Identify negative and positive financial cycles

Once you can identify some aspects of negative and positive financial cycles you can work for positive change.

06:55 25 January 2014

There is a lot of pressure on people today to manage their finances, but they often do not have the proper resources to do this successfully. There is a lot to know about finances and stressing out over mismanaging funds can lead to lack of sleep, poor work performance, and relationship difficulties. This can create a negative downward spiral from which it is exceptionally difficult to escape. It is important to set yourself up on a positive financial cycle instead of a negative one.

Here are the aspects of both positive and negative cycles.

Negative financial cycles:

• Expenses are greater than the regular monthly income.
• Excessive stress levels create potential health issues.
• Health issues contribute to poor work performance and lack of sleep.
• Individuals are concerned with being dismissed from their employment, or reprimanded.
• Worry can make it difficult for certain people to sleep properly which reduces their ability to cope with the worry and can also affect work performance.
• Stress can also lead to overspending for some people, which perpetuates the cycle.

Positive financial cycles:

• Income is greater than monthly expenses.
• The normal budget includes amounts for savings.
• There are investments in a savings account or retirement account of some type.
• Income can either be increased, or expenses decreased to accommodate any financial changes.
• Less financial stress means improved relationships and better sleep.
• Reduced worry allows improved work production and better work-related focus.

No matter what financial spectrum you are in currently, you have the ability to move to a more positive financial cycle. It may take a few drastic changes depending on your budget and financial plan. There are multiple ways to decrease expenses, increase income, or even a combination of the two.  With a little perseverance and determination you can change a downward spiral into something much less stressful.