We’ve all heard the adage that money doesn’t buy happiness, but it definitely can add to a burden of worry and anxiety. Thankfully, you don’t have to be wealthy to cast financial care from your shoulders. A few tried-and-true guidelines can help you control your money rather than your money controlling you. Here are some ways to reduce your financial stress and stop worrying about money.
Take A Breath
People are often very hard on themselves when trying to get on top of their financial concerns. While everyone’s financial situation is unique, know that you are not alone in your worries. Even if you’re sitting at the bottom of a hole that you dug yourself, there is always a way out. Take a moment to breathe and gain some perspective. With a calm frame of mind, try to pinpoint exactly how you’ve gotten into an unfavorable financial situation. Is it a string of medical bills? Are home appliances causing issues? Do you have spending issues that you need to get under control? It takes humility to admit a problem. Take a breath and gain that humility.
Make A Budget
It’s the most fundamental of money advice and can seem cliche, but it’s fundamental for a reason. You need to know exactly how much income you have each month and exactly where it’s being spent. Look up your revenue and expenses for the past three months, sorting your expenses into categories. You may find that you spend more money on food than you realize. Perhaps the various monthly subscriptions have added up to a higher total than anticipated. Maybe you didn’t see exactly how much of your income was going straight to mortgage and credit card payments until now. Whatever the situation, information is key to making a budget you can actually stick to.
Set Financial Goals
If you don’t have a goal, you’re always going to be treading water financially. Set a financial goal to help motivate you to stick to your budget. Remember that all goals should be SMART (Smart, Measurable, Attainable, Realistic, Time-based). Vague goals or goals without a timeline won’t get you anywhere. Some smart financial goals are to pay off your student loan balance in five years or to save up a specific amount by the end of the year to buy a new vehicle. Specific financial goals will help you keep moving forward.
Find A Better Job
It may be that no matter how much you restrict your expenses, you simply can’t get your budget out of the red. Or perhaps saving is your goal, and you don’t have enough left over each month to save how you’d like. If you can’t reduce expenses, then you have to increase your income. Check out the average compensation for your current job, and ask for a raise if necessary. If you need additional schooling, ask your employer – some companies will reimburse you for classes or training. Alternatively, consider a side gig. Even just an evening or two of delivering meals or groceries can give you enough cushion to relieve your money woes.
Build An Emergency Fund
By far, the biggest financial worry is not having enough money in savings. Make building an emergency fund one of your first financial goals. Most experts advise having a savings fund with at least three months of expenses. This can seem insurmountable, but you don’t need to get there in a week. Consider setting up your paychecks to deposit a certain amount into a separate savings account automatically. Little by little, you’ll get there.
Pay Off Debt
It can be frustrating to try to reduce your expenses and see that much of your income is getting eaten up by debt. Sure, there’s a difference between good debt and bad debt, but no debt is good if it is stealing your peace. Depending on the amount and type of debt you have, you can:
- Automate payments from your bank account to avoid late fees
- Pay more than just the minimum amount each month to reduce interest or principal
- Pay off debts with high-interest rates first
- Pay off credit cards first
A wise piece of advice is to pay each debt monthly. When the smallest debt is paid off, don’t decrease the amount you spend each month on debt – instead, add that savings to the next smallest debt. The accumulated success will help you keep chipping at the bigger ones as each debt gets paid off.
Start Investing
At some point, you’re going to want to retire. Not having a retirement plan can be a big source of anxiety and can lead to feelings of hopelessness. There are many different ways to save for retirement. Talk to a financial advisor to help determine the path that is best for your financial situation and retirement goals. This can be as small as putting money into a savings account that earns compound interest to opening a full-on 401K. Just getting this ball rolling can relieve a significant burden of stress.
Focus On What You Can Control
There is often a lot of moving pieces when it comes to money. If you’re trying to improve your financial situation, it can feel frustrating to face all of the things that are simply out of your control. Worry won’t suddenly make those things controllable, however. Instead, focus on what you can control and what you know for certain. You can control your discretionary spending. You know how much money is coming from your job and side hustles. You know when utility and debt payments are due. Focus on what is inside of your control, and it will help with feelings of overwhelm.