Financial predicament

I seem to have gotten myself into quite the financial predicament. Currently, my cash flow is just a mess as I never seem to have enough money to live. All my finances are thrown off as soon as I pay for my college semester. Naturally, I always prioritize this expense, but I was wondering what I could be doing to improve my finances. Although I work part-time in a restaurant in Ontario, I think I need to supplement my income. Any advice?

The first step in recovering from financial issues is to avoid dwelling in shame or self-pity. It is important to remain calm and avoid panicking. Financial situations are common to everyone, and eventually, every person will undergo financial stress to some degree. Accept responsibility, but do not beat yourself up. Instead, focus on learning the lesson, solving the issue, and preparing so that the errors are never committed again. Also, avoid comparing your situation to similar situations. Although some commonalities may exist, every person’s problems are different and may be caused by differing factors. 

First, create a budget. You can do this by writing down all expenses and income sources on a piece of paper. Alternatively, you can use Microsoft Excel. I would recommend the Excel option as the idea is to improve the numbers; therefore, the figures will be clearer and more organized and can be edited continuously. Regardless of the form, you will gain clarity by looking at the numbers and revisiting the figures periodically. The idea is that by the end of the exercise, you will know exactly how much money you are missing from your finances on a monthly basis. For this exercise to be useful and accurate, you need to be honest and write down all financial movements.

 These figures will tell you how much money you need to come up with monthly. Currently, you are in negative cash flow. This is the financial situation where expenses exceed income. There are three options to mathematically reach either a balance, where the income and expenses are equal or a positive cash flow, where the income is greater than the expenses. The first is to reduce expenses until expenses are less than or equal to income. The second is to increase income so that income is equal to or greater than expenses. Lastly, combine the two by increasing income and decreasing expenses. Sometimes people can visualize the budget and use short-term payday loans to account for minor setbacks while adjusting expenses. This may be the case if you see that your expenses can be reduced significantly during the next weeks. Be careful though. If you do not have control of your expenses, the option can accelerate the financial burden.

The easiest way to improve cash flow is to reduce some expenses while eliminating others. Start by looking at your monthly budget. If you see that you are visiting Starbucks on a weekly basis, reduce this expense by making your own coffee. The idea is to eliminate all unnecessary expenses until you reach positive cash flow. See where you can reduce by asking yourself: “is this a need or is this a want?” If you see that you can live without the expense, eliminate it and save the funds. Once all unnecessary items have been eliminated, continue with items that can be reduced. Can you reduce your cable bill by selecting a less expensive option or by using Netflix?

If the results still produce higher expenses than income, you need to consider supplementing your income. Look toward simple jobs. Are you good at writing? Are you good with computers? Are you good with pets? Take an inventory of your skill set and look for jobs that best align with your talents. Supplementing income can be as simple as looking for tasks that you can perform in your spare time such as babysitting, walking a neighbor’s dog, or teaching a friend how to use Excel. Be creative and resourceful. You know yourself better than anyone else. Therefore, apply your skills!

“A mind troubled by doubt cannot focus on the course to victory.” --Arthur Golden

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