortgage loan." This goal is more realistic and is easier to achieve by taking defined measurable steps.
Don't beat yourself up if you don't reach a financial goal when you wanted
It's still an accomplishment if you made progress towards improving your financial situation. Use the progress you have made so far to feel encouraged to stick with it.
Everyone gets the finance blues at one time or another
Never underestimate the power of conversation. Talking to someone about your finances can make a huge difference in your financial mindset. Get encouragement and support from the people in your life. Trust me, feeling down about your finances is hard, but it's even harder to feel that way alone. Reach out, get support and start feeling better about your finances today.
Editor's note: This article was originally published on The Budget Mom. It has been republished here with permission.
Kumiko Ehrmantraut is the owner and creator of The Budget Mom. She started working in the finance industry in 2011, shortly after graduating college with a Finance Major. She obtained her Accredited Financial Counselor® designation in 2015 and is passionate about financial literacy. When she is not running her blog you can usually find her behind a camera lens, riding motorcycles with her husband, or coloring with her 4-year-old son. She currently resides in Spokane, Washington.