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Coming to terms with poor financial health can be uncomfortable. But for what it’s worth, you are not alone. Many people don’t talk openly about their personal financial concerns, but that doesn’t mean they feel financially secure. Financial stress is very common.

And while it’s totally normal to want to ignore it, things don’t usually get better on their own. When do they get better? When you honestly assess your current money situation. Then you can decide where you want to be in the future.

“Whatever mistakes or bad circumstances got you to this point are in the past, and the past does not define you. Anyone can turn their situation around, even if it seems impossible in the moment.” says Thomas Maluck, an NFEC Certified Financial Education Instructor.

Do you want to save for a down payment so you can buy your own home? Maybe you dream of travels to far-flung countries, or the freedom to leave your day job behind.

You will be amazed at how much you can accomplish by making small, realistic changes. When you shift how you spend, how you save, and how you handle debt, you can start to turn things around.

So, if you’re ready to get your financial life back on track, read the six tips below. Even if you feel discouraged right now, a brighter financial future is within reach if you’re willing to act today.

Table of Contents

1. Take control of your finances

2. Learn from your mistakes

3. Commit to one positive financial habit

4. Assess your debt situation

5. Ask for help

6. Consider the benefits of a personal loan

1. Take control of your finances

It’s natural to feel hesitant about making financial decisions. And if you’re struggling with money, it may be tempting to throw up your hands. Hearing news reports about the uncertainty of the economy may be confusing.

In fact, doing nothing often feels like the safest thing to do.

The first step toward improving your financial outlook is to understand how you got off track in the first place. It might be job loss, a major medical bill, or a life-changing event such as a divorce. 

Or maybe you got too busy or distracted and stopped paying attention to your finances. If that’s the case, it’s important to recognize how even small habits can be roadblocks on the way to financial stability.

Taking an honest look at your current financial situation is a critical first step. What’s good? Perhaps you got a raise recently or a better-than-expected bonus. What’s not so good? Has your debt level increased, or have you been hit with an interest rate hike?

When you have all the relevant facts, it’s easier to find the best action you can take to change course. That might be to automatically direct part of that salary increase into a savings account. Or maybe it’s picking a new strategy for chipping away at that debt as aggressively as possible.

There is always something you can do now. And if you feel overwhelmed, that’s a sign that you need to narrow your scope.

2. Learn from your mistakes

Many of us have made financial decisions that turned out to be costly mistakes.

Unwise use of credit is a common money mistake. Generally, it’s been relatively easy to open a credit card account, and even easier to rely on credit to live beyond one’s means, at least for a while.

Of course, credit is an important financial tool. But it can become a trap if you don’t understand the annual percentage rate (APR) and carry revolving debt from month to month.

Emotional spending, like shopping when you are sad or bored, is another common financial misstep. Some people get in trouble because they lack a realistic budget, or fail to consistently pay bills on time.

Running from poor financial decisions only hurts us in the end. So why not adopt a growth mindset instead? With a growth mindset, sometimes called a “beginner’s mind,” you can acknowledge that you’re only human and did your very best with the information you had at the time.

This puts you in a frame of mind to understand what might lead you to overspend, or why you ignore your budget. And then you will be able to make different choices..

“First and foremost, if you are feeling financial stress, be kind to yourself,” says Maluck. “Your money does not determine your self-worth.”

And remember, mistakes can help you succeed if you can learn from them.

3. Commit to one positive financial habit

As you dig into the process of putting your financial life back on track, you could find yourself overwhelmed by the list of “musts.” Must save more. Must spend less. Must pay off debt.

Financial anxiety can push you to shift from one priority to the next, before any one effort can bear fruit.

Instead, allow yourself to pause and choose a small financial habit to change, one you know is within reach. It might be paying $20 more than your minimum credit card payment each month or getting rid of one streaming service.

One small success will lead to the next, and every dollar will add up over time. Most important, you’ll gain confidence that you can develop positive financial habits and tackle even bigger goals.

4. Assess your debt situation

If you are struggling to find financial stability, debt is likely a part of the problem.

First, it’s helpful to understand exactly how much debt, including credit card balances, you have. Then assess what is good debt and bad debt for your individual situation. Generally speaking, good debt involves loans or credit tools that help you reach financial goals. Debt can be bad or damaging if it puts your financial health at risk.

While it’s always important to build savings, making it a priority to pay down your most expensive or riskiest debt will make a significant difference in your finances. When you are out of debt, you can ramp up your savings.

In addition, explore every option you can to reduce your interest payments. If you carry a balance across one or more higher-interest credit cards, you may be able to consolidate that debt and cut down the total amount of interest you pay.

5. Ask for help

Many of us circle around our financial woes and try different tactics, but never manage to make much progress. This can make the situation feel hopeless.

“If there is anything you do not understand about your paycheck or your bills, it’s time to ask for help,” says Maluck. “You need to know how every dollar enters and exits your orbit.”

An experienced and trustworthy financial professional can work with you to set realistic, reachable goals for the short term. They can help you with a debt reduction strategy and lay a solid foundation for future savings and investments.

You could also call a nonprofit credit counseling service to help you learn how to develop a workable budget. Or consider asking a friend to be your accountability partner as you work on new financial habits.

6. Consider the benefits of a personal loan

When you’re trying to get back on track financially, it often makes sense to consolidate debt. This is particularly true if you have several high-interest loans or credit card balances.

Consolidating into a personal loan could help. A personal loan is an installment loan with a fixed rate and set repayment term. It can make budgeting easy and predictable with one set regular monthly payment.

Another benefit of a personal loan is that you may be able to shave years off your repayment time compared to the length of time it could take to pay off revolving credit when making minimum monthly payments.

A personal loan to consolidate higher-interest debt could also help you save on interest. Because you lock in your interest rate for the term of the loan, a personal loan eliminates the risk of variable interest rates and rising payments tied to revolving loans. Even small interest rate increases can cost you more money on variable rate debt.

Flexibility is another benefit of a personal loan. You can choose the repayment term that fits your financial situation, from 36 to 84 months. With Discover® Personal Loans, for example, if you get approved for a $15,000 loan at 12.99% APR for a term of 72 months, you pay just $301 per month. 

If you want to get your financial life back on track, Discover can help you get started with lending options tailored to your individual situation.

For example, a personal loan could help you save money on interest while you pay down debt. To see what you could save, try our debt consolidation calculator.Debt Consolidation Calculator

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