Feelings of financial stress often stem from common issues such as carrying too much debt, not earning enough money, the expense of raising kids, marriage to a spouse that has different ideas about how to manage finances, and the list can go on.
There is a virtually endless list of reasons you may be feeling some financial stress. It can take its toll on your closest relationships, and when you are stressed it can start affecting other aspects of your life.
If you can reduce your financial worry, it will free your mind so that you can focus on other important areas of your life and relax, knowing you have a plan to handle your financial situation. Following are a few things you can do now to relieve your financial stress and make it easier to function each day.
Create a Budget
You may feel overwhelmed and think that a budget is only going to add to your financial stress, but it is the best tool you have to get control of your finances and stop worrying about money. A budget allows you to decide when and how you are going to spend your hard-earned dollars. This spending plan makes sure you cover your immediate expenses, while still working towards your retirement and savings goals. It can also help you find extra money to put towards debt.
The first few months of planning and sticking to a budget are the most challenging, but once you understand what to do you can often reduce the amount of time you spend on it, and in turn, reduce the amount of time you spend worrying about money. Your budget will give you the feeling of control that you need to have over your finances. Start with just one months’ worth of expenses and then go from there, tracking spending and cutting back in different areas each month until you find the perfect balance.
Get an Emergency Fund
An emergency fund is an amount of money you have set aside to cover unexpected expenses and financial emergencies. Although a car repair can be expensive and stressful, if you know you can tap into your emergency fund to cover it, a lot of the stress will go away. It is also easier to use the money in your budget the way you planned if you know you have the extra money in the bank ready to cover the unexpected emergencies that may crop up. You should have at least $1,000 in the bank until you are out of debt and after that, work up to an amount that covers about six months’ worth of your expenses.
Building an emergency fund may seem tough at first, especially if you are struggling to make ends meet each month. Start by putting a small amount, whether it’s $10 or $100, in the bank from each paycheck, and any leftover money you have in your other spending categories at the end of the month so that you can build up your emergency fund. You may also consider selling any unused items around the house to build up that cash as quickly as you can. You may be surprised at how quickly the stress fades away when you know you have that money in the bank to protect you and your family.
Get Outside Help
If you are really struggling with getting a handle on your budget and spending issues, do not be afraid to get outside help. You can take classes on basic money management and investing, that will help you plan out a budget and do the things you need to succeed financially. A financial planner can help you create a long-term saving and investing strategy that will help you take care of your current needs and plan for retirement. It is important to realize that you do not have to face the problems alone. If you are feeling overwhelmed by debt you can work with a credit counseling service to help you restructure your debt and in some cases, negotiate with creditors. You can also take financial classes that coach you through budgeting and other aspects of your personal finances.
Often, just talking to someone outside of the situation can help. Talking through your financial challenges and seeing an outside perspective can help you. Also, it can help to be accountable to someone about your progress. Just knowing that you have to report to someone else on your spending or your savings progress may be all you need to curb your impulse shopping habit or any other issues. A friend can help with this but a support group or class can also help, and sometimes be even more effective because a support group won’t let you off the hook.
Determine What You Can Change
If you are having financial issues, you may have an income issue, a spending issue, or a combination of the two. If you know that you do not make enough money to keep up with your current bills, decide what you can do to change the situation. It may include options such as going back to school to qualify for a higher paying job. If you feel you have a spending problem and it’s an addiction, you may want to attend a group like Shopaholics Anonymous to get help dealing with the issues you are facing. Once you have a plan that will help you change your situation permanently, you should be able to reduce your stress. One way that you can prioritize the things to cut back on is to determine the hourly cost of your wants. This may make choosing which items to cut much easier. Mastering these twenty financial skills can help reduce your financial stress too.
Change is not always easy. Start with small steps and work up to bigger changes. Additionally, if you make a mistake one week, go easy on yourself, and get right back on track so you can continue to stick to your budget and keep working on making those changes in your financial habits. It helps to realize that it’s a journey and even if you take a short detour or a small break, you can keep moving forward and make the necessary changes.
Find Positive Aspects of Your Life Each Day
While this may sound like it’s not a solution to your financial problem, it can make a big difference in the amount of stress you feel each day. Find positive aspects of your financial situation by tracking your progress towards your financial goals. Looking at the positive aspects of your life each day can also help you reduce your stress.
If possible, try to find some healthy outlets that do not cost a lot of money. Regular exercise and taking care of yourself can reduce your overall feelings of stress, which allows you to better focus on the problems and make headway. You can change your financial situation, and you will find it easier to accomplish if you are not worried and living in an anxious state all of the time.