When it comes to financial decisions, such as saving money and building wealth, we can all probably come up with several excuses as to why we haven’t done certain things. And everyone can likely make a long list of bad financial decisions they have made. Though we all have some money regrets, the important thing is that we acknowledge it and take steps to improve our finances!

Regardless of the money choices you’ve made, there is always some room for improvement when it comes to money. And the opportunity to improve can come from learning from other people’s money mistakes!

Especially as women, it is critical for us to get our finances in order. Not only do we earn less than men, but we spend more time out of the workforce having and raising children.

Additionally, we live longer than men on average.

This means we are likely to need more money over the long term to support ourselves, so we have to be smart about our finances.

So, let’s examine the most common bad financial decisions. Then we’ll discuss how to recover and start making better choices going forward!

15 Bad financial decisions to watch out for

Below are some of the most common bad financial decisions people make regarding their finances. Can you relate? Not to worry though! I’m also sharing they key ways in which you can avoid or recover from them.

1. Not saving any of your monthly income

When it comes to saving money, I’ve heard so many people complain that after they’ve paid their bills, they don’t have any money to contribute to their retirement accounts or to add to their emergency fund.

However, some of us still find money to buy non-essential items, go out for drinks and dinner, and so much more! A lot of times, I’ll even hear people say things like, “Well, dinner only costs $20, it doesn’t make a difference.”

However, putting away $20 a week for one year in a savings account with zero interest will give you $1,040 dollars at the end of the year. Imagine if you did that for five years. You’d have over $5,000. And saving $20 on a weekly basis is likely money you wouldn’t miss!

Not putting money into your savings account each month is common but can be harmful to your future self. It often happens when people don’t really have any concrete financial goal setting in place or think they have plenty of time to save in the future.

But by doing this, they end up paying themselves last. It’s definitely a bad financial decision.

What to do if you have not been saving:

One way to easily save is to establish the habit of trying out different budgeting methods and working with a monthly budget. Make it a point to save at least 10% of your monthly income before you spend anything. If 10% seems like a stretch right away, start with 5% and build up to 10% over the next few months.

Consider automating your deposits to your savings account, too—this will make sticking to your savings goals much easier.

2. Living large in your 20s

In your 20’s, you graduate from college, get your first big paycheck, and maybe move out on your own. And now you can do things that you couldn’t do when you didn’t make any money.

Also, you probably don’t have as many financial burdens as someone in their 30s or 40s. So it’s easy to put savings on the back burner while you enjoy those glorious twenties and make poor financial decisions.

Although it’s easy to get carried away when you first start earning money, don’t forget to think about your future.

What to do if you find yourself living large:

Yes, you might be young and yes you might have time to save.

However, nothing can replace lost time, and the power of compounding, so learn how to budget and prioritize your future financial well-being over your wants.

Your financial decision-making in your 20s has a huge impact on your future, and you should start to build wealth in your 20s if possible.

3. Making large purchases and not paying off your credit card

One of the most common bad financial decisions is not paying off a credit card. For many, a lot of credit card debt comes from buying things we don’t really need. From that awesome clothing sale to eating out every day, those small transactions can rack up pretty quickly, and before we know it, we are left with a pretty hefty credit card balance.

Avoid this regret by reminding yourself that credit is actually debt and the available balance on your credit card isn’t real money! It’s money you are borrowing and will have to pay back.

What to do if you have credit card debt:

I like to describe debt as a stumbling block on the path to building wealth. And to get past it, you need to have a plan to roll (or blast) that block out of your way! It can be very difficult to save money when you are paying back debt at high interest.

However, creating and executing a plan to aggressively attack your debt, especially credit card debt, allows you to pay it off as quickly as possible. Then, you can fully focus on saving more money.

If you currently have debt, stop using your credit card and establish a debt repayment plan, like the debt snowball method.

4. Delaying important financial decisions

Putting off important financial decisions, e.g., paying off debt, saving, investing, etc., can be a big financial mistake. Too many people promise themselves to get around to it, but instead of taking action, we waste so much time.

How to stop delaying financial decisions:

To stop delaying important financial decisions, start by breaking down the actions you need to take into smaller, manageable steps. Set specific deadlines for each step to create a sense of urgency.

Educate yourself about the decisions you need to make, whether it’s investing, budgeting, or debt management, so you feel more confident and empowered.

If you need to, seek support from financial professionals or mentors who can provide guidance and accountability. Challenge yourself to take at least one small action every day towards your financial goals, so you can build momentum and reduce procrastination.

Personally, to keep myself motivated I remind myself of the consequences of not taking action (not achieving my goals) and also of the benefits of making timely financial decisions.

5. Not investing

A really bad financial decision is deciding not to invest your money at all. But if you don’t invest, your money will not grow. And you need it to do so to afford the things you want in the future, like retirement.

If you think you must be an expert in the stock market to invest, think again! There are plenty of options, and with technology, learning how to start investing has never been easier.

How to start investing:

You can invest in the stock market, try real estate investing, or invest in a business. Whichever route you choose or if you decide to go with all three, it is critical that you do your research and understand the basics of what you are putting your money into.

The stock market can seem like gambling or a big scary place, but not if you know what you are doing and have investment objectives.

The returns on the stock market average about 10% over the long term and it’s one of the most popular forms of investing out there.

If you’re not confident about investing or don’t understand things like the difference between ETFs and index funds you can always seek help from a financial advisor. Advisors help you set up an investment portfolio based on your risk tolerance and individual situation.

You can also learn a ton about investing by enrolling in our completely free investing course!

Remember that the key to successful investment portfolios is diversification! So, be sure to have a diverse portfolio to ensure you are investing wisely.

6. Not having a backup plan

Not having a backup plan is a pretty bad financial mistake. Having a backup plan protects us from unplanned and expensive life occurrences.

For you to have a positive relationship with money, you need a backup plan—a solid one.

How to establish your back up plan:

Two of the most important aspect of your back up plan are having a fully-funded emergency fund (3 to 6 months of basic living expenses) and ensuring that you have the right types of insurance (health, auto, life, disability, home, renters etc.).

To fund your emergency savings, build it into your budget and put money toward it each time you get paid. Next assess your current life to determine what insurance gaps you have.

For example, do you rent an apartment but don’t have renters insurance? Do you need to increase your health insurance or auto insurance coverage?

Having these things in place will literally save you when life happens and help you maintain your financial plan.

You’ll have money to fall back on rather than having to leverage debt or lose all your savings and investments to cover your situation.

7. Not protecting your personal information

In today’s internet world, identity theft and credit fraud are rampant, and not taking the extra measures to protect your personal and financial information can be a bad financial decision.

So much of our specific information like address, date of birth, and more is information scammers and hackers can easily find due to so many data breaches in recent times.

How to protect your personal information:

Protecting yourself is simple once you get set up. It means staying on top of your credit reports, not entering your data on websites you don’t trust, and putting alerts or freezing your credit cards and credit profile.

Many banks and credit card companies also offer free credit monitoring services. I strongly recommend you take advantage of this.

8. Ignoring the small goals

Think saving $15 a week or paying $20 to your credit card this month isn’t worth noting? As insignificant as those mini goals might seem, they matter.

They can add up a lot over time. In my opinion, our small goals are what help us accomplish the bigger ones because they allow us to get started.

How to focus on your small financial goals:

Some specific examples of small financial goals include things like:

• Establishing a $1,000 emergency fund
• Making an extra payment on your credit card each month
• Finding ways to cut back on certain monthly expenses
• Contributing to your retirement savings account
• Improving your credit
• Exploring side hustles

And remember that having long-term goals is essential to defining your big picture. We all love those yearly goals.

However, if we don’t break these goals down into smaller chunks it’s easy to get overwhelmed. As a result, we’ll feel like we’re making no progress at all.

I like to make long-term goals along with short-term ones. Then, I keep my day-to-day focus on my short-term goals, and I find great progress that way.

9. Lack of accountability

When you have no personal accountability, there is no one to motivate you, remind you, or keep you focused on what you are trying to accomplish.

As a result, you might start getting complacent, putting things off, and finding yourself in the perpetual state of getting things done “later” or, worse still, telling yourself you can’t do it.

How to be accountable:

It’s important to adjust your circle of influence if necessary and get the accountability you need.

For me, this means sharing my financial goals and dreams with a trusted friend who will encourage me and ask about my progress. It stops me from making poor financial decisions.

10. Not checking in on your progress

How do you make progress with what you don’t track? You won’t know when you’ve achieved a goal or hit a milestone.

How to track your progress:

Checking in on your goals is a must. It could be as simple as creating a schedule to check in on your goals, noting both short and long term ones. One great way to do this is to use a planner.

For me, a goal planner can really keep me motivated and focused. It allows me to add a timeline for my goals and record them.

11. Not caring about your credit score

Perhaps you’ve made the mistake of getting into a lot of credit card debt or even missing loan payments. These things can negatively affect your credit.

Your credit can be rebuilt, and while it isn’t everything, it does matter. For instance, you need decent credit to get a mortgage and get a good loan interest rate.

How to stay on top of your credit score:

I like to keep an eye on my credit score and try to improve it as much as possible. Utilizing a free service like Credit Karma to check and monitor your score can be beneficial.

In addition, I recommend avoiding debt as much as possible. Budget and create a plan to pay off anything you spend on a credit card each month so you don’t carry a balance. Doing this will allow you to reach many of your goals more easily.

12. Buying things brand new that you could buy second-hand

Have you ever bought something expensive that is brand new without shopping around? I know I have! The problem is that you could be spending more money unnecessarily when you could have potentially found the same thing for less if you went the second hand route!

What to consider buying secondhand or pre-owned:

For instance, items like furniture, appliances or cars can be cheaper if they’re secondhand in some cases. Or perhaps you want to purchase a designer purse. You may be able to get a good deal on a pre-owned designer handbag and save hundreds!

Although buying used isn’t always the way to go, depending on the item’s condition, it can often be a good choice. When you save money on expensive items by checking for deals, you can use the money you save for other financial goals.

When I shop second-hand, I like to look for items in “like new” or “excellent” condition. This way I know I’m getting value for my money and not just buying something with little value left.

13. Not sticking to a budget

Budgets are a great way to improve our finances, but sometimes, it’s easy to ignore a money plan like this. When we make a budget and don’t follow it, our future selves will pay for it.

Not following a budget can lead to a lack of funds for emergencies, being unable to retire when you want to, feeling overwhelmed by debt, and more. To avoid this, create a budget and promise yourself you’ll stick to it, or start working on better budgeting if you already budget.

How to stick to a budget:

First things first, it’s all about finding a good budgeting method. Finding a budget that works for you might take time, but when you do, you’ll be able to take full control of your money and make real progress.

One you determine your budgeting method, write out your expenses and your income. Then, determine how much your essentials cost each month and what is left over afterward.

Additionally, make a plan for what you’ll do with any money left over. You can make your budget as detailed as you want, but this is a very easy way to begin.

But remember, making a money plan is easy. Sticking to it may not be. So, decide how to handle it when you want to overspend.

You might try using a reward system, getting accountability, or whatever works for you to help you stick to the plan you made.

14. Forgetting to celebrate

It’s easy to think that you should only celebrate the big things or forget to reward yourself for your progress. But it’s what keeps you motivated!

Even if your progress was small it doesn’t mean it’s not worthwhile. Celebrate all victories, no matter how big or small. Not everything you do will result in massive strides, but it all adds up and gets you closer to where you want to be.

And your financial life isn’t going to be just the big moments. There are many smaller things to celebrate, such as paying off a credit card, sticking to your budget for a month, or saving up a few thousand dollars.

How to celebrate your wins!

Celebrate yourself by journaling about your financial victories, cooking a favorite meal, or taking a day or weekend for yourself. It makes everything more worthwhile.

15. Not getting back up after you slip

Don’t settle for a situation because you made a mistake, caught yourself over spending, or bought something you shouldn’t have. Slip-ups will happen. Give yourself the grace to recognize your error or mistake, remember your why, and get back to work!

How to get back up after a slip:

Know that you are not the first or last to make unwise financial decisions, and the important thing is the progress you make over time. One slip-up doesn’t make or break your money goals forever – your daily habits are what matter most.

The worst thing you can do after a mistake is give up. The best thing is to simply try again. So dust yourself off, remember your “why”, review your goals and get back it!

Expert tip: Focus on life beyond your finances

How we handle money is important. But I find that it’s best to keep things in perspective, especially if I feel I’ve made a money mistake. While unwise financial decisions can slow our progress, there’s a healthy way to think about our mistakes.

First, realize what your mistake was, assess the lessons, and then make a plan to recover from it. After that, it’s best not to dwell on your finances all the time or make them overly important.

Remember to enjoy your life and focus on the positive as you work towards a solid financial foundation.

How to recover from bad financial decisions

We have all made mistakes, and sometimes, that includes making bad financial decisions. But don’t beat yourself up over it!

Thankfully, there are plenty of strategies and ways to recover from a past financial mistake. Here are some tips to help you make smart money choices!

Step 1: Acknowledge your bad financial decisions and forgive yourself

To get ahead, you have to forgive yourself for your money mistakes.

So take note of the important life lessons you’ve learned and keep moving. Everyone has made some bad management decisions around their money – even the world’s wealthiest people.

It’s all about acknowledging where you went wrong and figuring out what to do to make things right. Even if you make the same or similar mistake again, you can rinse and repeat (acknowledge, learn, and implement the lessons) until you get past your error. That is how you will succeed with your finances.

Once you’ve committed to forgiving yourself and are ready to move forward, it’s important to recognize where you are with your finances right now. Then, you can determine where you would rather be.

Step 2: Decide it’s time to take action towards changing your financial situation

Once you’ve decided to make good financial choices, put a plan in place. And you don’t have to wait for January. You can start today.

Reduce your spending, expenses & debt load, see if you can boost your income, and make saving money for your future self a priority. All these things will put you on the path to creating a solid financial plan.

Be willing to change and be committed to seizing the moment to start working on revamping your finances.

No more waiting for the perfect moment to sort out your finances. Start now. This means if you can only save $5 a week right now, save that $5.

If it means you can only put $10 towards your debt this week, make that $10 payment. Then, start figuring out how to reduce your expenses and earn more so you can ramp up your savings or debt repayment plans and get back on track with your financial goals.

In addition, identify any spending triggers and devise a game plan to avoid them and minimize the slip-ups!

Your money situation will always change, so look at it as a financial journey. As you save more money, pay off debt, and increase your income, it will be much easier to recover from any past bad financial decisions you made.

If you need help, you could also work with reputable financial advisers or tax professionals depending on your needs. A great attorney for legal advice should also be on your list. Be sure to look into the background of your financial professional to ensure they are a good fit for you beforehand.

Step 3: Get motivated and shift your circle of influence

One of the best ways to begin making smarter money choices is to learn from others. So, start reading personal finance and personal development books and blogs.

Listen to podcasts and watch videos. Surround yourself with people who will motivate you to do better and keep going even when you have bad days.

Make it your mission to shift yourself away from your circle of influence if it is of no benefit to your goal of financial success. Remember, bad financial behaviors from others can affect you, so choose your associations wisely.

4. Define your goals and make them easy to accomplish

My next piece of advice is to define your goals for correcting a financial mistake and then make it very simple to stick with it.

For instance, put your goals where you can see them. A calendar or planner works well!

Next, automate savings, bill payments, debt payoff, etc. It’s one of the simplest ways to ensure success.

Last, find other ways to stay motivated. Talk to your accountability partner, read money books, etc. (Hint: Take our completely free Clever Girl Finance courses), and decide that you will succeed!

5. Be okay with failure and remember to keep trying

It’s completely okay to fail sometimes! The silver lining behind it is the important life lessons you will learn. Take the lessons and apply them to your next steps.

Know that no one is perfect and no one gets everything right with their finances every time.

Most of all, do not give up. Continue to work towards improving your money.

What is considered a bad financial decision?

A bad financial decision is one that throws you off course from your goals or negatively impacts your finances. Some common ones are credit card debt, not saving anything, and overspending.

If you have made poor financial decisions, don’t panic. Simply make a plan to fix them and get back on track. It may require time or financial sacrifice, like a stricter budget or a money savings challenge, but the rewards are worth it!

What is the best financial decision?

One of the best financial choices is to save and invest money for your future self. Saving for our future helps us all to be prepared, and investing allows us to make more money over time.

We all need money to help us with expenses, emergencies, and retirement. Saving and investing allow us to prepare for these life changes and be confident in our ability to thrive with money.

Why do people make poor financial choices?

People may make poor financial decisions for various reasons, including emotions, a lack of financial knowledge, or a lack of planning.

For instance, you might go into debt if you have an emergency expense to pay for and no savings. Or perhaps you don’t know how compound interest works, so you neglect investing in your financial plans.

Knowing financial literacy basics and being ready for expenses are both very important. And anyone can learn how to handle finances and make good money choices, given time and the resources to succeed.

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Now that you’ve learned how to recover from a financial mistake check out these posts for more information!

• I Don’t Want To Work Anymore! 14 Ways To Recover From This Feeling
• 12 Signs You Have A Shopping Addiction. What To Do
• How To Avoid Or Recover From A Shopping Binge
• How To Use A Pros And Cons List For Big Financial Decisions

You can recover from bad financial decisions!

It might feel like there is no light at the end of the tunnel, your debts are so large, you are so behind in your career, and/or you cannot recover from your mistakes. But remember, the only way change happens is by taking the first step and then the next step.

You can totally do this.

Take stock of your finances, learn how to budget, and start saving and paying off your debt. Before you know it, you’ll be on your way to getting your financial house in order and making better money management decisions!

The post The 15 Worst Financial Decisions And How To Recover From Them appeared first on Clever Girl Finance.

Losing a job is scary for anyone—especially if you haven’t attained financial independence. Not only do you have to figure out how to live without a job, but there’s the added stress of having to find a new one. Though it can be daunting to navigate unemployment, it is possible. Keep reading to learn how.

Here are some key tips for managing your money when you are in-between jobs.

1. Cut back on your expenses

When it comes to how to live without a job the first thing we should all do is to reduce our living expenses by cutting our budget. This includes what we spend on housing, food, and other living essentials. These costs usually take up most of our income, so reducing them will help our money go much further.

Get rid of non-essential spending

Many times, we include things in our budget that we don’t need. These are luxuries that we treat ourselves to but aren’t necessary expenses.

So, when you need to figure out how to survive without a job, it helps to start with your non-essential items.

Some non-essential items to consider eliminating include:

• Subscription services
• Shopping
• Dining out
• Nail & hair appointments
• Entertainment
• Vacation

You can always go back to splurging on these things once you’ve established yourself in a new job. Or, you may find that you don’t want to incorporate them back into your spending.

Save on groceries

Food is another big expense that can cause stress when finances are tight. Of course, you need to eat, but you may have to change what you’re eating and where you’re getting it from.

Here are a few simple ways to reduce food spending and start grocery shopping on a budget.

1. Meal plan

Meal planning is when you create a menu for what you’ll eat for the week. It allows you to shop specifically for those ingredients without wasting money on others you don’t need. I like to think of budget meal planning as having a budget for my food. It’s something I’ve learned how to do consistently to save money over time.

2. Meal prep

When you meal prep, you prepare all of your meals ahead of time. It not only allows you to save time, but you save money by not buying fast food or dining out.

Meal prep helps eliminate the need to buy extra food because it’s already available. And to save more, you can create frugal meals.

Sunday afternoons are the perfect time for me to do my meal prep to prepare for the week ahead. So pick a time where you have a few hours to spare to prep and cook your meals for the week.

3. Use coupons

If you haven’t used coupons for groceries before, now is the time. Look through the best coupon websites or in grocery store’s weekly ads. Saving a few dollars can go a long way.

I make it point to browse my grocery store app for sales and do a quick online search for coupons before I go food shopping.

You can also try to find coupons for all your other shopping needs e.g. for clothing, personal care items, cleaning products etc.

Reduce utility costs

Utilities include the cost of electricity, water, gas, and more. These costs typically fluctuate throughout the year based on the season and are determined by usage.

However, we can all do our part to reduce costs by monitoring our usage.

Simple things like turning off lights when they’re not in use, not idly running the water, and even turning off our heating or air conditioning while we’re away can make a difference.

Implementing these small changes can help reduce your monthly costs while you figure out how to live without working.

Get a roommate if you have the space to spare

The easiest way to reduce living expenses is by cutting them in half.

You can do this by getting a roommate. A roommate can help share some of the expenses and split rent bills so that you can save your money while finding a new job.

So if you know someone looking for accommodation and you have the space to spare, consider renting a room to them.

2. Contact lenders and creditors

Without a job, the priority is ensuring you have your essentials covered. That means any other expense, including debt, should be reduced, eliminated, or deferred.

In addition, as you navigate how to live without a job, you can always contact your lenders and creditors to work out payment arrangements.

Here are some specific things you can do if you are unable to pay your bills.

Ask to defer payments or do a hardship plan

Your lenders can arrange to defer your credit card debt payments due to a job loss.

Your payments will be paused and resumed at a later date. This can be a great help if you are figuring out how to live without a job.

Deferring payments or a hardship plan could apply to credit card debt, car loans, student loans, etc. You may also look into mortgage forbearance if necessary.

Ask for a reduced minimum payment

You may also ask to have your minimum monthly payments reduced. Though this may mean that the length of your debt repayment is extended, it can temporarily relieve you of some expenses.

Ask to reduce or temporarily remove interest

The interest on loans makes the payments significantly more than the original loan amount. Lenders can also reduce or temporarily remove interest so that you don’t accrue more debt and have a smaller payment.

3. See what benefits you qualify for

You may be able to qualify for some benefits, that can assist you with income as you plan out how to live without a job. Most governments and community organizations have assistance programs to help in these situations. See below:

Ask about severance (if not communicated)

Before leaving an employer, knowing if you will receive a severance package is important. A severance package is a financial payment and other benefits extended to an employee who has been laid off. The amount is usually based on your time with the company, and not all employers provide it.

Check with your human resources department or employer to determine if you will receive this benefit.

Apply for unemployment benefits

If you have been laid off from your job at no fault of your own, you may qualify for unemployment benefits.

Each state has different requirements; however, the premise is that you will receive a percentage of your former salary as you look for a new job.

Consider government assistance programs

If you still cannot afford your basic life necessities, the US government has assistance programs. Specifically, there is the Supplemental Nutrition Assistance Program (SNAP), which provides food assistance.

The program provides financial assistance to help people pay for food for themselves and their families. Each state has different requirements to apply and to determine eligibility.

You can find out more on the SNAP website.

Several rent assistance programs are also available if you are struggling to keep up with paying your rent.

You can also explore your state’s Temporary Assistance for Needy Families (TANF) program.

Consider continuing health coverage

Your previous employer likely provided your health insurance coverage.

So once you became unemployed, you also lost your health insurance coverage. For these situations, leverage COBRA.

The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows you and your family to remain on your employer-sponsored health plan for a limited time after your employment status has changed. With COBRA, you will be required to pay the monthly premium that your employer subsidized.

You should research your individual situation to see if the cost of continuing your health coverage is cheaper/better than finding insurance elsewhere. It could be more expensive to keep your old employer’s insurance. Every bit of money you can save counts when you’re figuring out how to survive without a job

4. Find ways to make side income

How to live without working is a big question for anyone to answer, and supplementing income will be crucial. Even with taking all of the steps to reduce expenses and get assistance, you may still want to bring in another income stream as a short-term solution.

Here are some ways to make money without a job.

10 side gig ideas

Starting a side hustle or gig is nothing unusual in this day and age. Even those with full-time jobs sometimes find it necessary to take on additional work to make ends meet.

These flexible gigs are great for extra money, especially if you’re figuring out how to live without a job. Even if the income from your side gig is lower, it’s still worthwhile because it brings in something.

Some might even consider becoming self-employed as a part-time gig. There are plenty of options to be your own boss, from internet jobs like starting a blog or becoming a writer to opening a cleaning business or doing yard maintenance.

Check out these ten ideas for side gigs if you aren’t sure where to start:

1. Food and grocery delivery

Many people don’t have the time or resources to go to the grocery store, so they hire someone to bring their food to them. You can do anything from delivering pizza to shopping and delivering groceries with a company like Instacart.

2. Car share driver

Drive for Uber to pick up some extra cash. It’s a fun way to make some money and help people to get around your city easily.

3. Virtual assistance

Help others to stay organized. General virtual assistant skills include making schedules, answering emails, and handling administrative tasks.

You can work from home and make an income. Use this list of the best virtual assistant companies to help.

4. Freelance marketing

If you excel at content creation and social media, consider freelance marketing. Building up a list of clients may take some time, but you can probably work from anywhere and make a good side income.

5. Server

If you’re social and like a fast paced job, becoming a server in the evenings or on the weekend can be the perfect thing. Check your local restaurants and see who’s hiring, to help you with how to live without a job.

6. Graphic design

If you are an artist or designer, graphic design is easy to do as a side hustle. You can get started by signing up with Upwork to find clients who need design work for their businesses.

7. Pet sit

Are you an animal lover? Pet sitting is not only fun and fairly easy, but it can pay well! Watch people’s pets while they’re away on vacation.

Start dog walking or sitting in your neighborhood using apps like Rover.

8. Deliver newspapers

Yes, newspaper delivery still exists! Check with the circulation department for the paper to see if they need someone to deliver. It’s a good way to enjoy the fresh air and make some money.

9. Sell crafts or handmade goods

If you have a flair for all things creative, making crafts or handmade items to sell can make you a good side income! Try setting up an online store or even selling at local craft fairs. Sell candles, knitted blankets, or any other items you are talented at making!

10. Rent out your car or parking space

If you have a car you don’t use much, or a parking space you don’t need in a busy city, both can make you money, and with little effort. Rent out your car on days you don’t need it using Turo. And if you want to rent your parking space, check out Neighbor.

There are tons of other ways to make money online and in-person. We even have a book dedicated to helping you build your side hustle.

Find something that compliments your skills and available resources, and start making extra cash!

Sell unused items in the house

A simpler way to earn extra cash is to sell unused items in your house. Platforms like Amazon allow you to sell these goods online.

No need for a yard sale when you can simply post your listings on a site. Of course, if you want quick cash, then having a yard sale is always a good option.

Airbnb additional space in your home

Those of us with extra space in our homes may consider advertising our homes on Airbnb. We can temporarily rent out our spaces to travelers to help subsidize our expenses as we figure out how to live without a job.

It’s important to be cautious when considering this as an option. Nonetheless, Airbnb has proven to be a viable solution for making additional income.

You can also choose the schedule you want for guests in your home. And remember, it doesn’t have to be a long-term solution, but just something to get you the amount of money you need for now.

Expert tip: Prioritize your health to reduce stress

Figuring out how to live without a job can be a stressful and challenging experience. Though there are steps that we should take when considering our finances, our health is equally important.

When I need to process how I feel about something, I like to spend time journaling or talking to a trusted friend.

In addition, I prioritize exercising and eating well. Doing this keeps my physical and mental wellness in a good place, which can be especially helpful if you are processing the loss of a job and income.

How do I cope without having a job?

When you are coping with something like job loss, it’s important to focus on the positives and what is within your control.

For instance, you can apply for a certain number of new jobs each day and engage in meaningful tasks and hobbies to keep your spirits up.

You might try gardening, yoga, spending time with loved ones, and other enjoyable pastimes.

Focus on bare-bone budgeting, being frugal, and continue to look for opportunities to make extra income.

What to do if you are broke and unemployed?

If you are broke and unemployed, the first step is to create a more secure financial situation. Once you do that, you’ll have breathing room to think about what’s next.

Start by selling items around the house, take on a side job, or get a roommate to earn an income.

If you have to leverage debt until you find a new job, be as frugal as possible and stick to a budget. Once your income is restored, you can lay out your plans to start paying off this debt.

Be intentional about looking for a new job and networking with friends and past colleagues. Soon, you’ll be back on your feet and earning a paycheck again.

How long can you be unemployed?

How long someone can be unemployed depends on their financial situation. Those who have a large emergency fund or a second income may be able to be unemployed indefinitely or for several months without much of a problem.

However, others who don’t have much savings and rely on a single income will need to find a new job quickly to avoid going into debt or having financial struggles.

I think it helps to create a financial buffer while employed, if possible. Having extra money helps us to avoid feeling stressed should something happen with our current job.

If you are currently unemployed and desperately need to bring in cash, you can consider taking on a short term job, even if it’s below your skillset, to help you get by in the short term.

Articles related to jobs and unemployment

If you found this advice about living without a job helpful, check out these other great reads!

• The Importance of Savings: How I Lived A Year Unemployed
• How To Deal With Long Term Unemployment
• Where To Find Rent Assistance For Single Moms
• Key Resources And Money Tips For Low-Income Families

Final thoughts on living without a job

There are many things that we can do to lessen the financial burden of how to live without working. So consider each of these tips and utilize them.

Additionally, remember to spruce up your resume, learn new skills (there are so many free resources online), and network to help you find a new job quickly.

You can always join our community and take our free financial courses to get help and support as you navigate your transition. Remember, when it comes to how to survive without a job, you can weather through it.

The post 4 Tips On How To Live Without A Job appeared first on Clever Girl Finance.

If you are in debt, you are not alone. In addition to all of the resources available to help you develop your own plan to get out of debt, there are public agencies that can offer assistance, too. If you’ve never heard of this option, you may be wondering, “how does consumer credit counseling work?” Well, let’s get into it!

What is consumer credit counseling and who might need it?

Consumer credit counseling services offer financial education and assistance with debt management as it relates to using credit. Trained and certified coaches meet with anyone who wants help to develop a financial plan to pay off debt.

These people understand all of the available options and can recommend the best one for your unique situation. The best part? These services are usually free.

For-profit and non-profit counseling services

When it comes to actual services, there are both for-profit and non-profit counseling services.

For-profit credit counseling agencies charge fees for their counseling services, which means their plans are generally more expensive.

Non-profit credit counseling agencies, on the other hand, are supported mostly by grant money from government agencies, credit card companies and financial institutions that help to provide financial education. They may also be funded by some consumer fees credit card companies collect.

These companies provide non-profit agencies with funds to help their individuals get out of debt. Because they are funded through grants and not fees alone, non-profit agencies are usually free. However, sometimes they charge fees for certain services.

How do you know if you are a good candidate for credit counseling?

Anyone who is in debt, in particular credit card debt, can consider credit counseling. If you have recently lost your job, are experiencing a reduced income, or are living paycheck-to-paycheck, it might be for you.

Anyone who uses credit cards for all of their expenses but cannot pay off their balances in full every month is also a good candidate for counseling.

While focused on debt-relief solutions, these services aren’t just for those in debt. You can work with a credit advisor to develop long-term financial goals, such as saving for a house down payment, planning for a large purchase, or building up your emergency fund.

These are all goals that I personally have and a good credit coach can help you come up with a plan to achieve these goals, too!

No matter your financial situation, consider meeting with a certified credit counselor to determine if you are a good candidate for their services. The great thing is that a meeting with this trained representative is free, so you have nothing to lose by giving it a shot.

A step-by-step guide on how to use consumer credit counseling

Most people have no idea that there free services out there that can help them get out of debt. And so to explain, here’s a step-by-step guide on how you can leverage consumer counseling services.

1. Select an agency and schedule a free counseling session

First, you’ll need to select a credit counseling service. (We have some tips below on how to find them and decide which service is right for you.) Once you have selected one, you will make an appointment to meet with a certified counselor, either by phone or in person.

Non-profit counselors receive extensive training and are certified to counsel on many aspects of debt management.

2. Prepare for your meeting

If you prepare for your initial counseling session, you’ll get the most out of it. The goal of this meeting is to give the advisor your entire financial picture so that they can help you, so it’s best to be honest and forthcoming about everything.

Before your meeting, you’ll want to gather together the following:

• Income: Your paycheck or other proof of income, including withholding amounts and take-home pay.
• Expenses: An estimate of your monthly expenses.
• Debts: A list of your monthly payments, interest rates, and other loan terms for all car loans, student loans, mortgages, personal loans, and any other loans.
• Credit cards: A list of your credit cards, including information on your balances, interest rates, and monthly payment dates for each.

The preparation alone is beneficial since knowing what you’re spending and earning is essential to managing your finances well.  

3. Review your finances

During your credit counseling session, you will go over your finances in detail with your advisor. Together, you’ll review your income, expenses, debt, and any other payment obligations. During this time, you will also authorize the counselor to run a credit check on you.

This soft inquiry will not impact your credit score but will allow your coach to see if there is anything on your report, such as debt in collections, that they need to know to understand the full picture of your finances.

4. Review your options for relief

Based on your session, your credit consultant will discuss your options. Your counselor might suggest how you can budget or reduce your expenses (maybe with a low-buy year) to pay off your debt as quickly as possible.

If your current income is not enough to pay off your debt, a counselor might recommend another type of counseling, such as a Debt Management Plan (DMP).

When a DMP is put in place, your credit card companies agree to reduce the interest rates on your credit cards, which means you end up paying less money over time.

Non-profit credit counseling can negotiate credit card debt with your credit card companies on your behalf to reduce your interest rates.

In return, they will likely ask you to close certain cards and continue to make your monthly payments. It usually costs about $75 to set up a DMP, along with a monthly service fee of about $25 to $55, according to Debt.org.

Another option is bankruptcy counseling. Many services offer credit counseling for anyone going through bankruptcy.

If you plan on filing for bankruptcy, getting credit counseling is mandatory, according to the U.S. Department of Justice.

If applicable, your counselor might suggest that you enroll in housing counseling or foreclosure prevention counseling. There, you can learn about better budgeting, mortgages, taxes, and more related to homeownership.

Lastly, if student loans are a factor, look into student loan counseling. A certified counselor can analyze your finances and provide you with information on student loan repayment plans or options.

5. Decide on a plan

Non-profit credit counselors are required to review all of your options with you. After doing so, they’ll make a suggestion as to which one is the best for you.

However, it’s always up to you to decide which course of action to take.

A good counseling service will offer an unbiased opinion so you can be confident you are not being led astray.

Don’t forget to ask questions about all the solutions offered and choose a financial plan that makes sense for you. While they are the experts, this is still your debt and your life, so the decision is ultimately yours.

6. Educate yourself

What is credit counseling? It’s a way to learn your options for debt relief. Now you know what to expect before meeting with a credit coach.

Ideally, at the end of the meeting, you will have a concrete plan to tackle your debt and you will be on the road toward living debt-free. But that might take some time, and your counselor is only there for guidance—not to force you into a decision. 

In the meantime, take advantage of the free resources the counseling agency offers so you can continue to educate yourself and build good money habits. You can also check out the public library, financial websites, and other free resources to help you find strength to work through financial challenges.

Expert tip: A credit counselor can help with more than debt management

For anyone struggling with debt and unsure how to move forward, seeing a certified nonprofit credit counselor is a great place to begin. 

These often-free services can help you get a clear picture of your finances, including debt. Then these trained representatives can explain the pros and cons of the various options for dealing with your debts. 

Creating a budget, analyzing your credit report, learning how to pay off debt, and learning how to manage your money effectively are some ways the counselor can help. 

Where to find a reputable credit service

Fortunately, there are several avenues you can follow to locate a trustworthy credit counselor and avoid falling victim to scams. 

National Foundation for Credit Counseling

The National Foundation for Credit Counseling, or the NFCC, offers one-on-one assistance with getting your finances back on track. NFCC representatives recognize that debt can affect anyone and will help you develop your personal plan of action for getting out of debt. 

A nonprofit organization, the NFCC has 250 agency locations and over 1,200 certified credit counselors to assist you. They can help you with managing your debt, organizing your budget, following the steps to prepare for a mortgage, and avoiding a foreclosure. 

Although the NFCC isn’t accredited by the Better Business Bureau, it does have a rating of A+ on the website. 

Financial Counseling Association of America

Another reputable credit counseling service with available certified credit counselors is the Financial Counseling Association of America (FCAA). Member agencies offer assistance like other credit counseling organizations; they can assist with debt management, budgeting, and other financial needs. 

How does consumer credit counseling work with the FCAA? A session with one of the nonprofit-trained representatives through the FCAA is free, and you aren’t obligated to enter into a debt management plan (DMP). If you’re having trouble deciding which of your bills you can pay this month, credit counseling can help guide you to a solution. 

Credit.org

Here’s an organization that will offer services like budget counseling, student loan counseling, debt relief, and housing assistance. Credit.org is accredited and carries an A+ rating with the Better Business Bureau. 

As one of the NFCC-affiliated agencies, Credit.org is a nonprofit credit counseling service. They even offer housing guidance through HUD Certified Counselors, along with assistance in budgeting and debt relief. 

American Consumer Credit Counseling

You might also check with the non-profit American Consumer Credit Counseling (ACCC) for help in getting out of debt and getting payments under control. 

One downside of the ACCC is that it’s not a free service. According to their website, you’ll be charged $39 once to enroll, plus a $7 maintenance fee. You may be eligible for a fee waiver if you’re in the U.S. military, in financial hardship, or live in a state that covers these types of fees. 

The ACCC does offer services and some of its financial education materials at no charge. It’s also notable that it offers bilingual services for Spanish speakers. 

You may want to check the Better Business Bureau rating of any specific ACCC agency before working with them, but the ACCC itself is accredited and has an A+ rating.

Credit Counselors Approved by the U.S. Department of Justice

You can also use the U.S. Department of Justice to help you locate a reputable counselor. Check out their extensive list of approved credit services to find exactly the assistance you need. 

Simply search by your state of residence to locate agencies that are approved to provide certified credit counseling to you (their address may be in a different state, FYI). Many of the approved agencies offer both English and Spanish-speaking services, and you can even search to learn if any agencies provide service in other languages. 

How credit counseling can help you

Are you still asking yourself, how does consumer credit counseling work? Then, let’s talk about the primary ways a counselor may be able to serve you. 

Budgeting

Even people who don’t have a large amount of debt may benefit from working with a credit counselor. Budgeting is one of the potential services a credit counseling service can offer. 

Your budget is your plan for how you’ll spend the money you bring in every month. So, if you need a better budget (or you’ve never strictly followed one), working with a budget counselor can help you take action. 

You might need help figuring out how to prioritize payments, ensure you’re not missing any bills, or cut unnecessary spending. Your credit counselor can help you see where you need to make changes and what you’re doing well. 

Money management

A credit counselor can be beneficial in advising you on money management. It might go beyond basic budgeting, as you may have more complex needs than how to allocate your funds. 

Financial management can be tricky, especially if you’re dealing with debts as well as cash flow issues. You can get guidance from your credit counselor about how to work with your creditors to pay off debt efficiently, save an emergency fund, and more. 

Examining your credit report

One thing many people aren’t aware of is how to obtain a copy of their credit report. When asking, “What is consumer credit counseling?” you’ll learn that this is one facet of their services. 

A counselor can show you how to get access to your credit report and your current credit scores. Plus, they can teach you important information about what those scores mean. 

Learning what lenders and others see when they check on your credit is key to getting your finances on the right track. Your credit counselor will be able to look at your credit report and draw your attention to anything like a neglected loan payment. 

Finding out your credit score is essential if you need to get a loan for a small business, a car loan, a mortgage, or other type of loan. If your credit score has dropped, you can talk to your counselor about ways to raise it. 

Managing your debt

One of the primary reasons people seek out counseling is unmanageable debt. If your debt has gotten away from you, whether due to uncontrolled spending, having to negotiate unforeseen medical bills, job loss, or any other reason, credit counseling can help. 

Certified credit consultants may discuss a variety of strategies for handling debt. They should not shame you for being in debt but help you examine your situation and choose the best course of action. 

You might find that starting a side hustle, weekend side job, or tightening your budget could be enough to help you start reducing your debt. Another option may be to even sell off some assets, if you have any that you can do without.

However, some people may choose to enroll in a debt management plan, or DMP. 

Debt management plan (DMP)

A debt management plan is a stricter option that you may find helpful.

However, make sure that this is the right option for you, as there are other ways to pay off debt.

How DMPs work

Your counselor communicates with your creditors to arrange a new payment plan. The plan may include a single monthly payment to the organization rather than to multiple creditors. 

A good debt management plan should have lower monthly payments and lower interest and fees.

However, beware of fraud when looking into DMPs. You don’t want to send payment to the agency only to find that they never approved the DMP with your creditors. 

Find out how a debt management plan may affect your credit as well.

Although you’ll pay off the debt eventually, these are primarily for unsecured credit, such as credit cards, and you’ll typically close any accounts under the DMP. It can affect your credit by decreasing your credit history. 

How do you select a credit counseling service?

Aside from choosing between for-profit and non-profit services, there are other things you should consider when selecting a counseling service. These are the key things to look out for when making your choice:

Check their certification

First, make sure whatever service you are considering is certified. Any reputable agency will be certified by either the National Foundation for Credit Counseling or the Financial Counseling Association of America.

Learn about what services they offer

Research exactly what services the agency offers. Beyond the free counseling service, what else is available? Most agencies have an abundance of free resources that can prove invaluable on your journey to getting rid of your debt.

Check, too, what paid services they offer. It’s better to go into your meeting knowing what your options might cost than to be surprised by how much your solution ends up costing you. 

Your credit counseling agency may offer student loan counseling, financial skills workshops, budget counseling, and a variety of other services. They can analyze your current assets, income, and goals to provide helpful guidance. 

Ask about fees

Counseling should always be free, but even non-profits may charge for additional services. There are, however, organizations that never charge for their services. If you don’t have the assets or want to pay, you can certainly find free counseling services. 

For example, Operation Hope is a non-profit organization that partners with financial institutions to provide free financial programs to help individuals take control of their money.

Avoid shady offerings

If a credit counseling service is offering something that seems too good to be true, it might be. Run from any that makes false promises, such as guaranteeing something like a change in your credit score (nobody can guarantee that). 

Credit counselors can’t promise to erase all of your debt. They also don’t typically lower the total you owe; instead, they help to lower your payments. 

You should also confirm ahead of time that the agency will provide you with all of the debt relief options available (non-profits are required to do this, while for-profits are not). You don’t want to choose an agency that will only suggest solutions for which they charge a fee.

What makes a credit counselor credible?

A credible credit counselor or organization will usually:

• Offer free educational materials. 
• Be accredited with the National Foundation for Credit Counseling or the Financial Counseling Association of America
• Be in good standing with the Better Business Bureau

They should also not urge you to go into a debt management plan without ensuring it’s the best option for your situation. 

What is a risk when using a counseling service?

Some services have been flagged by the FTC for defrauding people, so you need to carefully vet the agency before working with them. Be careful that you’re using credit counseling, not a debt settlement company. 

In addition, entering into a debt management plan can be risky if you don’t work with a legitimate agency to do so. Be sure to confirm with all creditors before sending payment under a DMP so you don’t miss payments with them. 

What is the success rate of credit counseling?

The rate of success depends on what your goal outcome is, but according to Nerd Wallet, only around 55% to 65% of those who enroll in a debt management program successfully complete the program.

However, there are many other successful outcomes to aim for. Decide beforehand: What is consumer credit counseling to you? 

You may use student loan counseling to choose the best repayment strategy, for one. Or you may find yourself sticking to a budget for the first time, improving your credit score, or receiving lower interest rates on debt. And attending money management workshops can set you up with the knowledge you need to succeed in life. 

Articles related to credit and counseling

If you found out more about credit counseling from this article, read these other posts next for more information!

• What To Know About How Financial Counseling Works
• What Is Budget Counseling And How Does It Work?
• 7 Tips For How To Negotiate Credit Card Debt
• How Does Credit Work? Here’s What You Need To Know

Getting out of debt can be easier when you have help!

Dealing with debt can feel embarrassing, but it shouldn’t be this way. Tackling your debt doesn’t have to be a solitary experience. And what’s more surprising, you don’t have to spend money to get the help you need. 

With the right credit counseling service on your side, you’ll be able to develop a free or inexpensive plan to get yourself out of debt once and for all. Finally, be sure to check out our completely free courses as you work on improving your finances!

The post How Consumer Credit Counseling Works appeared first on Clever Girl Finance.

Even when you’ve got a lot of things right, you might reach a point when getting your financial situation under control seems impossible. If you’re really struggling financially and aren’t sure which problem to tackle or how, budget counseling can help.

Budget counseling can teach you how to budget and budgeting methods. Plus how to protect your credit scores and other key financial strategies. But you may be curious if it is right for you, and if it is, you may wonder, “Where can I find budget counseling near me?”

So, let’s dive in and see exactly what budget counseling is. Plus how it works and how to get the help you need.

What is budget counseling?

Budget counseling is when you meet with someone who can help you improve your finances. Many budget counselors work for nonprofit organizations, so you may be able to get assistance at no cost.

Even if there’s a cost involved in working with a budget counselor or consumer credit counseling, that doesn’t mean you should rule it out. When you’re drowning in large amounts of debt or chronic struggles with money management, working with a trained counselor is likely worth a small investment.

Types of guidance you can get from budget counseling

Let’s talk about some of the types of help a budget counselor might be able to offer you. That way, you can decide if it’s the right choice for you.

Help with managing your money

Money management is one of the key ways you could benefit from budget counseling. A trained counselor can guide you through steps to help you manage your money, such as evaluating what you need to improve.

Money management includes things like setting up a budget or a better budget, monitoring your credit, and planning ahead with sinking funds for big expenses.

As an example of large expenses, you may need to save and get a loan from a mortgage lender for home ownership, or you may want to purchase a car. These goals are easier to achieve with good money management.

Help with creating a budget

Money management is a rather broad goal. One key skill your counseling sessions can help you develop is budgeting! You could learn about different budgeting methods, like the 30-30-30-10 budget or the cash envelope system. 

Budgeting is just knowing how much you have coming in and how you’ll spend or save it. You might do best with a strict plan for how every cent is used, as with the zero based budget. Or you may need a looser strategy that gives you just a few categories, like the 70-20-10 budget.

Either way, budgeting can help you manage all of your expense categories. Things like utilities, groceries, and medical bills, as well as saving for the future.

Working closely with a budget counselor could help open your eyes to your money story and the way you relate to money. They can also guide you through budget challenges, such as the process of creating and sticking to a budget.

Credit score monitoring

Unfortunately, keeping tabs on your credit score and credit report is something too many of us neglect in our money journeys. We think that everything will be fine as long as we pay our bills.

However, you need to monitor your credit score because it is so key in determining whether you can get financing from creditors. You could be unable to rent an apartment or buy a car at a decent interest rate if your credit score has dropped significantly.

Consider talking to a counselor if you’re unsure of how to keep track of your credit scores. It’s actually pretty simple to check your credit score regularly through a free credit report. A budget counseling expert can help you take steps to raise your score if it’s down.

Guidance in paying down debt

Another important aspect of budget counseling is often learning how to attack your debt and reduce it. A credit counseling organization and a certified credit counselor are usually well-trained in how to help people out of debt.

Often, unsecured debts and high interest rates can be one of the most painful parts of your money story. The idea of lots of debt can weigh you down, bring you feelings of shame, and make you feel hopeless.

Talking to a budget counselor can help you deal with debt stress. In addition you can figure out a game plan for dealing with credit card debt or loans.

According to Bankrate, more than half of adults in the U.S. find money stressful. Talking to a budget or debt counselor can help you find your way beyond debt and help you get rid of that extra monthly payment.

Identity theft protection

Although identity theft is one of those things you probably don’t expect will happen to you, it’s a real risk. Budget counseling could provide assistance if your identity has been stolen, which is a horrible situation to have to sort out.

With cyberattacks and fraudulent activity on the rise, we’ve all got to be vigilant.

In fact, according to Experian, about 1 in 20 (5%) of Americans are affected by identity theft each year.

Budget counselors can help you figure out the best way to prevent identity theft and fraud, as well as help you if you’ve already been a victim. They can talk with you about whether you should freeze your credit and other preventive steps.

Dealing with predatory lenders

We’re all aware there are some shady players out there, and the world of finance and lending is no exception. Sadly, many lenders have predatory practices—they may be deceptive or coercive and convince borrowers to take on loans that could ruin them.

When going through budget counseling, your counselor can help you learn to spot red flags of predatory lenders. (Watch out for payday loan traps, for example!) You can find out ways to deal with or report a lender that’s breaking the law.

Expert tip: Leverage budgeting tips from counseling to improve your finances

In addition to seeking out professional help with your finances, it’s a good ideas to take extra steps on your own to learn more about your money.

Read books, listen to podcasts or YouTube, go to finance workshops, and learn more about any financial topics you might be struggling with.

Having more information about budgeting, interest rates, investing, and credit cards is a great way to get your money back under control. So even if it takes some time, learn as much as you can.

How much budget counseling costs

As you’ve read about the benefits of budget counseling, you’re likely wondering one key question: how much will it cost? The good news is that you can find places that offer free counseling and information.

For instance, you can try our completely free financial courses right here at Clever Girl Finance to gather more financial knowledge.

In addition to our courses, here are some other options to check out as well:

For-profit counseling

In spite of the fact that budget counseling or debt counseling may imply you don’t have any savings or a lot of excess cash, some organizations do charge for their services. These are for-profit counseling agencies.

Even if an agency is for-profit, its fees may be quite reasonable. Ask upfront before selecting a budget counselor if they charge and how much. And you’ll want to look for free options first in order to focus on getting your financial house in order.

Fortunately, the Federal Trade Commission reports that credit counseling agencies should, at a minimum, give free information about their services. (If they charge even for basic information, run the other direction!)

Non-profit counseling

Plenty of non-profit budget counseling agencies exist, so you’ll want to examine your options in that arena first. Of course, your first step is simply gathering information. If you find there are several organizations in your area, read over their websites or call to request info.

Some places that may offer free counseling include your local consumer protection agency, credit unions or banks, universities, housing authorities, and military bases.

One warning: the term non-profit may not mean the agency’s services are totally free. So even if an agency is labeled as a non-profit, you still have to do a little more homework to find out if they charge for debt or budget counseling sessions.

Where to find a budget counseling service

You may be wondering, “Where do I find budget counseling near me?”

First off, you’ll want to try locating a counseling service that is free of charge. However, in some cases, you may need to sign up for a Debt Management Program (DMP), which will usually have a cost.

The good news is there are several reputable sites where you can find a budget counseling service that can help you get back on track with your finances! 

If you know anyone who has gone through this process, you might also ask them for referrals and recommendations.

Financial Counseling Association of America

The Financial Counseling Association of America (FCAA) is an organization with financial counselors available to help you. You can get basic budget counseling at their various agencies as well as debt management plans.

The FCAA is a non-profit organization. You can find resources like articles on specific types of financial assistance, housing assistance, where to find bankruptcy counseling information, and more on their website, fcaa.org.

National Foundation for Credit Counseling

Another reputable nonprofit option is the National Foundation for Credit Counseling. They can help connect you to a member agency that will offer debt relief solutions.

The NFCC does charge a monthly fee for services related to the debt management program, which helps you pay your debts.

However, even a one-time counseling session of 30-60 minutes can help you come up with action steps to improve your financial health.

Questions to ask to help you choose the right counseling service

When you’re wondering, “Where is budget counseling near me?”, it’s a good idea to look into several different agencies or types of counseling. What you choose will depend on how severe your needs are, along with other factors.

Any decision about going through budget counseling requires you to ask a few key questions. You can look online for these answers, of course, or try calling or emailing a representative at a few agencies.

Here are some questions to get you started.

What services are available?

Naturally, you’ll want to find out what types of services an agency offers. If they specialize only in debt management and you’re looking for more basic budgeting guidance, you can look elsewhere.

How can I access budget counseling (online, by phone, or in person)?

You’ll likely figure out the answer to this question with your initial investigation. Try your preferred method of contact first, and then you can ask what types of counseling they provide.

What free information is available?

Whenever you’re talking to a representative or reading online resources, you can find out about free resources. Most reputable counseling organizations will provide information at no charge. If they charge you even to give out information on their services, that’s a bad sign.

Is there a formal contract to sign?

Ask any budget counseling agency you’re considering about contracts. What level of counseling is offered, how many sessions are there, and are you obligated to sign any recurring contract with fees?

How are your budget counselors trained or certified?

Knowing what kind of training the counselors at agencies go through, or if they are accredited or not, will help you make an informed decision. Plus, it will give you peace of mind knowing you have a financial expert who is able to help you make the right financial moves.

What makes a financial counselor and a financial advisor different?

The basic difference between a financial advisor and a financial counselor is what they focus on teaching you and helping you with. A financial counselor will focus on helping you build great money habits through budgeting, debt repayment, etc.

On the other hand, a financial advisor tends to focus more long-term on investing and retirement planning. They run scenarios that show you how much you need to invest and provide guidance based on your long term goals.

In a nutshell, a financial counselor can teach you the basics about money, and a financial advisor can help you plan far into the future.

Does budget counseling affect your credit score?

Your credit score is not directly affected by budget counseling. However, when you choose to take action with any debt you have because of the counseling, you may see a change in your credit score.

For example, closing credit card accounts may negatively impact your credit score temporarily. But this can all be worth it in the long run if you are trying to clear up any debts you have and become financially free.

And remember that the opposite is also true, by creating a plan with your counselor to repay debts, you can positively impact your credit score, as well.

Articles related to counseling and budgeting

If you liked learning more about where to get help with your finances, check out these articles next!

• What To Know About How Financial Counseling Works
• How Consumer Credit Counseling Works
• Are Credit Repair Companies Legit?
• How To Budget: The 4 Best Budgeting Methods To Try

Consider budget counseling to get your finances in order!

You may think you’re a lost cause when it comes to finances. Please, don’t believe that for a moment.

You can take control of your money by starting a new life for your finances, and budget counseling just might be the tool you need to make that happen. Leverage the tips in this article to create a plan and seek out the support you need.

The post What Is Budget Counseling And How Does It Work? appeared first on Clever Girl Finance.

Money affects every one of us every single day. If you’ve found yourself feeling stressed recently and wondering how to stop worrying about money so you can live a good life, keep reading.

Money is a big stress factor for many people. But constant concern about finances can lead to psychological stress, so it’s important to get it under control.

The strategies you’ll learn in this list are essential life skills that will help you build a happier and more satisfying life. You can think of them as some rules to be happy with your finances.

Why do I worry about money?

Common reasons include what role money played in your life growing up and not feeling that you have enough income.

Money worries can happen to anyone at any time, but you could be more likely to feel anxious about money if you relate to these:

Raised with deprivation

If you’ve ever had to go without food because money is tight, you will naturally be cautious about your spending habits to protect your resources.

You may even find yourself turning to to extreme frugal living, such as cutting out some everyday items just to save some cash.

An unsteady or low income

You’re also much more likely to worry about money and how to save money if you don’t have a lot of it.

A fluctuating income can be tricky to manage, too, as you don’t know what you will be earning from one month to the next. It can create extra pressure on regular expenses and household income streams.

Struggles with debt

If you have any type of debt, whether it’s a credit card, mortgage, or student loans, you don’t have an option but to pay it. But that doesn’t always mean that you’re able to.

Overwhelming debt stress can bring extra financial strain to your life and cause lots of sleepless nights!

A sudden change in circumstances

Unexpected expenses, increasing debt, and losing your job are the three biggest scenarios that can cause unplanned financial distress. Losing a loved one who contributes to your household income can also have a huge impact.

As these factors are out of your control, it can be extremely stressful.

Ways money worries can impact your life

Many of us deal with money worries, financial uncertainty and stress on a daily basis. It may not even be obvious that someone has money worries. That said, knowing the signs to spot could save yourself and somebody else too.

Signs that money anxiety is having a serious negative effect on your life include:

Physical symptoms

Do you get a headache or experience tightness in your chest whenever you look at your bank account? You may be suffering from financial stress.

Additionally, when you can’t stop being concerned about money, you can develop health issues like insomnia.

In addition, stress weakens your immune system, which makes you susceptible to illnesses.

Discuss your symptoms with a doctor and seek advice on ways to prevent them.

Difficulty sleeping

Money concerns can even keep you awake at night. For a good night’s sleep, you need a clear mind, so try distraction techniques and mental puzzles to try and get yourself into sleep mode.

A breakdown of relationships

When times are tough, we often take our bad mood and frustration out on the ones closest to us. Money problems often cause a relationship to break down.

Talking and being open with your loved ones is a good way to repair the relationship. Being honest with each other is really important if you want a person to be in your life long-term.

Withdrawing from social situations

Anxiety caused by financial worries can stop you from wanting to see family and friends.

But being on your own with your thoughts can make the situation worse, so try and mix with other people even when you don’t want to.

It’s also a good idea to reach out to a therapist if your money anxiety is affecting your ability to work and socialize or if you experience depression.

An impact on mental health

Thinking about your financial challenges constantly can affect your mental health. It can become much more difficult to enjoy life if you’re stuck in a vicious cycle of being anxious and stressed about your money and mental health.

Stress about your financial situation can make it hard to focus on important aspects of life. Being anxious may lead to difficulties with concentration, as well.

How to stop worrying about money and start living: 15 Must-try tips

Feeling anxious or overwhelmed about your finances are normal emotions when worrying about money, but there are things you can do to help.

Here are 15 practical steps that you can take to boost your financial confidence and achieve greater life satisfaction.

1. Review your full financial picture

To understand how to stop worrying about money, having a clear understanding of where your money goes is so important.

A full financial picture to make sure you’re financially sound will give you some control, showing you how much money you have coming in, what outgoings you have, and how much you have left over.

Start by looking at your bank statements and receipts. Categorize your spending into essentials (food, bills, housing, etc. ) and non-essentials (eating out, clothes, coffee). Doing so will show you exactly what you spend in each area and highlight areas where you could cut costs or try a spending freeze.

When you don’t have a firm grasp of your finances, the scariest thing is not knowing what is happening with your money. Once you have a clear picture, it’s much easier to handle.

2. Set specific financial goals

Want to know a quick way how to stop worrying about money and start living your life instead?

Setting financial goals for yourself will help you get your finances under control by giving you something to aim for and a plan to help you achieve your financial wishes.

The best way to set goals that actually work is to make them SMART (specific, measurable, achievable, relevant, and time-bound). Then ask yourself where you are financially right now.

What do you need to do to meet your goal? It could be clearing debt or boosting your earnings using high income skills. Whatever it is, write a plan and stick to it.

Financial goals to inspire you

Some examples of financial goals to have that can help you stop worrying about money include creating an emergency fund and improving your credit score.

Additionally, you may want to save a down payment for a house or reduce your debt.

Ultimately, taking steps and planning how you can achieve your goals can relieve you of common financial challenges.

3. Find a budgeting approach that works for you

To solve financial worries, you need to gain back control of your spending and manage your money well. And to do this, you need to budget.

Investing the time to manage your money better can pay off in the long run. It may help you stay out of debt and save for your future financial goals, which are two of the most common financial worries that people have.

To make a budget that you can successfully stick to, take the following steps:

Work out your income

Your income is everything you earn, minus tax deductions, health insurance, and retirement contributions. Don’t forget to include any bonuses and benefits that you might receive!

Review your spending

Now you know what’s coming in, the next step is to see exactly where your hard-earned money is going.

List and categorize your spending areas for organized finances by starting with your essential expenses, such as bills. Then, list your non-essential spending, such as entertainment and eating out.

Choose the right budgeting method for you

Find a budgeting method that you like – whether that’s the 50-30-20 rule, zero-based budgeting, or envelope system.

There are many to choose from, but just because something works for your friend doesn’t mean it’s the right system for you. Keep an open mind and try a few.

Track progress

Seeing how much you’re saving each month is hugely motivational. It may surprise you just how much extra cash you’ve got from making small changes to your finances.

Make changes

A good budget is flexible to accommodate changing needs and to prevent you from overspending. Take a look at how effective your current budget is every three months or so and adjust it if you need to.

4. Educate yourself

The path to financial freedom and fewer money worries starts with you. Brushing up on your understanding of personal finance is the perfect place to start.

There are so many ideas to improve your financial literacy basics!

For example, you can sign up for financial newsletters. You can tune in to finance podcasts and read personal finance books.

Likewise, many financial experts generously share their expertise on social media. Find someone you trust to learn from.

All of these things will help you feel happier and more confident about the financial decisions you make, so it’s worth investing the time to learn about money.

5. Don’t keep your finances a secret

Big secrets such as hidden debt can have a huge negative impact on our minds.

Talking about your money worries with someone you trust can help. The hardest part is how to start sharing your thoughts. The more you do this, though, the easier it becomes.

How to begin talking about money

There’s no right or wrong way to talk about your finances, but there are things you can do to make it easier.

Choose a time and place that you feel comfortable with. Be aware of your emotions and try not to let them stop you from talking.

Being upset is ok, but try to take some deep breaths and organize your thoughts before you speak. Write some notes of key points to help you get your ideas across.

Most importantly, choose someone to talk to whom you can trust not to judge you. For instance, a mentor, someone who has achieved the financial goal you are working toward or a qualified therapist.

6. Review your spending

A great way to practice how to stop worrying about money is to review your finances regularly. Make it a part of your routines to have a weekly or monthly money date.

You’ll feel more in control if you know exactly how much you earn compared to how much you spend each month. A few small changes to your spending can make the difference you need to stop feeling overwhelmed with money spending problems and start feeling confident with your money.

Throughout life, things happen that can cause your finances to drastically change.

Events such as a new job or having children often mean that your finances need to be adjusted. When this happens, it’s a good idea to pause, review your current situation and adapt accordingly.

7. Create a debt repayment plan

Whilst nobody wants to be in debt, it happens to a lot of people. What matters is how you handle it.

So, what’s the best way to tackle debt? Here are three steps that work!

Get familiar with the amount of debt you have

If you don’t know the level of debt that you’re facing, you can’t start to reduce it.

Write a list of everything you owe and its value, including credit card bills, car expenses or payments, and any student loan debt or credit line repayments.

Confronting it and saying it out loud to yourself can be extremely liberating!

Get your debts organized

Now, consider how you’re going to eliminate that debt. Becoming debt-free doesn’t happen overnight, but you can make good financial choices to start reducing the amount you owe.

Paying more than the minimum amount, paying your highest-interest debt first, and consolidating multiple debts are all ways you can pay off debt faster (consider: is debt consolidation a good idea?).

Don’t think about your debt too much

Easier said than done, right? Overthinking your money problems can cause low moods that prevent you from doing anything productive to help your finances.

Instead, allocate time to think about your debt. A good time to do this is when you are making your regular repayments. Don’t let debt consume your life!

Once you’re debt free, you’ll have a lot more money to invest, save, or spend. And no more worries about how much interest you owe.

8. Stay active (Best practice to stop worrying about money and start living!)

Learning how to stop worrying about money isn’t just about your finances.

Exercise isn’t only good for our physical health – it can also benefit our finances too! Make sure moving your body is part of your everyday routine.

Working out releases those little endorphins that we know help to boost our mood.

In addition to this benefit, exercising can make problem-solving easier – a win for dealing with finances!

Not a fan of exercise? You don’t have to be a hard-core gym goer to benefit from physical activity. Walking the dog or dancing around your bedroom is just as effective!

9. Embrace mindfulness

Practicing mindfulness techniques can help you lessen stress and anxiety caused by your finances.

How? Well, mindfulness is all about accepting yourself and your emotions and dealing with them in a way that doesn’t make you feel bad.

So, if your current financial situation isn’t as good as you’d like it to be, don’t get caught up in the negatives.

Instead, take a deep breath and create a plan to turn the bad things into positives. Choosing to let go and trusting the process can be extremely empowering!

Being mindful also increases self-awareness, which can help you rein in bad spending habits. Maybe it’s time to sit down and have an honest conversation with yourself about money.

Some great mindfulness techniques to try are:

Focusing on your breathing

Simply taking a deep breath before making a purchase can stop you from regretting your buying decisions and blowing your carefully considered budget.

Next time you get tempted by something in your favorite shop, try this technique and see how powerful it can be.

Visualize your goals

Once you truly know what you want to achieve, really picture the end result. It doesn’t matter if that’s your dream vacation budget or your first house. The important thing is you can see the prize for all your hard work.

Be kind to yourself

We are all human, which means it’s normal to lose focus now and again. Beating yourself up about it won’t help, though. Simply acknowledge what has happened, learn from it, and move on.

10. Invest your money wisely

Making wise financial decisions can also help you learn how to stop worrying about money. Investing allows you to learn how to grow your money quicker than if it sat in a bank account.

You then have the potential to reach your financial goals sooner!

Only invest in something you completely understand, though. Stocks, real estate, and index funds are good places for new investors to start.

Start the investing process

Before you part with your money, take some time to consider the risks and think about the impact of losing some or all of the money invested.

Ready to learn how to start investing? Take the first step by opening a brokerage account, which is basically a type of investment account to trade stocks, bonds, and mutual funds.

You can likely open a brokerage account online in less than 15 minutes.

11. Be aware of your weaknesses

Do you struggle to resist the temptation of a department store sale or the lure of that overpriced daily latte?

Everyone has financial weaknesses, and just like other bad habits, they can cause you harm.

Facing up to yours is the best thing you can do to stop negative money habits and free yourself of money stresses.

Here’s how to do it:

Remove temptation

If stress shopping is your biggest weakness, pausing your shopping trips and unsubscribing from store emails is an effective way to rein in your spending.

It doesn’t mean that you can never do some retail therapy again, but while you have money troubles, it’s a smart move to make.

Think before buying

Before every significant purchase you make, ask yourself whether you actually need that particular item. You could always come back to it later to see if you still want it.

Chances are you’ve changed your mind and just saved yourself some dollars!

Only make purchases with cash

You’re more likely to spend less when using cash because you can see how much something is costing you. It’s much easier to hand over a card than a stack of money.

Put the plastic away, switch to cash, and see how much you can save!

12. Take time for yourself

Life isn’t just about paying off debt and saving money.

If you are on a tight budget, there are still many things you can do that won’t negatively impact your finances. Living frugally just means being smarter with your money, not stopping spending altogether.

Stuck for ideas? Try some of these low-budget activities:

• Visit a library or museum
• Go for a walk
• Take advantage of happy hour drinks with friends
• Download free apps
• Appreciate simple pleasures in life – like a cup of coffee or being outdoors
• Take a drive around your local area

13. Start a side hustle

If you earned an extra $500 each month, would you worry less about money? Probably.

Side hustles are a smart way to boost your earnings and learn how to stop worrying about money. One great thing about side jobs is that they can be done in addition to your main career.

Side hustle ideas

Lots of unique side hustles can be done online and during evenings and weekends, giving you an additional flexible income stream. What’s even better about side hustles is that most people choose one that is aligned with their hobbies and interests.

For example, if you love animals, you could start up a pet-sitting business in your local area.

If DIY is more your thing, list your services on TaskRabbit and help people in your neighborhood while earning money.

Now, all you need to do is decide what to do with all that extra money! Pay off some credit card debt, save for a home, or treat yourself to a well-earned vacation; the choice is yours.

14. Save for your future

It can be hard to think about what your finances will look like in the future when you might be struggling to pay the bills right now. But you need to plan if you want to achieve financial freedom later in life.

Here are some ideas to achieve this without compromising too much today.

Change bad lifestyle habits such as overspending

Use the money that you would normally spend in these areas to save instead. A great way to do this is by tackling one bad habit at a time.

Let’s say you have a weakness for buying candy. Stop yourself from buying candy for a set amount of time and make a note of how much you save. This will motivate you to continue making good financial decisions.

Don’t ignore your retirement savings

It may be years away, but the earlier you start saving, the more your retirement investments will be worth when you retire. (Learn the difference between a 401k and IRA.) More money means fewer financial worries when you stop working and a higher-quality lifestyle.

Set up automatic payments to yourself

Consider saving for your future as another monthly outgoing.

Commit to saving a set amount each month (even if it’s just a few dollars) by creating an automatic transfer into a separate savings account.

Before you know it, you’ll have saved a decent amount that you can use to help you meet your financial goals.

15. Reflect

It’s important to take time to step back and reflect on your finances. Because your lifestyle, priorities, and goals will change over time.

Reviewing your finances will allow you to factor new plans into your finances and adjust them accordingly.

For example, you may receive an inheritance, which means you can retire earlier. Or you may decide that it’s time to settle down and have children.

You can adapt your budget to save for this exciting life event and ease financial pressure later on.

Above all, regular financial planning is the best way to eliminate money worries and stress. It can help get rid of your concerns through planning and give you peace of mind.

Expert tip: Focus on taking control of your emotions

Money anxiety happens. So you if you need to, talk to a trusted friend about your finances. You can also consult a doctor or a therapist for physical symptoms or mental health struggles.

Don’t allow your worries to consume you. It only makes the situation worse if you let your worries run the show.

Decide that you will be responsible for your financial health. If you’ve been avoiding looking at your debt, or you don’t know anything about your finances, then it’s time to get to know your money.

You are capable of making great decisions about your money. Whatever you don’t know, you can learn it. You can quit worrying about money and focus on your life!  

Support and advice for money worries

Money troubles are nothing to be ashamed of! If you experience any negative thoughts, it’s ok to reach out for help.

Speaking about your money problems can often help you put things in perspective and help you come up with solutions to financial issues that you hadn’t thought of before.

There is a lot of help available out there – all you need to do is reach out and ask for it. And you don’t even need to pay a financial advisor.

In addition to our vast library of content here on the blog and our 30+ free courses here at Clever Girl Finance, here are some free resources you can leverage:

Operation Hope

Operation Hope is a non-profit organization which provides people with access to financial well-being coaches. These coaches provide guidance on creating a financial plan to navigate difficult financial situations.

Debt.org

Debt.org is an organization that focuses on helping people get out of debt through providing clarity on how to leverage debt consolidation plans, debt settlement plans, tax debt relief plans, and more.

The CFPB (Consumer Financial Protection Bureau)

The CFPB (which stands for the Consumer Financial Protection Bureau) is a U.S. government agency that provides advice on debt, credit cards, mortgages, and other finance topics.

Government benefits

This government site provides advice on government programs available to help pay for essential items like food, housing, and healthcare. They also share key tips on ways to get the most for your money.

Savvy Ladies

Savvy Ladies is an organization that has been around for over 20 years. It offers support to women via its financial helpline and volunteer support groups.

Your traditional bank or credit union

Most banks will offer their customers free financial advice and point them in the right direction based on their financial circumstances for further help.

Credit unions provide similar advisory services to your bank and are a great source of information.

How much money do you need to not worry about money?

The amount of money you need to not worry about money depends on your income, expenses, and goals. Define what being financially comfortable means to you.

Maybe you just want to be able to pay bills, and you’ll be content. Maybe you have big goals like saving a million dollars for retirement or paying off your mortgage.

Go figure out your magic number and use it as motivation.

How do I stop stressing about money and the future?

The first step to stop stressing about money and the future is to look at your money situation. Know what’s stressing you. Is it your debt, lack of savings, or a big expense coming up like the average wedding cost?

Explore your options on how you can increase your income or reduce your expenses. So you’ll have extra money to save or pay off your debt faster.

Then, sit down and make a plan. It will reduce your anxiety if you have a clear path to follow.

Additionally, try to change your perspective and approach the future with hope rather than fear.

Articles related to how to stop worrying about money

If you enjoyed learning more about how not to worry about money, check out these posts next!

• 5 Tips To Stop Paying Credit Card Debt And Stop Worrying About It!
• Worried About Losing Your Job? Key Steps To Take
• Trusting The Process Of Improving Your Finances
• How To Stop Spending Money: Curb Your Over Spending

Live a financially free life and stop worrying about money!

You’re not alone if you’re concerned about finances. It takes some know-how, practice, and patience to train yourself to learn how to stop worrying about money and start living.

But it’s more than worth it for your quality of life!

Once you begin to set goals, understand your budget, and create a good habits list for your money, you’ll soon find that your finances are in much better shape.

As you continue to learn more about money, you will likely worry less and less and find that you have a healthy mindset with your life and finances.

The post How To Stop Worrying About Money And Start Living: 15 Key Tips appeared first on Clever Girl Finance.

It’s important to understand what to do if your identity is stolen. Lately, it seems like every few months, there is a news report about a security breach. These breaches can potentially make people susceptible to identity theft and credit fraud.

Someone can steal your identity in multiple ways, from a lost wallet or purse to using public Wi-Fi. Thieves may even steal your information from ATMs.

All this can leave many wondering what to do if someone steals your identity, furthermore, how to know if your identity has been stolen. Knowing that security breaches can and do occur, here are some key things you need to do.

You can minimize the impact and protect yourself from potential credit fraud when you know how to report identity theft.

15 Steps for what to do if your identity is stolen

If someone steals your identity, this can affect many things. It can compromise your personal information, from debit cards to types of bank accounts, bank account numbers, and driver’s license numbers.

Because this can happen without you realizing it, preparing and knowing how to report identity theft is essential.

From knowing the answer to “How do I file a police report for identity theft?” to “How do I notify the post office?” you’ll find answers here.

You can take many preventative measures, such as having insurance and identity theft protection services, monitoring credit reports, etc. Also, find out where to look to see if theft has occurred.

Unfortunately, victims of identity theft have to work hard to fix a problem they didn’t create. However, having preventative measures in place can help with ID theft.

1. Check your credit immediately to confirm if your identity was stolen

If you have concerns about identity theft and want to know what to do if your identity is stolen, check your credit immediately with a free credit report. You want to make sure everything on your credit report is as expected.

Get your free credit report

You can access a free copy of your credit report from all 3 credit bureaus each year via annualcreditreport.com.

Many banks are also now offering this service for free with your accounts. 

Alternatively, you can choose to pay for one.

The bottom line is that you must stay on top of checking your credit to ensure nothing strange is happening there, so checking copies of your credit report reasonably often is smart. If things are amiss, keep reading.

2. Alert the credit bureaus immediately

Alert the credit bureaus to report the situation and place a fraud alert or freeze on your credit reports to prevent additional damage.

A credit freeze (or security freeze) lets you restrict access to your credit report. A freeze means lenders cannot access your credit to approve any unauthorized lines of credit until you remove the freeze.

You can get a freeze on your credit from each of the 3 major credit bureaus – Equifax, TransUnion, and Experian.

It’s a good idea to learn how credit works and check in at least once a month, regardless. If you’re wondering does checking your credit score lower it, checking your credit does not impact your score.

3. Get a credit monitoring service in place

Just because a breach happened does not mean identity theft or credit fraud will happen immediately.

With what to do if someone steals your identity, know that it could take months or years before you are affected.

If a security breach impacts a company, e.g., Equifax, they may offer free credit monitoring for some time.

However, several other companies can do this for you as well. 

How credit monitoring helps you

Credit monitoring is a big part of understanding “How does credit work?” Credit monitoring will alert you when someone applies for a line of credit or adds one in your name. The monitoring will help you track exactly what’s happening with your credit.

Remember that even if you have a credit freeze, it’s a good idea to have credit monitoring because fraud could happen on your existing accounts, which a credit freeze does not impact. 

However, a credit freeze will prevent credit card companies or credit card issuers from accessing your account for new credit.

Putting an extended fraud alert on your credit report also protects you from fraud. You can choose how many years you keep the fraud alert in place, which means creditors will take more time to verify who you are before giving any credit. An extra step like this can make you aware of potential future identity theft.

4. Report the problem to the FTC

As soon as you realize your identity is stolen, you should report it to the Federal Trade Commission (FTC) right away.

By making this report to the FTC, you’ll get guidance on creating a recovery plan. They explain that they’ll provide you with guidance on how to:

• Close new accounts made in your name
• Remove charges you didn’t make from your accounts
• Clear your name of criminal charges
• Manage theft on specific accounts, e.g., government benefits, student loans, bankruptcy filed in your name, etc.
• Fix your credit report

By filling and documenting this report quickly, you may also be able to limit your financial liability.

5. File a police report

Identity theft is a crime. So you’re probably asking, “How do I file a police report for identity theft?”

When figuring out what to do if your identity is stolen, a police report from your local law enforcement agency can help support any claims you file to dispute theft.

By filing a report with your local police department, you may also be aiding the police in fighting existing identity theft cases.

When you file the police report, be sure to have a copy of your FTC report and proof of your stolen identity, in addition to your address and ID, according to US News.

You’ll also want to get a copy of this report to share with the credit bureaus, creditors, and service providers to keep on record as part of your case file.

So now you know the answer to, “How do I file a police report for identity theft?” and you’re one step closer to getting your life back to normal.

It’s also a really good idea to file an additional report with the Federal Bureau of Investigation (FBI) as they also investigate financial fraud cases.

6. Get access to any documents related to the identity theft

To better prepare, you should gather all the documents associated with the theft. It’s also a good time to learn how to declutter paperwork!

You can write a request for the documents to the company where the theft happened, and you must also include a police report, an FTC identity theft report, and identification when you do this, according to the FTC.

7. Be sure to notify the IRS

You must also make the IRS aware of any identity theft. Someone could attempt to use your information to create a fake tax return and get money from a tax refund.

You can go to the Internal Revenue Service website to find out what to do if your identity is stolen. In addition, you’ll find out how to notify them about the fraud.

8. Let the DMV know

You’ll find out there can be problems with your driver’s license also, so it’s essential to understand what to do if someone steals your identity related to your license.

If you suspect someone has stolen your license, contact your local Department of Motor Vehicles and inform them about the situation. You can add a flag to your license to prevent fraud.

9. Notify your health insurance of the fraud

When deciding what to do if your identity is stolen, you’ll find that you may also need to let your health insurance company and providers, etc., know about the fraud. Someone may be trying to use your insurance for medical procedures or medicine, so telling the insurance companies is helpful.

Look through your medical records and ensure everything is accurate, and report anything that isn’t to your health care provider, according to the FTC.

10. Contact the Social Security Administration

You should also inform the Social Security Administration if someone steals your identity. 

If you think someone could be using your social security number, you can contact the Social Security Administration (SSA). They can check their records to make sure there isn’t any fraud.

11. Contact the post office

Be sure to contact the post office as well. Contacting them helps to ensure that no one tried to authorize a change of address in your name. 

You can also fill out paperwork to make sure they are aware of the situation and have a record of the theft.

12. Change online passwords and pins associated with your financial information

Changing the passwords or pins you have associated with your personal and financial information is a good idea as soon as possible.

You may not know exactly what information the thief took, so it’s better to take all precautions, and this is one of the smartest money habits, too.

You can set calendar reminders to change your passwords every few months. Make sure that you create strong passwords that are not easy to guess. Also, avoid using devices you don’t trust.

13. Contact your creditors and service providers

You’ll also want to report the situation to creditors or service providers. You can then begin the dispute with them for fraudulent claims in your name.

You can provide the FTC and police reports you filed to them as well to help further validate your claim. Identity thieves can set up services like utilities in your name, so contacting your service providers is essential.

Also, notify companies reporting inaccurate information to the credit bureaus due to identity theft. That way, you can stop the effects on your credit score.

14. Review your bank and credit card accounts and statements

Take some time out to review your bank and credit statements for any discrepancies.

You may be able to catch the theft early by doing this. Especially if the transactions are not on your credit profile yet. Be sure to make your bank’s fraud department aware of the situation.

15. Look for any fraudulent accounts in your name so you can dispute and close them

As you review your credit profile, look for any fraudulent accounts in your name. If someone contacts you due to debt owed on a fraudulent account, provide them with your FTC and police reports.

You can also ask for the details about the account and file a formal dispute with them for any balances due.

If you can learn more about the identity thief, you can report this information to the police and FTC.

The FTC also provides sample letters to help you request that a debt collector stop collecting debts you don’t owe.

Expert tip: Create a plan to recover your identity

A stolen identity can mean weeks or months of headaches and frustration for you. If you’re a victim of ID theft, it’s important to quickly follow the necessary steps to get your life back on track.

However, some steps to recover your identity may take longer than others, and you likely don’t have unlimited time to deal with this inconvenience. Though you want to act quickly, it’s alright to take a few moments to make a plan to fix everything, one that works with your schedule. 

For example, you may need to call the credit card companies during your lunch hour tomorrow, file a police report on your day off, and review your statements over the weekend.

In many cases, taking the first few steps to get things back to normal , and planning to succeed, will help you feel better and give you the momentum you need to continue.

How to determine if your identity has been stolen

You can tell if someone has stolen your identity in a few ways.

Fraudulent transactions on your accounts

The first, and one of the most obvious, is if you notice any fraudulent transactions on accounts. 

If any information with your credit looks inaccurate, or you see information for accounts you didn’t open, this can be a sign of theft.

Your information in data breaches

Other ways to know if your identity is stolen, according to McAfee, are if you find that your personal information was in a data breach, you find out about a tax return in your name that you didn’t file, or you get mail at your address, addressed to someone else.

How to prevent identity theft

Ideally, you can prevent someone from stealing your identity instead of wondering what to do if your identity is stolen.

Don’t share personal information

Don’t give out any banking details or personal information to anyone you don’t know. 

Phishing scams (online scams that try to get your personal information) are a common way to steal identities, so avoid this by not giving any information to unknown sources or even sources you haven’t verified.

Even if the company appears legitimate, make sure it is the company you think it is and not a scammer.

Monitor your credit

Your credit is one of the first places you can check for a stolen identity. Monitor it by checking your credit score, tracking your transactions, and getting your free credit reports each year.

Get identity theft insurance

One thing that you can do to protect yourself is to get identity theft insurance for it. Insurance means you can continue your life and still be alright financially, even if you have to deal with a problem like this.

There are lots of things identity theft insurance can cover. According to LifeLock, it can include reimbursing you for stolen funds, replacing lost wages, and covering legal fees and other costs.

You can get this insurance from most insurance companies and the credit bureaus also offer insurance options as well.

What is the first thing you should do if your identity is stolen?

If you suspect your identity is stolen, you should first notify the credit bureaus and freeze your credit. That way, you can try to prevent further damage. There are several vital steps to take after that, but you can start there.

How do I start an identity theft investigation?

To start an identity theft investigation, contact the Federal Trade Commission. They can help you make a report and then start getting your life back to normal. Also, file a police report, which can help you start an investigation.

What are 3 steps to take after your identity has been stolen?

Three key steps to take after you find out that your identity is stolen is as follows:

1. Let the credit bureaus know you’ve been a victim of identity theft to avoid further credit damage. 

2. Inform the Federal Trade Commission, as well. They can help you figure out what to do next. 

3. File a police report about the identity theft at your local police department. You can also file a report with the Federal Bureau of Investigation (FBI).

These 3 steps can give you a simpler life and help you know what steps to take in the next few days and weeks.

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Get your life back to normal faster by knowing what to do about identity theft

Don’t panic if your personal and financial information is part of a security breach. It’s frustrating, but if you take the above actions quickly, hopefully, you can minimize the impact on your finances by knowing how to report identity theft.

It’s also essential to take precautions even if you have not had your identity stolen. Be sure to store your financial records properly, know how long to keep financial records, and stay on top of reviewing your bank, credit, and service statements.

If someone steals your identity, don’t stall on taking action. The sooner you start addressing it, the quicker you’ll resolve it. And while you’re at it, be sure to review other aspects of your financial health including a financial check up.

The post What To Do If Your Identity Is Stolen: 15 Key Steps appeared first on Clever Girl Finance.

Prayers for financial breakthrough can be a powerful way to improve your financial situation. Talking to God about money may be different or new for you. But not to worry, we have 7 prayer examples you can use during financial hardship.

Like budgeting and saving money, prayer can be a powerful tool for financial success. 

By reciting prayers and scriptures for financial breakthrough, you can start to feel more secure with your finances. But first, let’s discuss more about how prayer can help you in your financial situation. 

How prayer can help you achieve your financial goals

Prayer is powerful but not the same as asking a genie to grant you three wishes.

However, with consistent prayer combined with taking intentional action, you can eventually reach financial success.

Helps keep you focused

Repeating prayers for financial breakthrough will help keep your mind focused on what you want.

I find that whether I pray for extra money or to pay off credit card debt, by repeating what I desire through prayer, my mind begins to prioritize what I want.

Causes you to stop worrying about money

Prayer can help relieve anxiety and fear. The act of praying fills you with hope.

When you pray about your financial situation, you trust you will be guided in the right direction. You know that by praying, God takes care of what you desire. 

Clarifies your financial goals

Prayer usually involves asking for or reflecting on specific things. It’s easy to ask for more money, but the most powerful prayers are specific.

Using prayers for financial breakthrough helps you get clear on what you want to achieve with your money. 

What to include in your prayer

Whether you’re new to prayer or pray all the time, here is what you can include in your prayers to make them more potent. 

Acknowledge God

No matter your situation or hardships, it’s essential to acknowledge the power of God. God is still providing whether you’re trying to find out how to avoid overdraft fees or you didn’t get paid as much as you’d like.

When you acknowledge God’s presence and power, you are showing that you trust him to provide. 

Express gratitude

Research shows that gratitude can improve your relationships and make you feel happier. Therefore, gratitude in prayer is essential even when things aren’t going your way.

For instance, perhaps my car is run down, and my mattress has some springs popping out; most people have something to complain about. But if I only focus on what’s wrong in my life, I’ll fail to see what’s good.

Your life may not be perfect right now, but there are still many things to be grateful for. In your prayer, make sure to thank God for the things he’s helped provide for you. When you express your gratitude, you show God that you appreciate what you have now and what he’ll give you in the future. 

As it says in James 1.17, ” Every good and perfect gift is from above.“

Ask for what you desire

One of the most critical parts of the prayer is to ask for what you want.

However, it can feel uncomfortable doing this. Perhaps you feel like you are being selfish or greedy, but as it says in Matthew 7:7, “Ask, and it will be given to you; seek, and you will find; knock, and the door will be opened to you.”

Whether you want financial stability, to build wealth, money to pay your bills, or extra money to take a vacation, it’s okay to ask the Lord for money. Express your intention.

For instance, ask God to help you build wealth to provide a safety net for your children. Or ask God to help you eliminate your debt so you learn how to save money.

Thank the Lord for delivering

When finishing your prayer, it’s best to end with gratitude. You are thanking God for not only listening to your prayers but for answering them as well.

When you thank him for delivering what you desire before what you want arrives, it shows faith. And the more you have faith, the less you’ll have self-doubt and worry. 

Additionally, by thanking God in advance, it puts you in the mindset that the money you desire is on its way, helping you switch your scarcity mindset to an abundant mindset. 

7 Examples of prayers for financial success

Now that you see the benefits of prayers for financial breakthrough, here are some examples of different prayers you can use in your financial situation. 

Additionally, we’ve provided some scriptures for financial breakthrough to help amp up your prayers.

1. Example of prayer for better money management

Do you find yourself overspending or relying too much on your credit cards? Maybe you’re having trouble saving. If so, you can use this prayer for how to manage your money. 

Dear Lord,

I humbly come before your good graces. Thank you for providing me with a stable job with a consistent income.

Please help me with my money management. Help me prioritize my finances and also make better decisions with my money.

Thank you for answering my prayers.

Amen.

Scripture: “Suppose one of you wants to build a tower. Won’t you first sit down and estimate the cost to see if you have enough money to complete it? For if you lay the foundation and are not able to finish it, everyone who sees it will ridicule you, saying, ‘This person began to build and wasn’t able to finish. ” Luke 14:28 – 30

2. Prayer example for financial stability

Financial stability is the foundation for building wealth and better money management. Here is how you can use prayer to become financially stable. 

Dear Lord,

I come humbly before you to seek your guidance and help. First, thank you for being open to my prayers as I ask for your help in creating financial stability. I appreciate the resources and income you have provided for me, and I pray that you guide me in making better financial decisions with my money.

I pray for a steady flow of income and that you provide me with the wisdom to manage it well.

By granting me financial stability, I can provide a better life for myself, my family, and my loved ones. With a financially stable life, I can feel secure and confident with my money, meet my needs, and give to those who have less than myself. 

Thank you for answering my prayer.

Amen.

Scripture: “The plans of the diligent lead to profit as surely as haste leads to poverty.” Proverbs 21:5

3. Idea for prayer for getting out of debt

Prayers for financial breakthrough can also work when you want to know how to pay off credit card debt fast.

Whether temptation or misfortune led you to debt, paying back the money you owe as soon as possible is essential. Here is a prayer to help you pay back what you owe.

Dear God,

I pray to you today, asking for your help. I admit to borrowing more money than I could pay back and now seek your guidance to pay my debts and achieve financial freedom. As Proverbs 21:5 states, “The plans of the diligent lead to profit as surely as haste leads to poverty.”

Please forgive me for the financial shortcuts I have taken that have led me into debt. I come before you now, ready to change. I am willing to plan and work hard to get myself out of debt. Thank you for showing me the way and helping me to stay disciplined and focused. 

Amen.

Scripture: “Let no debt remain outstanding, except the continuing debt to love one another, for whoever loves others has fulfilled the law.” Romans 13:8

4. Example of prayer to help build wealth

Prayers for financial breakthrough can be applied to building wealth. It might feel uncomfortable, or you may feel greedy if you pray for wealth.

However, building wealth means you can provide for others, give back to the church, and live a life with less worry. Try one of these prayers for financial breakthroughs and building wealth. 

Dear Lord,

I want to thank you for the abundance you’ve provided for me in my life. Thank you for the income, resources, and money you gave me through various means. I ask you from a place of humility to help me build up the abundance you have provided.

Please help me to lead a life of prosperity through building wealth. And with this wealth, I can better preach your word and support the church and others in need. 

As you help me to build my wealth, I know you will guide me to make the right financial decisions.

Amen.

Scripture: “Wealth and riches are in his house, and his righteousness endures forever.” Psalm 112:3 

5. Prayer idea for when you’re worrying about money

Everyone worries about money at some point in time, even the uber-wealthy.

However, worrying about money never made anyone richer. If you feel overwhelmed with worry and fear, you can turn to prayers for a financial breakthrough and learn how to stop worrying about money.

Whether you’re concerned about paying your bills or having enough money, this prayer can help ease your stress. 

Dear God,

I come to you seeking peace from my worry about money. As Psalm 55:22 says, “Cast your cares on God, and he’ll sustain you.” I thank you for the times you have provided for me in the past, and I know that you will continue to in the present and the future. 

I trust you will resolve my money situation and provide me with what I need. My focus has shifted from worry to the current blessings in my life. My faith in you is unwavering.

Amen.

Scripture: “This is why I tell you: do not be worried about the food and drink you need to stay alive or about clothes for your body. After all, isn’t life worth more than food? And isn’t the body worth more than clothes? Look at the birds: they do not plant seeds, gather a harvest, and put it in barns, yet your heavenly Father takes care of them! Aren’t you worth much more than birds? ” — Matthew 6:25-26

6. Prayer example for financial miracles

Miracles happen daily, and chances are you’ve experienced some miracles in your lifetime.

Have you ever reached the gas station when your tank was empty? Miracle!

Or perhaps you lost your wallet and a stranger returned it to you, with everything in it. Miracle!

With the unpredictability of life, everyone can use a miracle, and here’s the prayer for one. 

Dear Lord,

Thank you for the miracles you’ve provided for me in the past. I know your ability to perform the unimaginable as I’ve witnessed it in my life many times. I come before you today humbly asking for a financial miracle.

Due to unexpected experiences, I need a miracle to help me through this delicate financial situation. Although I don’t know how things will come together, I trust you are taking care of it. I know a miracle will occur at just the right moment.

Thank you for continuously performing miracles in my life.

Amen.

Scripture: “Ask, and it will be given to you; seek, and you will find; knock, and the door will be opened to you.” — Matthew 7:7

7. Thoughts for prayer to find employment

Have you recently lost your job, or are you looking for a new one? Maybe you need to find a new job that is more suitable to your needs. Here is a prayer to help you with your employment search.

Dear God,

I come before you to ask for your assistance in finding employment. Please guide me in finding work that will allow me to use my skills to help others and be fairly compensated so that I can provide for myself and others. 

I know that you have the ideal job waiting for me. As you lead me to employment, I will stay open to your guidance. 

Thank you for helping me find employment.

Amen.

Scripture:  “And my God will meet all your needs according to the riches of his glory in Christ Jesus.” — Philippians 4:19

Expert tip: Pray daily

We often turn to prayer when we are in need. However, if we use prayer daily, we can see more financial breakthroughs. Additionally, I’ve tried reading scriptures with reviewing my finances. Also adding bible verses to my budgeting sheets.

Scriptures for financial breakthrough to pray and reflect on

The word of God has messages of encouragement and guidance. Use these scriptures to reflect on or add to your prayers.

“Consider the ravens: they neither sow nor reap, they have neither storehouse nor barn and yet God feeds them. Of how much more value are you than the birds!” Luke 12:24

“But seek first the kingdom of God and his righteousness, and all these things will be added to you.” Matthew 6:33

“Sovereign Lord, You made the heavens and the earth and the sea, and everything in them.” Acts 4:24

What is the strongest prayer for financial breakthrough?

Prayers for a financial breakthrough are most potent when you believe in them and also take action.

Therefore, choosing and reciting a prayer that aligns with your beliefs and needs is essential. When you believe in something, it’s easier to take action to try to achieve your financial goals. You can also add scriptures for financial breakthrough to your prayers to make them more powerful.

For example, “Dear God, I kneel before you in prayer, believing in your ability to help me succeed financially. I know you will provide for me, help me make the right decisions, and relieve me from my financial turmoil. I trust you will help me pay off my debt and build wealth.” 

“If you believe, you will receive whatever you ask for in prayer.” Matthew 21:22

What is a good prayer for financial blessings?

A good prayer for financial blessings can also be a simple one.

Something like, “Dear God, thank you for all the blessings in my life. Thank you for blessing me with excellent health, loved ones, and a safe place to rest my head every night. I come before you asking for financial blessings among the many benefits you have bestowed upon me. Please grant me economic prosperity, and I will always try to honor your name.”

As it says in Philippians 4:19, “And this same God who takes care of me will supply all your needs from his glorious riches, which have been given to us in Christ Jesus.“

How do I pray to God for financial miracles?

You can pray to God for financial miracles by using prayers and scriptures for financial breakthroughs. As it says in Luke 18:27, “What is impossible with man is possible with God.”.

Therefore if you need a financial miracle, ask for one. Whether you need an extra $500 for a car repair or need money to pay rent, asking for blessings is the quickest way to get your prayers answered. Acknowledge that God is a provider and will provide for your needs. 

How do you pray for a financial breakthrough with a Bible verse?

You can pray for a financial breakthrough with a Bible verse by reciting it at the beginning or end of your prayer. If you don’t have any memorized, you can read verses from the Bible at the beginning or end of your prayer. 

After reciting Bible verses, take a moment to reflect on them. How can you apply them to your life? What significance do they have in your current situation?  

What to do after you pray?

The most important thing you can do after using prayers and scriptures for financial breakthrough is trust and take action. If you want financial stability, focus on budgeting weekly and allow God to guide you while putting together the numbers.

If you prayed to eliminate your debt, start taking action by creating a debt repayment plan, and trust God will help you choose the right one. 

It’s important to trust the prayer by taking action. Act as if your prayer has been answered. 

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Prayers are a powerful way to create financial change!

There is no shame in asking God for financial success. Prayers for financial breakthrough can not only help you out of difficult situations but also help you focus on being financially stable and starting a new chapter in life.

Choose a prayer from the list above or create your own based on your financial needs. Remember to commit to the prayer daily, believe, and take action. When you trust the power of prayer, your prayers for starting a new life with your money will soon be answered. 

The post 7 Solid Prayers For Financial Breakthrough appeared first on Clever Girl Finance.

Hearing the word recession creates a feeling of discomfort for many. After all, recessions come with a lot of negatives, like stock market declines, job losses, and more. But you can learn how to prepare for a recession and still thrive financially.

Preparing for a recession is essential to your financial security.

Knowing how it affects the economy and your finances and taking key steps will help you during an economic downturn. Let’s get into what it all means and how you can prepare for a recession.

So, what is a recession?

A recession happens when there is a negative GDP for two consecutive quarters. During a recession, there is typically a decline in industrial and trade activity. Some major implications that come with recessions include job losses and a high unemployment rate. Also a drop in real estate values and a decline in investment values.

Economies work in a cycle. That means they go through periods of expansion and growth, as well as periods of decline known as recessions. Or, more severely, depressions such as the Great Depression in the 1930s.

One example is the great recession of 2008, which was triggered mainly as a result of the housing bubble in the United States.

It’s essential for us to know how to prepare for a recession, as it can impact our careers, lifestyles, and finances.

What changes during a recession?

Recessions can be damaging to stocks and assets, causing them to lose value.

A recession could also cause interest rates to drop. The Federal Reserve may decide to cut rates to make it cheaper to get loans and borrow money in an effort to try to stimulate the economy.

In addition, this means you will see rates drop on your savings accounts too.

The government debt may rise as they pass bills for stimulus packages to assist those in need. And also to help the economy recover.

All of this doesn’t mean you shouldn’t invest during a recession, though.

In fact, if you’re wondering is now a good time to invest, it can be if you do it right and work on tackling any stock market fear you might have.

How to prepare for a recession financially

Recessions happen, but you can be ready for them. Here are ten key tips for how to prepare for a recession.

1. Assess your overall finances

Before you start to make a plan for a recession, consider what your finances look like right now.

For example, what are you currently paying for in your monthly expenses list? You likely have some necessary expenses, such as your mortgage or childcare.

But are there things that you really don’t need or can afford to cut back on?

For instance, dry cleaning, hair and nail salon appointments, restaurants, etc. Perhaps you’re spending too much on non-essential things and living a champagne lifestyle that you can’t afford.

In that case, cut back for the time being so you can use your money for more essential matters.

2. Ensure you can cover your basics before you invest or pay debt

Perhaps you assessed your finances and found out some surprising things. If you can’t afford your current lifestyle, or you are struggling to pay your bills without debt each month, it’s time to make some changes.

For instance, before using my money for investing or paying off debt, I like to be sure that I can pay for all of my basic necessary expenses. Rent, groceries, insurance, etc., are all things to pay for before doing anything else with my money.

If you need to make more income to afford your basic bills, consider a side hustle or a second job. Then you can change your focus to paying off debt, investing, building an emergency fund, etc. Doing so can help you in your future by preparing you for a recession.

3. Bulk up your emergency savings and keep it easily accessible

As you work on getting your finances ready for a recession, it’s very important to have emergency savings in place. In a recession, having an emergency fund can save you a lot of stress. It acts as a safety net with enough money to help you during difficult times.

You’ll avoid becoming financially over-extended or having to leverage debt just to get by. The importance of savings cannot be overlooked!

Save 3 to 12 months of expenses

To start, you want to put aside 3 to 6 months’ worth of your basic living expenses in an emergency account in the unfortunate event that you become unemployed.

And since recessions can be pretty unpredictable, aim to boost your emergency savings to 12 months of your essential expenses to have extra money if needed.

That much cash will give you ample time to find a new job. But remember, jobs can be harder to come by in an economy experiencing a recession.

Keep in mind that your basic living expenses are the essential things you need to survive; food, housing, core utilities, and transportation. Building your emergency fund is one of the most important steps when preparing for a recession.

4. Diversify your investments

Ever heard the saying, don’t put all your eggs in one basket? Well, the same line of thinking applies to your investments.

It’s important to have a well-diversified investment portfolio, such as a 3 fund portfolio. That means your investments should not all be tied up in one stock or one real estate property.

You want to make sure your investments are spread across multiple industries and areas so that if one industry or area experiences a decline, one investment decision doesn’t sink your entire portfolio.

For example, if you invest in the stock market, you can spread your investments across multiple sectors such as consumer goods, healthcare, technology, etc.

Investing with index funds and mutual funds are both great ways to diversify. You can also choose to invest in the real estate market and in small businesses.

How to invest wisely

As an investor, be sure to do your research, be clear on your investment strategy and objectives, and understand how risk averse you are. It will create less panic for you if a recession comes along.

A big mistake people make is that they start selling every investment they own when the economy dips because of emotions like fear or worry. It’s a bad idea in the long run.

If you have a clear plan for your investments and you’re in it for the long term, you are in a good place. Your investment is likely to weather a bad economy and come out on top.

Talk to a financial advisor if you have any confusion or feel stuck regarding what to do. (Find out: do I need a financial advisor?) Prepare for a recession by diversifying your investments wisely.

5. Create a plan to pay off debt once your essentials are covered

The last thing you want to do is worry about having to pay off debt in a bad economy, especially with the increased rates of unemployment. When focusing on how to prepare for a recession, debt payoff should definitely be a factor.

Paying off your debt will save you a ton of money in interest payments and put you in a better financial situation. Plus, you’ll also be able to put your extra funds toward bulking up your emergency savings and other financial goals.

So, after your basic expenses are covered, as discussed earlier, you can start using your excess income to pay off debt or save.

Prioritize high-interest debt

It’s a good idea to focus on paying off your high-interest debt before you consider ramping up on investing (meaning investing more than your usual amount, though you should always invest some if you’re able to).

If you have high-interest debt the cost of your interest payments may far exceed the return on your investment.

For instance, if you have credit card debt that has a 19% interest rate, then it makes more sense to pay off that debt as soon as you can, given that the average long-term rate of return on the stock market is ~8% to 10%. Reduce credit card debt if at all possible.

Obviously, your rate of return could be much higher, but you want to avoid speculating or trying to time the market.

Once your debt is gone, you can focus on investing a higher percentage. Find out more about creating a smart debt repayment plan, like the debt snowball worksheet method, and learn how to start investing.

As a side note, if you have no other debt and your investments are on track, you might consider paying extra toward your mortgage to pay off that debt, too.

6. Refinance variable interest debt into fixed interest

Interest rates typically decline during a recession. That means you may be in a good position to refinance things like mortgages or think about the pros and cons of refinancing a car.

Having a variable interest rate means that it can change over time, so getting a fixed interest rate for any debt you have is usually ideal.

Take advantage of the possibility of debt being cheaper if it makes sense for you. Remember, refinancing only applies to the debt you already have.

A recession may not be a great time to take on new debt unless it’s necessary and you’re absolutely sure you can afford it. Always have a payoff plan, no matter what.

7. Learn how to budget and live within your means

Living below your means or at least within your means is the key to building wealth. It also means you eliminate having to leverage debt to live your life—no more using credit cards to pay your bills.

Find out how to prepare for a recession and still live within your means.

Use your budget to focus on financial security

Determine what budgeting style works best for you and learn better budgeting techniques. Your budget will help you track your expenses compared to what you earn and highlight areas you can cut back on.

Your ultimate goal should be to widen the gap between your income and expenses as much as you can. You do this by finding out how to increase your income and reduce your expenses. Spend on necessities instead of luxuries, as discussed earlier.

Any leftover money can be used to create financial security, which can primarily be achieved through saving, investing, paying off debt, and making your money work for you.

Make a plan about how much you want to save, what other income sources you can create, and how you’ll pay off debt. Then give all your attention and any spare money to those goals.

When you make progress towards your financial goals, refuse to upgrade your lifestyle. There will be time for that when you are in a better financial situation, but if you’re focused on preparing for a recession, then don’t spend on things you don’t need for now.

Continue with your plan, and you will be in a much better place with your money.

8. Find more ways to create multiple streams of income

Millionaires usually have several income sources, and for good reason. Creating multiple sources of income ensures that you increase how much you have coming in, and it can increase your peace of mind during economic uncertainty.

It also acts as a buffer in case you lose a source of income. Here’s how to get started with making more money.

Start a side hustle

Is there something you’re passionate about doing? Something you do that you get complimented on all the time?

Consider starting a side hustle to generate some additional income. There are also a variety of recession-proof businesses you can consider.

For me, starting a side hustle has helped me bulk up my savings, pay off debt, and just be generally more prepared for difficult financial circumstances.

Consider passive income opportunities

Setting up passive income sources is also a smart idea. Passive real estate investing like REITs (Real Estate Investment Trusts), royalties, and selling digital products like eBooks can all be sources of passive income that can help you in tough times.

Dividend investing can also be a passive income source, as can becoming a landlord. There are many opportunities, so as you consider the resources you have, find out which ones will work for you.

9. Dual income household? Learn to live on one income and save the other

One of the savviest financial moves you can make to prepare for a recession is to shift to living on one income and saving the other. Getting frugal with your budget and reducing expenses can free up a lot of money to save for a rainy day fund.

The goal is to reduce your cost of living enough to free up the second salary altogether.

You will bulk up your emergency fund and not rely on a second income in the event of a job loss. Living below your means is the best way to prepare for the unexpected.

10. Consider finding a recession-proof job if you are in the job market

Another way to prepare for a recession as an employee is to consider recession-proof jobs. Healthcare workers, teachers, and pharmacists are types of jobs in demand even during a recession.

If you aren’t looking for a job, it’s still important to be prepared. Expanding your skills is excellent for job security, especially when it comes to wages and working remotely.

Make sure to add any new skills to your resume to stay prepared in case someone is hiring for a job you’re interested in. 

Another idea for jobs is remote work. Companies are shifting towards remote positions now more than ever. Since the best work from home jobs are on the rise, you might consider applying for some or starting a home-based business.

While not every remote job is a good choice during a recession, it is helpful to have it as an option.

Expert tip

Recessions are going to happen, so it’s important to always know how to prepare for a recession. In my opinion, the best bet is to take the approach of being over prepared.

Try doing several things to improve your financial situation, such as budgeting, saving money, and looking for a new job or side hustle. The more you prepare, the better you will feel and the more your finances will improve.

How much money do you need to survive a recession?

The amount of money you need to survive a recession depends a lot on your savings and expenses, but a good place to start is by setting aside emergency cash.

You should try to have 3 to 12 months of your core expenses saved to prepare for a recession, and you can always have more than this if you think it’s necessary and for peace of mind.

In addition, having multiple income sources from several jobs or side hustles diversifies your income and can help you in a recession. With many income sources, your finances are less likely to take a big hit, even during a recession.

What should I buy in a recession?

You should buy things in a recession that are likely to be cheaper and make the most sense financially for example your core essentials. It’s a good time to invest, especially in stocks and potentially real estate.

Make the investments that you can afford after you pay your bills, of course.

Beyond investing, what you buy during a recession really depends on your goals and financial obligations. If you have savings and are doing well financially during a recession, you may be able to spend as normal.

Make sure you know how to spend money wisely before making unnecessary purchases.

What happens to money you have in the bank during a recession?

The money you have in the bank during a recession is generally still quite safe. Just be sure that your bank is FDIC insured (which will cover amounts up to $250,000 for each depositor), and you don’t need to worry about losing your money.

However, the interest rates for your accounts may drop, so this is something to be prepared for.

There is generally no reason to remove your money from the bank during a recession, and it’s unwise to panic and take out your investments, as well.

The best thing to do during a recession is to wait it out, knowing that the economy will return to normal and your money will still be in the bank. The stock market also does well generally over time, so leaving your investments alone is a good idea.

How much money should you hold in a recession?

The amount of money you should hold in a recession in cash is whatever amount you have for your emergency fund. 3 to 6 months of savings is the commonly accepted amount, and it will likely be enough to help you get through difficult times during a recession.

If you want to keep more cash than this, you can, of course. Even up to a 12-month emergency fund is a smart idea.

But beyond that, it is pretty safe to have your money invested in most cases. You don’t want to miss out on interest, after all!

How can you make money in a recession?

Knowing how to make money in a recession is all about looking for opportunities. Find a job that is likely to stick around during a recession e.g. a recession-proof job, start a side hustle, invest money, and look for ways to earn that isn’t affected by the recession.

Also, consider careers and money-making opportunities that thrive in a recession, like healthcare, grocery stores, etc.

In addition to this, continue to make money as usual by not quitting your day job, if possible. One of the best ideas for maximum financial security during a recession is to have a full-time job and a side hustle. The more hours you can work, the more prepared you are and the more financial wellness you have.

Articles related to preparing for a recession

If you enjoyed this article about preparing for a recession, you’ll like these other reads!

• 19 Best Recession-Proof Jobs For All Skill Levels
• Should I Buy A House Now Or Wait?
• 14 Best Recession-Proof Businesses Ideas You Can Try!
• What Is an All Weather Portfolio? Is it Right for You?

Start leveraging these tips on how to prepare for a recession today!

While we can’t predict when a recession will happen, it makes sense to always be prepared for major life events. Apply these tips for how to prepare for a recession properly and make good financial decisions.

That way, you aren’t taken off guard financially, and you will have everything in place to prevent financial disaster. Trying out extreme frugal living, bulking up your savings, and creating multiple streams of income will help secure your financial wellbeing.

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In times of economic uncertainty, or due to performance or work dynamics, you might get to a point where you start to worry about losing your job. The loss of a job can be extremely stressful and can also create a lot of financial hardship.

If the thought "I'm worried about losing my job" has crossed your mind, it's time to create a plan to minimize the financial impact in the event that you do lose your job.

Constant worrying can cause physical and emotional stress and in turn, inhibit your ability to take strategic action before anything actually happens. Creating a financial plan is one way to help manage your fears and reduce stress and anxiety about a job loss.

We are going to provide key actionable steps to take if you have a fear of losing your job or what to do if you lose your job, so you can prepare yourself financially!

7 Key Steps to take if you are worried about losing your job

Here are some key money tips to help you ease the transition until you find new employment if you have a fear of being fired or do happen to lose your job.

1. Start bulking up your savings

The first thing you want to do if you have a fear of being fired is to start saving as much money as you can while you are still employed. Studies show that people who have access to financial resources cope better with the overall impact of job loss.

This is because when you are less worried about finances, you do better from an emotional and mental health perspective.

So it's essential to prioritize the importance of savings.

To bulk up your savings effectively, it's important to lay out all your expenses. You also need to determine how much it costs each month for you to survive. A good starting point for how many months you should save for is 3 to 6 months.

As you determine what this amount is, also consider what things you can cut back on to minimize your expenses during the period you may be out of work. This would include any non-essential spending and purchases.

This savings is essentially your emergency fund and you should build funding it into your budget as soon as possible. This is the most important step if you are afraid of losing your job.

2. Be more frugal

So, what's one of the best things to do if you are about to lose your job? Learn how to be more frugal! Reducing expenses is essential, but you also need to become savvier with your money so you can keep more in your wallet.

Start couponing to cut your grocery costs, shop secondhand for clothing when you need it, and use cashback apps. There are tons of crazy ways to save more money, so you can bulk up your bank account and reduce your job loss anxiety!

3. Begin the process of looking for another job

The next step of taking strategic action is to get ahead by beginning the process of finding another job. So, start your job search now if you have a fear of being fired. Carve out some time to update your LinkedIn profile and make your resume attractive to employers.

You can also start doing research on companies and positions you can apply to. If you need assistance updating your resume or preparing for interviews there are several amazing websites with career advice that you can leverage. Be sure to check out our list of the best recession-proof jobs too!

You can also find tons of job postings on sites such as Indeed, Careerbuilder, and LinkedIn.

Don't forget to dig into your professional and personal network to let people know you are looking for work. You never know who might give you a lead to help you find a new job.

4. Take advantage of current employment benefits

Be sure to take advantage of any current employment benefits before losing your job. For instance, leverage your health insurance coverage to get any medical concerns you have attended to and fill your prescriptions.

Choosing multi-month over monthly prescriptions if possible can save you a ton of money and carry you over while you are out of work. You can ask your doctor about this option.

Healthcare can be a massive out-of-pocket expense. So you want to make sure that if you have benefits to use, you actually use them if you need to before you lose your job.

Be sure to find out what the options are to extend your healthcare coverage after you are laid off.

Also, if you have vacation or sick days, ask your employer what happens in the event of a job loss. There might be a payout for the unused days and you can put this money towards your emergency fund. Knowing these details in advance can help reduce job loss anxiety.

5. Research unemployment benefits

The next step is to research the details of unemployment benefits if you are about to lose your job. Unemployment benefits are intended to replace lost wages in the event that you get laid off and qualify to receive this benefit.

Formally known as unemployment insurance benefits, this benefit covers workers who have lost their jobs through no fault of their own and meet certain other eligibility requirements.

You can determine the qualification requirements for unemployment by visiting the website for your state's unemployment insurance benefits. Your state's website will also provide you with specific details on how to file. Filing for unemployment compensation immediately is what to do if you lose your job.

6. Explore additional sources of income

Exploring additional sources of income can help to minimize the impact of losing your job until you find a new one. Some ideas to make money without a job include:

Sell stuff for cash

The first thing I did when I was worried about losing my job was look for stuff to sell for money. You won't believe how much stuff you have that you probably don't even use that you can sell to sock some money back. So start looking through things you own that you can sell online for cash!

You can sell stuff on sites such as eBay, Etsy, and Facebook Marketplace. Not only do you make some extra income, you declutter your home too! So, it's a win-win.

Start freelancing

If you think you are about to lose your job then consider finding freelance work to supplement your income. You could start it as a side hustle beforehand so you can have money flowing in. There are plenty of ways to start freelancing.

For instance, you could become a freelance writer, virtual assistant, or even a freelance marketer. Plus, these freelancing gigs pay pretty good money so you can easily bulk up your emergency savings fast.

Find a part-time job

Another option is to find a part-time job. That way, you have additional income just in case. You could even find work-from-home jobs.

For example, data entry, transcription, and bookkeeping are just a few good-paying part-time jobs you can do from home. You could also work them as weekend jobs. Having a backup job reduces job loss anxiety.

Keep in mind that in order to stay afloat, you might need to take a job below your skillset or work multiple jobs and that's ok. There's no shame in doing what you need to do to boost your income before you find another job.

Start your own business

You may be thinking "How can I start my own business if I don't have the money?" Well, the great news is, there are plenty of businesses you can start with no money! For instance, pet sitting, flipping free items, and cleaning houses, are all things you can start with no money.

For more ideas check out our post "A Guide For How To Start A Business With No Money."

This is the perfect way to boost your income if you are about to lose your job! Plus, it may just be the motivation you need to finally pursue something you love instead.

Get a roommate or rent out a spare room

Basic living expenses are on the rise. Which can make things much more difficult financially. However, you can get crafty and reduce even your essential living expenses.

For instance, you can get a roommate to split the rent with. Or, you could even rent out a spare room on Airbnb! This can drastically reduce how much you are paying in rent or mortgage payments.

Of course, creating multiple streams of income is a fantastic financial move whether you are about to lose your job or not. In fact, millionaires have an average of seven income streams...so keep that in mind! The more income streams you create, the less financial worry you have.

7. Expand your skills

Expanding your skillset is one of the best things you can do if you are worried about losing your job. Learning new skills can make you a valuable employee or even help you continue on a new career path.

The great news is, there are plenty of ways to learn new skills without spending a ton of money. For instance, Google offers free career courses on topics such as UX Design, Data Analytics, IT Support, and Project Management. You can also take free courses on Canva Design!

Learning new skills will drastically reduce your job loss anxiety because you will feel confident in your ability to find another job fast.

Make a backup plan if you're worried about losing your job!

Now you know what to do if you lose your job or have a fear of being fired. Thinking about losing your job can be scary and stressful but with a plan in place, you'll be in a better position to weather the worst-case scenario.

Don't allow job loss anxiety to prevent you from taking action. Instead, plan ahead for the worst and hope for the best. It will give you the peace of mind that you will get through any temporary impact of a potential job loss.

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