Have you ever found yourself going down a rabbit hole of information and getting overwhelmed a short way in?
That’s how many people seem to feel about personal finance.
It’s no secret that there’s a severe lack of financial literacy in the United States, and most people I know aren’t interested in the subject because they think it requires too much effort.
There are numerous ways to budget, manage your money, track your spending, pay off debt, invest, and the list goes on.
Which way is right, and which way is wrong? What should you try first?
Before you feel tempted to throw the towel in on developing a skill that can help you succeed in life, here are a few tips to help you feel less overwhelmed by personal finance.
Avoid Information Overload
The first thing you need to do is stop overloading yourself with information. This is extremely easy to do with all the answers at our fingertips. Most of us don’t think twice about googling the answer to something, but that’s exactly where overwhelm can start.
I haven’t experienced this with personal finance, but I have experienced it with freelancing. I researched how to be a successful freelancer for weeks and never took any action because I suffered from analysis paralysis.
Do yourself a favor and stop before you get there. I know there are many resources out there (including this blog!) that want to point you in the right direction, but you need to figure out where you’re going first, otherwise you’ll have 10 different sets of directions with no idea where to start.
So instead of subscribing to 100 different personal finance blogs, checking out 10 different books from the library, and reading 20 articles on your lunch break, take a step back, and focus.
Ask Yourself What’s Important and Focus
Most people are looking for general information on how to improve their financial situation, but general, blanket advice is probably going to overwhelm you even more.
Like I said before, it’s important to know where to start. To figure this out, ask yourself a few questions:
- Why did you start looking for personal finance advice in the first place?
- Is there a specific issue you need help with?
- What’s your ultimate goal? What do you want to use your money for? What’s your why?
For example, maybe you’re looking to get out of debt. Maybe you’re looking to control your bad spending habits. Or maybe you want to figure out how to stop arguing about money with your spouse.
Then look for specific resources on getting out of debt, controlling your spending, or managing money with your significant other. Don’t get sidetracked by everything else.
Eventually, you’ll want to develop a big-picture of your finances, and all of these topics are intertwined, but when you’re first getting started, you want to eliminate any barriers standing in the way. A sharp focus in one area will help you branch out to the other areas once you feel ready.
Impose Limits
Now that you know exactly what you’re looking for, it’s still important to avoid feeling overwhelmed with overcoming whatever financial challenge you’re focusing on.
That’s why setting limits can be helpful. This might sound ridiculous to some people, but it works!
Set aside a dedicated time for research, and set a timer as well. This will stop you from going too far down that rabbit hole, and it should also motivate you to find relevant resources (instead of getting sidetracked).
For example, you might decide that the best time to research is after you’ve eaten dinner on weeknights, because researching during your lunch hour at work makes you feel anxious and unable to focus on your job, and you want to leave the weekends for fun.
You might also decide to limit your research time to an hour, otherwise you might find yourself staying up way past your bedtime.
Don’t get me wrong – it’s great to be enthusiastic about solving your money challenges, but you don’t want to burn yourself out before you’ve had a chance to get started. The key is to start small and build up from there.
Give Yourself Credit
Once you start building up and taking action, it’s also important to give yourself a pat on the back.
Why? It’s very easy to feel overwhelmed when you also feel negatively about your finances.
A lot of us internalize that negativity with thoughts like, I’m so horrible at budgeting, I don’t even know why I bother, because I never stay on track, or, I’ll never get out of this mountain of debt. I’m doomed forever.
You don’t want to start off hopeless and overwhelmed, as that can lead to giving up.
Instead, give yourself some credit! You’ve taken initiative into seeing what you can do to improve your situation, you’ve researched it, and now you’re taking action. That’s further than a lot of people get.
Replace those negative thoughts with positive ones. No one gets their budget right on the first try. Many people stumble before they start paying off their debt in a big way.
Managing your money is a constantly evolving skill. I’m always learning more about personal finance, and so is everyone else. I highly doubt anyone “has it all figured out,” so don’t get yourself down over feeling “behind” because it won’t do you any good.
Focus on the progress you’ve made and the progress you plan to make!
Hire a Financial Planner
As a last resort, if you’ve followed all of the above tips and still feel too overwhelmed to start, then I recommend hiring a financial planner, or seeing if you can get a “money mentor.”
While it’s a good idea to educate yourself first, sometimes you just need help getting started, and a financial planner can guide you. They can pinpoint what areas you should focus on, draw up a plan for you, and give you specific advice for your situation. That’s something that blogs and books can’t do for you.
Know that there’s nothing wrong with going this route. Some people either aren’t great at managing their money, or prefer not to deal with it. At the very least, your money is being managed, instead of neglected, so it’s still a win. And it never hurts to have a professional opinion even if you like managing your finances!
_____________________
There’s no reason to overwhelm yourself with information about personal finance and admit defeat before you’ve even begun. Just take it one step at a time, focus only on what you’re trying to improve, and try the things that resonate with you the most. There’s no right or wrong way to take this journey other than staying in the dark.
Have you ever felt overwhelmed about your financial situation? What steps did you take to give yourself peace of mind?
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I agree that information overload is easy to experience with so much content out there. I often have to stick with one or two resources when I want to learn about something new. Books are nice for certain topics since they can be a bit more linear than web sites.
Your comment about books is true! They’re a bit easier to follow and take action with. Sticking with one or two trusted resources after doing preliminary investigation is also a great plan.
If there’s anything I’ve learned is to just take it slow. If you don’t get what X means see if someone else can explain it better. It took me awhile to understand 401(k)s.
Some bloggers are better at explaining concepts than others. Sometimes it helps to follow one website’s advice and staying with them, instead of following several websites and feeling confused.
For a long time I only read Get Rich Slowly because they had a knack for breaking down subjects, over time I expanded to other PF blogs. =)
Definitely agree with the “less is more” approach as far as blogs go. GRS was the first PF blog I stumbled across as well! I agree that it’s important to go slow and have patience. When you get into investing territory, it can be easy to throw your hands in the air and say you don’t get it, but it doesn’t happen overnight.
Awesome list, Erin! I think number 2 is so important! Figure out your goal and purpose of the new information. It is so easy to get overwhelmed in anything but if you know the goal, it can help to narrow your focus.
Yes, focus can be more critical than we think when we’re venturing into new subjects. There are so many facets of personal finance which makes it overwhelming, but chances are, you can start small and still see big results.
You’re spot on, Erin! Great advice. It is so easy to get overwhelmed by all the personal finance advice out there. When we were just starting to get our finances and debt in order, we tried to focus on just one thing at a time. Cutting expenses was first, so I read a couple of books and worked on implementing the strategies I had learned so we could save some money before moving on to paying down the debt, making a will, getting life insurance, investing etc.
Thanks Amanda! It sounds like you followed a great strategy. While it’s sometimes true that doing things in a certain order can maximize the benefit, the hassle and overwhelm override that. Things tend to fall into place when we let them.
Solid list Erin! I remember when I first started paying off debt the overwhelming feeling just made me feel like I couldn’t start and wouldn’t find success. I had to slow things down, determine what the problem was and what my true goal was. Once that was done it became simpler to manage and gave me the motivation needed to start attacking things.
That’s an important point, John – even the sub-“categories” of personal finance can be overwhelming on their own, let alone the general idea of managing your money better. Learning how to avoid overwhelm can help you implement other ideas in the future!
I’m all about tackling one step at a time and recognizing each small win to keep that forward momentum going!
It’s so true about information overload.. I used to have a problem of not knowing where to find the information but now that I know where to find the information, I have the problem of not knowing which resources will provide the most value for the problem I want to solve.
Can’t go wrong with reading a few personal finance blogs (like this one) regularly though in helping with finances :)
Oh yes in 2012 in my frist budgeting experience I was overwhelmed about finaces and my little debt to repay, with years I still am ina hate-love relation with budget and finances but I’m proud baout what I achieved… luckily there are a lot of apps that can help you in this field!!!