Are you tired and stressed out trying to manage your finances?
Today’s economy definitely brings in the financial stress everybody would want to keep at bay. But there are instances that we just can’t avoid the stress our finances and financial status brings us. Not only does it disrupts our day to day lifestyle choices but our general outlook in life as well. If you’re planning to take control of your finances, manage your money and get rid of financial stress, then you’re in the right place.
Here are some tips to avoid financial stress and get that financial freedom that you deserve.
Identify what causes your financial stress
Financial anxiety is real and can be paralyzing. But it does not have to weigh you down and keep you from overcoming it. Identify and list what causes your financial stress. These could be high utility bills, expensive rent, credit card debt or student loans you need to pay off. Listing your money challenges allows you to see what you need to work on to keep that financial anxiety away.
- List your money challenges and keep it short
- Write the top 3 problems you need to tackle first
- Revisit the list at the end of each year to see how you have progressed in tackling the money challenges
Create a monthly budget
There is power in knowing where your money is spent. Creating a monthly budget is a helpful financial tool that people overlooks. Having a budget to work with every month allows you to set how much money you can spend on certain expenses. It also allows you to leverage on how much you money you can set aside to pay debt or to save money,
- Start by knowing you net income and work with it
- List all the monthly expenses you have: rent/mortgage, utility bills, groceries & gas expense, credit card budget, etc.
- Use a budgeting system that works for you. It could an envelope system, or plainly listing each expense as you go, etc.
- Use mobile apps and tools to track your expenses and keep on your budget.
- Set up an automation debit for payments or even forced savings.
- Read articles about monthly budgets to help you set up yours
Manage your income wisely
It can be difficult to see solutions when money is too tight to work with. But it all starts at managing and using your income wisely. You can identify the ares of your spending that you can lower or prioritize those you deem important.
- Make a WANTS and NEEDS list. This will help you separate the expenses that you need versus those that you can do without.
- Trim your WANTS list first. These are the expenses you can do without but prefer spending for it.
- Identify way to save by looking into your spending pattern. It could be lessening taking coffee take-aways each week or carpooling with officemates to save on gas expense.
Build an emergency fund
One of the causes of financial anxiety is not knowing where to get the money for unforeseen expenses like job loss, illness, etc. Having an emergency fund covers that and gives you the financial security of having the funds to cover you should your finances go south. Emergency Fund is savings intended for emergency expenses. It should cover three to six months of your monthly expenses. It can seem like an overwhelming money to raise but is doable.
- Set aside an fix amount intended to go to your Emergency Fund on your monthly budget
- Put your Emergency Fund first before setting up any long-term savings plan.
Reduce your debt
A common source of financial stress are debt. It can be from a student loan, a car loan or even your credit card debt. It can cause anxiety to having to deal and think of how to pay off the large amount of accumulated debt. The only way to solve this to plan and have it paid off. Create a debt management plan and take the lead in paying off one debt at a time.
- Pick a payment strategy and stick with it.
- Click here to learn about debt management plan
- Set aside an amount to pay off your debt on your monthly budget
These tips, when done right, can help ease your money worries and finance anxiety. Always be on top of your money problems. Managing and dealing with you financial stresses is the first step to having good money habits.