Stress-related to finances is one of the biggest things people grapple with every day. It can lead to chronic conditions like insomnia and depression or even break families apart! But you don’t have to fall into the same traps if you can make a plan to tackle your financial woes and actually back it up with action. This way, you can start working towards your goals without stressing about money.
To help you do that, we’ve rounded up some advice from financial experts to present you with 10 tips to help relieve financial stress.
Start Following a Budget
The main reason why people get stressed out about money is that they don’t know how they’re spending it. The best way to get around this is to start following a budget. This way, you’ll know exactly how much income you get every month and how much you spend every month. If there is an imbalance between the two, a budget will help you rectify this as well. By managing your money efficiently, you can significantly reduce your financial stress.
There are a number of different budgeting methods including the envelope method, the 20/30/50 method, the zero-based budgeting method, and more – so you can pick whichever would suit you best.
Pull Back on Unnecessary Expenses
Spending a few dollars here and there doesn’t seem like much, but it can all add up over the course of a month. $3 for Netflix doesn’t seem like too much, but when you add up all your OTT subscriptions, you may realize you’re spending way more than you need to.
Try to scale down on purchases that aren’t necessary. You need to live a joyless life, but may you can cut down your OTT subscriptions from 6 to 3 and reduce the number of times you eat out from 5 to 2. Doing this will help you get better at managing money and help you achieve your financial goals that much quicker.
Set Aside a “Fun Fund”
A realistic budget should always have a section for expenses related to fun and entertainment. After all, what kind of life would it be if you didn’t allow yourself to have fun? A stressful one, I can tell you that much!
Plus, this allows you to spend money on things that aren’t essentially necessities without feeling guilty about going outside the budget, which could have caused more financial stress.
Switch from Credit Cards to Debit Cards
Credit cards are one of the worst types of consumer debt you can get into. Not only do they have incredibly high-interest rates, but they also have a very short repayment period. Credit card debt is silent but deadly. It builds up quickly, especially if you’re only making minimum payments, and before you know it, it becomes all-consuming.
If you don’t like carrying cash, debit cards are a much safer alternative. They come with all the convenience of a credit card but none of the extra charges. Since you’re only spending the money, you actually have, you are much less likely to get into debt. Plus, managing a single account will help you keep better track of your finances, giving you peace of mind.
Get Some Professional Advice
When you’re stressed and your mental health is taking a hit, you might talk to a mental health professional. At the same time, you could also consider getting help from a different kind of professional – a financial advisor.
A financial coach will help you navigate the very complicated landscape of financial decision-making, be it budgeting, investing, or planning for retirement. This will help take the stress off of your shoulders, knowing that your decisions have a solid backing of financial know-how.
No one who has debt can be completely stress-free. You’ve always got that nagging in the back of your mind that your hard-earned money is going towards making off debt payments. Plus, you may be worried about being unable to make payments if you lose your job.
The first step to financial freedom and getting rid of financial stress is to become debt-free. Having a budget will help you cut down expenses and allocate any extra money you have to make debt payments. And before you know it, you’ll be debt-free and stress-free!
Talk Money with Your Partner
Did you know that money is one of the most common causes of problems between spouses and one of the major reasons for divorce? This is why it’s important to have regular conversations about finances between partners.
This way, you’ll both be working towards the same goal and there is no ambiguity in what either of you wants. Conversations around money aren’t easy to have, but they’re essential if you want to build a healthy family life free of financial stress.
Set Smaller Financial Goals
A lot of financial goals can seem impossible when you look at them in their entirety. But you’ll never achieve anything that way. But if you break them down into small, achievable goals, you’ll climb up that ladder in no time. After all, no one becomes the CEO of a company on the first day of their job.
Retirement is one of the major financial goals one set in their life. According to several financial experts, the average American needs $1-2 million to live comfortably in retirement. Most people’s jaws drop when they hear this, but they’ll find it a lot easier to comprehend when it’s broken down. For instance, if a 35-year-old just began saving for retirement by setting aside $1,000 per month (with an 8% annual interest), they’ll be a millionaire by the time they become 61!
Connect with the Debt-Free Community
It’s always easier to do things when you have a community of like-minded people around you. Knowing you’re not alone, and that you have someone to turn to during times of uncertainty can be a great source of comfort.
You can find loads of different communities online where people share financial goals, advice, and more. Or you can look for a personal finance class, either online or in your local community. Financial Peace University created by financial guru Dave Ramsey is a great free class that can help you gain a lot of useful knowledge about financial management.
Downsize Your Accommodation
Housing-related expenses are typically what take up the largest portion of a person’s budget, so downsizing may be a serious option to consider if you need to cut down on expenses.
Renters can easily move to a cheaper house or apartment, but it’s a little more complicated for homeowners. However, just because you own a home doesn’t mean you have to keep it – homeowning comes with a number of different expenses that can be much more expensive than renting. So, if your current situation can’t handle those expenses, it may make more sense to sell and rent to reduce financial stress. You can always revisit homeowning once your financial situation is more stable.