As 2024 comes to a close, it’s easy to start feeling financial anxiety about what’s to come in 2025.
A study by Capital One found that 73% of those surveyed said their finances significantly contributed to increased stress levels.
Getting your money under control before New Year’s can help you start the year off right with less stress and more financial freedom.
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Suze Orman, financial expert and host of the Women & Money podcast, was a guest on the Soberness Podcast, where she spoke about financial sobriety.
To Orman, financial sobriety is breaking away from the constant chaos of not having your finances under control and being constantly affected by the fear and insecurities that come with it.
Individuals in need of financial sobriety are those who are buried in debt, struggle to pay their bills and feel like others are judging them because of what they have in the bank.
If you fit into this category, here are three of Orman’s suggestions for regaining control of your money.
Stop Worrying About Others
One dangerous issue that Orman has noticed is people spending more when they feel financially insignificant. She said, “When you don’t have self-worth, it kind of ends up that you don’t have net worth.”
In this sense, when you feel low, you might try harder to impress people by taking them to dinner or buying expensive items in hopes that they’ll reshape their opinion.
Buying new clothes with a credit card, taking out a hefty car loan that you can’t afford or paying for a Caribbean vacation so you can fill up your social media channel with pictures are all ways to artificially solve low self-worth.
It’s essential to develop a mindset where your financial health is more important than how others view you.
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Get Rid of the Plastic
One way to lose control of your finances is to put everything on your credit card without a strategy for paying it off.
According to Experian, the average credit card balance for Americans in late 2023 was $6,501. While there are benefits to having a credit card, Orman said you may want to consider getting rid of it.
Unlike other addictive behaviors, Orman said that spending is the only one you can engage in when you don’t have anything to spend.
Other activities like drinking or smoking would be impossible if you didn’t have anything to drink or smoke. However, credit cards allow you to continue your bad financial habits even after you’ve spent everything you have.
Getting rid of your credit card and using only cash can help you better understand how much you’re spending. After you spend the cash you have, you won’t be able to continue to spend. This helps teach you financial responsibility and planning.
Be Generous
It might sound counterintuitive, but it’s important to give money to others, even when you feel like you don’t have much to spare. Orman said: “The number one law of money is power attracts money. Powerlessness repels it.”
Those who go through life holding onto their money and being afraid of losing it feel weak. In contrast, those who feel like they have something to give, no matter how little, feel powerful.
To Orman, the amount isn’t as important as the act. Those with less money will have less to give, but they can still make a difference to others and themselves. This point is backed up by research.
A study gave two groups of participants money to either spend on themselves or spend on others. The research found that the group spending money on others reported stronger increases in happiness.
Refusing to give to others also reinforces the idea that you’ll always be broke and won’t have extra money. Being generous and helping someone in a worse financial place than you puts Orman’s number one law of money into effect.
You will feel more powerful and others will sense that, opening more doors to new opportunities.
Apart from improving your self-worth through giving, there are a few other important advantages.
You can deduct money that you donate to charity from your taxable income as long as the charities are IRS-approved. Donating also encourages better financial planning and discipline, which will improve other areas of your finances as well.
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This article originally appeared on GOBankingRates.com: Suze Orman: 3 Ways To Regain Control of Your Finances in 2025
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