Stress over money is legitimate. An NBC survey indicates that more than 75% of Americans worry about money and experience stress due to it (1). So how do we overcome our financial stress? How can we safeguard both our financial and mental well-being? Here are a few easy steps you can take to start improving your finances right now and overcome financial stress.
1. Make a Budget.
This one was the first and inevitable suggestion, you knew. You do indeed require a budget. No, it doesn’t need to be difficult. Let’s keep things easy here.
Begin with your understanding: Note the amount that is currently in your checking account.
Take what you know away: Take the balance in your bank account today and subtract all the bills that are due between now and your next paycheck.
Take away your necessities: Subtract the necessities you will need between now and your next paycheck after deducting the bills you know you will have. Therefore, deduct your savings, debt repayment, expected grocery spending, and transportation expenses.
Take away all your extras: Next, have a peek at your social calendar. What events are scheduled between now and payday that you need to attend to? Time for a haircut? Lunch with friends? Take away your projected expenses.
Cycle and repeat: When you get paid again, go through the same process. Add your pay to your new current checking account amount and repeat the process.
Make sure to make changes as you spend money. Keep track of how much you spend at the grocery shop. This will assist you in keeping an accurate running total.
That’s all there is to it! Simple as that. Okay, I get that making a budget is simple, but sticking to it is challenging. And that’s fine. The trick is to persevere and not give up!
2. It’s time for you to give up chasing after unattainable goals.
Alright, giving up on pursuing other people’s aspirations is the very last resort for relieving financial stress. I understand that you may not realize you’re doing it, but the truth is that everyone occasionally falls into this trap. We want to join the action when we witness others accomplishing incredible feats. And that is not inherently flawed.
The issue arises when we begin pursuing endeavors that aren’t truly intended for us. Are you setting your goals in the same way as anyone you follow online when you sit down to make them? Given your current stage of life, are your ambitions realistic? Furthermore, are you even interested in realizing that dream?
These pieces of the puzzle are crucial. We won’t be able to overcome financial hardship until we realize our dreams. Thus, this week, set aside some time to dream. Consider those dreams and examine yourself. Make sure you’re not unintentionally going after a path that won’t ultimately benefit you.
3. Keep a 30-day spending log.
If you haven’t been keeping track of your expenses or adhering to a budget, you must do this. You should monitor your expenditures over the next 30 days if you want your financial stress to subside. In the digital age we live in, we are quite disengaged from our finances. It’s not like the days of physical, tangible money spending, when we make most of our payments with checks or cash. These days, we just press a button, and two days later, our buy mysteriously shows up at our door. Our lack of connection to our finances is causing us to worry.
We must reestablish our financial connection to address that. And keeping a 30-day spending log is a great approach to achieve just that. Make a note on your phone to update your expenditure tracker once a week. You must do this; you can use a spreadsheet or a notepad. Don’t trust software to inform you. For the next four weeks, make sure you update your spending tracker from the preceding week.
This step is to reestablish our connection to money. Regaining control over our finances is the first step towards preventing money’s dominance over us.
4. Discard debt.
Debt pulls you down like a shackle. It even causes you to fall behind more and prevents you from moving forward. It’s now time to bid debt farewell. Work your way up to the highest balanced debt by starting with your smallest balanced loan. Until the first loan on your list is paid off, devote every additional penny—and I do mean every extra penny—to it. The following loan on your list should then “snowball” into the minimum payment you were making and carry on until all debts have been paid off.
Back in 2010 on my starting out salary, I wiped off just over $36,000 in consumer debts in just over three years. I can attest to the difficulty of paying off debt, but I also know that it is very doable.
5. Invest as if your life depended on it.
The truth is, when you live without a safety net, you are inviting disaster. And what safeguards you? This is your Emergency Fund. Your emergency fund is that lovely savings account you have set aside for those times when life suddenly springs up and hits you square in the face.
Today is the perfect day to start saving money in an emergency fund if you don’t currently have enough for at least one month’s worth of living costs! Sincerely. One of the most crucial accounts you can have been this one. Nobody is going to access your bank account and increase your emergency savings on your behalf. It must be done by you alone. So, start saving as if your life depended on it—and it does!
To Wrap Things Up
The weight of financial stress is a heavy burden borne by many, causing both mental and emotional turmoil. However, there is hope. By taking a series of simple yet effective steps, you can alleviate this stress, regain financial control, and safeguard your overall well-being.
These strategies offer a path to financial security and mental peace, helping you overcome the challenges that money-related worries can bring. It’s time to take charge of your finances and find serenity in your financial journey.
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