Money motivation

How to escape from a money rut

Sometimes, climbing out of a money rut starts with a pep talk — to yourself.

“I like affirmations and speaking out loud,” says Giovanna Gonzalez, a financial educator and author of “Cultura & Cash.”

If you find yourself repeating frustrating money patterns, such as overspending or struggling to pay off debt, that kind of attitude shift can help get you on a different path, Gonzalez says.

Financial experts also recommend using the following methods to climb out of a money rut:

1 Pick an exciting goal

Sometimes our money goals can inspire us to think bigger and more creatively about our financial lives. Elaine King, a certified financial planner and founder of the firm Family and Money Matters in Miami, says she finds people often need a “money motivation” or an exciting goal to inspire them to adopt better financial habits.

Give yourself a dollar amount and a goal date, and then you can start working toward it by setting aside small amounts of money from each paycheck.

2

Break big tasks into smaller ones

If your goal is overwhelming, divide it into smaller pieces, suggests Don Grant, CFP and partner at Sabre Wealth in Wichita, Kansas. If you have $30,000 in high-interest consumer debt, for example, then break it into smaller wins of paying off $5,000 at a time by different dates, for example.

3 Unload debt that’s dragging you down

With some progress under your belt, you can settle on a sustainable approach to knock out the debt, says Sharon Lechter, author of “How Money Works for Women.” She suggests selecting either the snowball method, where you first pay off the smallest debts and work up the momentum to tackle the bigger ones, or the avalanche method, where you pay off the debt with the highest interest first.

4 Take a close look at spending patterns

Examining your current spending habits can inspire small tweaks that lead to increased savings, Lechter says. She suggests categorizing how you spend your money over the last 12 months and then comparing those averages with ballpark recommendations.

For example, the 50/30/20 budget suggests spending 50% of your after-tax income on needs, including minimum payments on debts; 30% on wants; and 20% on savings and debt payments beyond those minimums.

This article was provided to The Associated Press by the personal finance website NerdWallet. Want to suggest a personal finance topic that Quick Fix can address? Email apmoney@ap.org