Overcoming Money Problems: Short-Term Fixes and Long-Term Solutions

Money problems cause a lot of stress for many people. In fact, 63% of people who answered the poll said that money problems cause a lot of stress. When money is tight, the first thing you should do is get your finances in order right away. This means making an emergency budget, cutting spending on things that aren’t necessary, negotiating bills, and looking for quick ways to make money. In order to be financially stable in the long term, you’ll need to save money, make more money, learn more about money, and develop a healthy money attitude. The parts that follow explain what you can do and where to find help for both short-term and long-term financial health.

Short-Term Ways to Feel Better

• Make a budget for emergencies. Write down everything and cut it down a lot. Experts say that during a crisis, you should write down your spending so that you can see where every dollar goes. Pay for things like food, shelter, energy, getting to and from work, and health care that you need to survive first. There are many free planning tools and apps you can use, like Mint, EveryDollar, or a simple spreadsheet, to keep track of your money. Immediately cut what you can if your total expenses are higher than your pay. At the end of the month, put any extra money, even $5, into savings to have on hand in case of a disaster.
• Cut costs that aren’t necessary. Get rid of frills and luxuries. The NFCC says to stop going out to eat, paying for entertainment, and other “nice-to-haves.” For instance, stop or lower your gym, streaming, and paper subscriptions, and cook at home instead of going out to eat. For a month, write down everything you spend, even small things like that $3 coffee or snack you have every day. It’s amazing what secret costs show up when you do this. As a general rule, you should spend 50% of your income on necessities like rent, utilities, insurance, food, and debt payments. Spend 30% on wants, and put at least 20% toward saves or paying off debt. A small budget for luxuries that is put into savings or paying down debt can make a big difference.
• Cut back or put off big costs. Think about short-term ways to save money, like taking the bus or getting a cheaper phone plan. The NFCC says that if you can, you should downgrade big-ticket things like selling a second car or moving to a cheaper home. Talk to your service providers and lenders about putting off or changing your payments. A lot of utilities and renters have programs to help people who are having a hard time. Credit card companies may also offer hardship plans, as we saw with COVID relief. Be careful, because deferments usually mean you still owe the money later, and interest keeps adding up. If you need to stop paying your bills, make a list of them so that when things get better, you can start paying them off again starting with the ones with the highest interest rates.
• Take action against debt. If credit card or loan debt is making things hard, look into ways to lower it. First, try to work out a better payment plan or lower your interest rate with each loan by calling them individually. The FTC says to be polite but persistent, because credit card companies will usually work with you to make a plan that you can pay. Also, think about getting help from a professional. A good nonprofit credit counseling service can look over your finances, help you make a budget, and negotiate on your behalf. These advisers are trained to make plans for managing debt, and they may be able to help you combine your debts or sign up for a program to help you manage your debt. (The NFCC and United Way offices in your area can put you in touch with licensed advisers.)
• Make more short-term money. Find ways to get extra money right now. If you can, ask your boss for extra hours or get a part-time job. You can have a yard sale or sell clothes, tools, and furniture that you don’t need online. Freelance or gig work can help right away. For example, Udemy and Upwork offer jobs like tutoring, driving for delivery services, and writing and designing. In a cash emergency, the NFCC says, “Find income where you can.” Even small jobs like babysitting, doing yard work for friends, or sharing rides can help you get cash quickly. Every extra dollar made helps close the budget gap and boosts confidence.
• Ask for and get help. Use what you have access to. The NFCC (nfcc.org) and USA.gov’s Money and Debt pages have free information on planning, credit, and getting out of debt. If you have too much debt, it’s free to talk to a charity counselor. Be careful of for-profit “debt relief” companies that charge lots of money. ConsumerFinance.gov and USA.gov are two government websites that have step-by-step tips on how to make a budget and get out of debt. Also, check to see if you can get any help, like jobless benefits, SNAP food aid, Medicaid, or local charity programs, to pay your bills right away. If they can, family or friends may also be able to help in the short run.

Building financial health for the long term

• Save money in case of a disaster. Once you have a budget in order, start putting money away. The CFPB says to save enough for 3–6 months of living costs, but even a small fund can help protect you from future surprises. You could put your savings in a different checking or savings account at your bank or credit union. This will keep them safe and not too tempting. Set up a payment that happens automatically every time you get paid to go into savings. It adds up to more than $25 a week. Keeping track of progress (either visually or with an app) and enjoying big steps forward keeps people motivated. You are less likely to need high-interest loans in the future if you save more now.
• Boost your ability to earn. Find ways to make more money over time. You might want to ask for a raise or a promotion at your current job. Studies have shown that even a small raise is worth fighting for when it’s earned. Before you go to a meeting to ask for a raise, make a list of your most recent accomplishments and market prices. Both Indeed and Harvard DCE recommend collecting data and practicing your pitch. Outside of work, learn skills that are in high demand, like coding, digital marketing, or trades that can help you get paid more. If your side jobs are making you money, keep doing them. Some popular ideas are pet sitting, tutoring, paid writing, and graphic design. One expert says that many businesses hire part-time workers through sites like Fiverr and Upwork. You can also make money by renting out a free room or selling digital goods. Do not spend your extra money on new things. Instead, use it to reach your financial goals (like paying off debt or saving money).
• Be smart about your debt and spend. Low-interest debt is better in the long run. You can save and spend more money if you pay off your debts in a planned way, like with the avalanche or snowball method. Once you’ve paid off your debts, look for low-risk ways to build your wealth. For example, put money into retirement accounts like a 401(k) or IRA, especially if your workplace matches your contributions. Also, look for high-yield savings accounts for emergency funds and learn the basics of investing, such as index funds. Start small and early; small monthly purchases can grow into big ones over time. (Remember that investing has risks, so learn as much as you can or talk to a financial expert.) For decades, saving and spending regularly has been shown to be a safe way to get ahead.
• Get better at managing your money. Make it a habit to learn about money. You’ll make better choices if you know more. Free online lessons (like Khan Academy’s personal finance modules), library books, and reliable blogs (like cfpb.gov’s guides, NerdWallet, etc.) are all good places to start. TD Bank suggests “investing a few hours” in study, such as reading articles about budgeting, taxes, credit, and investing. They also suggest meeting with a financial advisor or going to workshops put on by the bank. To learn more, you can also get personal finance emails or listen to podcasts like Planet Money and Stacking Benjamins. Knowing the basics (like how to budget, save, and check your credit score) and keeping up with the latest financial news will give you power. As a pro tip, make a list of all the confusing financial topics you want to learn more about and pick one every month. This could be anything from “how credit card interest works” to “the pros and cons of a home equity loan.”
• Develop a good attitude about money. Beliefs are just as important as numbers when it comes to long-term change. When it comes to money, try to have a “growth mindset”: think that things can get better if you work at them and learn new things. Think “I can learn to manage my money” instead of “I’m bad with money.” Celebrate small wins as progress, like getting a loan paid off or your savings rate going up. Don’t have a “I’ll never have enough” mindset; it can make you anxious, spend too much, or be afraid to invest. Instead, be thankful for what you have and see problems as chances to learn and grow. For example, instead of seeing planning as a punishment, see it as a game or a way to learn. Focusing on wealth makes you more creative and strong; it makes you more likely to save and share instead of hoarding out of fear. Finally, make sure that your spending and goals are in line with your values. Set clear targets (SMART goals) and keep in mind that over time, small, steady steps add up to big changes.

Advice and Helpful Links

• Make your plans clear. Figure out what you want, like having a $5,000 emergency fund, not having any debt, and saving 15% of your pay. Any goals you write down, whether they are financial or emotional, become real. Be clear, honest, and eager at the same time. You can set aside money each month for them by including them as line items in your budget.
• Get help and tools. Use the CFPB’s savings tools, Bankrate’s calculators, or BetterMoneyHabits’ planning guides, which all offer free budgeting templates and calculators. In their apps, many banks let you keep track of your spending. For example, Bank of America has a Life Plan tool that lets you keep track of your goals. Get help from other people. Online forums, financial coaching groups, or family and friends who already have good habits can hold you responsible.
• Continue to learn. Learn about money is a constant process. Look at reliable sources: New tips can be found on U.S. government websites (like CFPB, USA.gov, and FTC) and on websites run by nonprofits. Check with your neighborhood library or community center to see if they have any workshops. Trust tried-and-true advice instead of “quick fixes”: make a budget, save money, spread your income around, and spend wisely.

If you follow these steps, your worry about money will turn into trust over time. Short-term cuts and smart moves with debt can give you breathing room. You are in charge of your money if you have a good attitude, save money, and learn new skills over time. Every dollar you save, every bill you pay off, and every bit of information you learn brings you closer to being financially stable.