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It can seem like no matter what you do, you can’t get your financial life in order. While this could be due to extenuating circumstances, it could also be that you keep making the same common missteps over and over again.

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I spoke to experts to find out some of the most common reasons people struggle with their finances, plus how to fix these problems so you can break the cycle and get back on track.

Are you avoiding your financial problems?

“Denial and procrastination” are often the main factors that keep people from getting their finances in order, says Bobby Rebel, CFP, personal finance expert at Tally.

“So many people just avoid dealing with their finances,” he said. “In some cases, they literally don’t open the envelopes with the bills, or if they’re out of paper, they just don’t go in.”

How to fix it? “The truth is, you can’t get your finances in order until you know what numbers you’re dealing with,” Rebel said. “In most cases, the truth is not as terrible as feared. By looking at the real situation, you can start making a plan.”

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Derek Hatfield /

Are you disorganized?

Maybe your finances aren’t in order, they’re literally not in order.

“An organization can screw up your finances,” says Gary Detweiler, an expert financial services and fintech consultant. “When you’re not organized and planning, you can miss deadlines, pay for things you don’t need, like auto-pay subscriptions, and find yourself in a chronic financial bind.”

How to fix it? “Create an organizational system that works for you,” Detweiler said. “For some, it may be a paper-based planner, while others may use online systems or apps that help you plan and organize. Make it a habit to check in at least weekly.”

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Kite_rin /

Are you living beyond your means?

“One of the biggest money mistakes in America is living more than you make,” says Rachel Cruz, personal finance expert and author of Know Yourself, Know Your Money. “Accumulating credit card debt and buying a car you can’t afford to live the lifestyle you think you need will keep you living paycheck to paycheck.”

Even small expenses can add up and lead to debt.

“One expense area that’s easy to justify is drinking coffee on the way to work or eating out,” says Chalmers Brown, Lead Solutions Architect at Unit21. “Five bucks here and $10 there doesn’t seem like much, but add it up at the end of the month and you might be surprised to see how much of your paycheck goes toward something that will be there and gone in minutes. “

How to fix it? “You have to take debt off the table to win with money,” Cruz said.

This may mean downgrading your lifestyle so you don’t keep piling up debt. You can drive an older car, downsize your home, or start small by cooking more at home and eating out less.

“All these sacrifices will help you get out of debt and build wealth,” he said.

Are you in credit card debt?

If you’ve consistently lived above your means, you probably have credit card debt that you can’t seem to get rid of. Even if you keep transferring debt to new credit cards with promotional interest rates, you should have a plan to eventually pay off this debt.

“If you don’t have a consistent plan to pay off the large balance before the promotional period expires, you can be left with a large balance, accruing very high interest rates,” said Charles Liu, director of financial planning and analytics for SoundCloud Creators.

How to fix it? “At Ramsey Solutions, we recommend getting out of debt using a debt snowball,” Cruz said. “Here you list all your debts, from smallest to largest, regardless of interest rate. You’re going to attack the smallest debt with what you can and make minimum payments on the rest. After paying off the smallest debt. , roll that payment to the next one.”

“What we’ve learned is that debt is not a problem of income, it’s a problem of behavior,” he continued. “Having these little wins along the way helps build momentum and keep you going.”

You don’t automate your savings and investments

If you’re living paycheck to paycheck, you’re probably not investing regularly in your savings and investment accounts, which will hurt you in the long run.

“Relying on willpower alone to regularly save as much as you intend is like asking someone to avoid dessert 365 days a year,” says Janet Alvarez, personal finance expert at Wise Bread. “Despite our best intentions, this is unlikely to happen.”

How to fix it? “Set up automatic transfers from checking to savings, set up your 401(k) plan with 1% annual contributions and download apps like Acorns to help you invest automatically,” Alvarez said.

Since this money won’t even reach your checking account, you won’t miss it and will learn to live on less.

You don’t invest at all

Not automating your investments is wrong, but not investing at all is worse. Fidelity Investments vice president and branch manager Leanne Devinney said this is a common reason people can’t get their finances in order. Also, some people who invest will cash out very quickly.

“Market volatility can be scary, but instead of looking out for the long term, some people panic and react to market events by pulling their savings out of their investments, which can have a negative impact on their ability to retire or pursue their finances. goals,” he said. “Other people don’t invest at all because of fear and the unknowns involved.”

How to fix it? “One way to break this cycle is to spend some time with an advisor studying how your money is invested, and make sure your investment plans have contingencies that can help address the need for liquidity should an emergency arise, protection and growth,” Devini said. “Ensuring certain safeguards are in place can help provide greater peace of mind.”

Are you putting all your eggs in one basket?

“One bad financial habit I often see is the tendency for people to put all their eggs in one basket. “Many people only look at the stock market when they’re ready to invest in the future,” says Kurt Carlton. Founder of New Western Acquisitions. “They forget the importance of diversifying their portfolio to reduce risk.”

How to fix it? Make sure you’re invested in a good mix of assets, including mutual funds, stocks, bonds, real estate and retirement savings accounts.

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Custom Designer /

Are you renting instead of buying?

“In order to have the latest and greatest things like technology, cars and furniture, some people rent those things instead of buying what they can afford,” says Stephanie Jones, editor-in-chief of the Personal Branding Blog. “Over time, you’ll end up paying more than the product was originally worth.”

How to fix it? “Instead of basically ‘renting’ these things, buy what you can afford and save for what you really want,” Jones said.

PeopleImages / Getty Images

PeopleImages / Getty Images

You get thrown off easily when things don’t go according to plan

Even if you have a financial plan, it’s almost certain that life will throw a wrench in those plans once in a while.

“The main things that throw people off financially are often unexpected setbacks like losing a job, caregiving and medical debt,” says Meredith Stoddard, vice president of life event planning at Fidelity Investments.

How to fix it? “When you get pushed around, it’s important not to give up completely,” Stoddard said. “Clean yourself up and start over. Finance is one area where persistence and perseverance really pay off over time. Your future self will thank you for your efforts, even if they aren’t perfect.”

blackCAT / Getty Images / iStockphoto

blackCAT / Getty Images / iStockphoto

You just don’t know how to get your finances in order

“One very good reason you can’t get your finances in order is because no one ever taught you how,” says Stephen Dalby, founder and CEO of Gabb Wireless.

How to manage your finances isn’t a subject that’s usually taught in school, so unless you’ve done your own research, you might not know where to start.

How to fix it?There’s no shame in taking personal finance classes as an adult,” Dalby said. “Whether it’s the Dave Ramsey method or something else, there are plenty of options to take courses to help you get a healthy handle on your finances. “.

You may also consider contacting a financial advisor. Whatever you choose, educating yourself about personal finances can be especially important if you’re navigating money matters with a partner.

“If you have a spouse or significant other involved in finances, you both need to be on the same page,” says Misty Larkins, president of Relevance. “To help, take a finance class together or hire a financial advisor who can help be an objective third party and guide you both in making wise financial decisions.”

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Gabriel Olya contributed to the reporting of this article.

This article originally appeared on The main reasons why you can’t get your finances in order and how to fix them


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