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Financial concern is common for many of us. This can be from being in debt, not having enough money, having issues with spending, and similar.
Whatever it is that causes you to feel stress about money, it’s comforting to know that you can take steps to help you reduce any overwhelm that you have.
In this article, I’ll go over several steps you can take to help you feel more at ease with your money situation so that your day-to-day life is easier to navigate.
- 1. Review Your Budget
- Cut Expenses and Skyrocket Your Savings
- 2. Boost Your Emergency Fund
- 3. Don’t Compare Yourself to Others
- 4. Read Up On Personal Finance
- 5. Take Time to Figure Out What You Can Change
- 6. Increase Your Earnings
- Earn an Extra $50-$100 per Month
- 7. Set Goals For the Future
- 8. Speak to a Financial Advisor
- Wrapping It Up
1. Review Your Budget
A great method for reducing financial worry is to stay on top of your finances by creating a budget or reviewing your existing one. With a budget, you can determine where your money is coming from and where your money is going. You can track your spending and find places where you can cut back or reallocate your money.
One example of how a budget can help you is that it can allow you to stop spending money in one area of your life and apply that money to somewhere else, such as paying off a high interest credit card.
Sticking to a budget is not always easy initially, but as you become better at it, you’ll find that some of your financial stress may wane.
It’s up to you how often to review your budget. Some may review it annually, others quarterly, and some monthly. Find a frequency that works best for you, and that helps you best reduce your financial worry.
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2. Boost Your Emergency Fund
An emergency fund is a bank account, usually a savings account, that you store money for when an unexpected event occurs. An emergency fund comes in handy when you lose your income for a period of time when you have an unexpected expense such as a broken-down car or in an emergency when you need money fast.
Most financial experts agree that having $1,000 in an emergency fund at minimum is a great place to start. After you’ve saved $1,000, it makes sense to work up to having between three and six months of living expenses saved up. By having an emergency fund that covers several months’ expenses, you can better handle a major expense or an extended duration where you lose your income.
CIT Bank has a savings builder account which is a great place to start an emergency fund. Interest rates are over ten times an average brick and mortar bank, and accessing your money is straightforward for when it’s needed.
3. Don’t Compare Yourself to Others
It’s tempting to compare your financial situation to others. You may get caught up with how well you believe friends or colleagues are doing.
One example is reading social media too much. Based on others’ social media posts, you may assume that everyone is doing well, buying new things, and just generally enjoying their lives carefree.
Social media shows us people’s lives through a very narrow lens, and reality is quite different.
It’s important to focus on yourself and your own finances. Teach yourself not to worry about what others are doing because their situation may not be as pretty as they might try to make you think.
When you free yourself from comparing yourself to others, your stress about money may reduce quite a bit.
4. Read Up On Personal Finance
Learning more about how to best manage your money can help take some of the stress out of your everyday financial life. When you feel more confident and educated about money, you’ll make better financial choices, such as working hard to getting out of credit card debt or regularly investing for your future.
You can learn about personal finance from books and personal finance blogs and websites. Check out Clean Cut Finance’s book recommendations to jumpstart your personal finance education.
As you educate yourself more on saving better, spending less, and how various concepts around money works, your financial worry may decrease as your understanding increases.
5. Take Time to Figure Out What You Can Change
If your financial stress stems from money issues, sit down and look over everything. Your issue may be that you spend too much money or perhaps you don’t earn enough. It might also be a combination of both of these things.
Spending too much may come from things such as buying on impulse or having living expenses that are high that may have opportunities to reduce.
6. Increase Your Earnings
You may determine that you need to earn more money. When you have more money, it’ll be easier to pay bills, navigate debt, and save more.
Here are some ideas to increase your earnings
- Pick up a side hustle
- Impress your boss and ask for a raise
- Start a passive income stream
- Find ways to make money online
- Apply to a similar job that pays better
With more income, you may feel less concerned about your financial situation.
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7. Set Goals For the Future
Big future plans can cause stress if your financial situation is uncertain. You may want to buy a house or put your kids through college. You may worry that you won’t retire on time.
These are normal things to worry about, and when you set goals for yourself, you can better determine how you’ll get to your future plans successfully.
For example, if you’re looking to buy a house and need $20,000 for a downpayment, you might set a goal to save $500 a month for 40 months – just over three years. When you break down your plans into incremental goals, you’ll have a clearer picture as to how to get from where you are to where you want to go. This can help relieve financial stress.
8. Speak to a Financial Advisor
A financial advisor, such as a certified financial planner, can help you reach your financial goals, which in turn can help you lighten your financial concerns.
A financial advisor will work with you in coming up with financial goals and realistic ways to reach them. Whether you’re trying to pay off debt like student loans or credit card debt, your advisor will help you with the financial planning that you may not feel confident in doing yourself.
With goals in place and an avenue to accomplish them, you’ll have greater success in reducing financial stress.
Wrapping It Up
In this article, we discussed various ways to take some of the overwhelm out of your finances. While it’s normal to stress about money sometimes, finding ways to reduce this stress is helpful to navigate everyday life.
What are you doing to ease your money worries?