8 Helpful Strategies To Reduce Financial Stress

stressed about money including student debt, payments, housing market, economic turmoil

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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

A great method for reducing financial worry is to create a budget or review 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.

Not making enough money could indicate that you may want to consider looking for employment that pays better, picking up a side hustle, or considering a plan to build passive income streams.

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?

11 thoughts on “8 Helpful Strategies To Reduce Financial Stress”

  1. This is a really helpful post! Thank you. I find that I’m always worrying about money -student debt, bills, it goes on. I did have an emergency fund saved up that luckily just recently came in handy for that exact situation, so I can’t agree enough that everyone should put a bit of money away for emergencies. I do need to be better at making a monthly budget though and I want to make an appointment with a Financial Advisor as you mentioned. Thank you!

  2. I love reading your points about financial managements and money in general, they’re always so helpful. I’m so guilty of going off my budget and just poor spending decisions. I love how you brought up creating more streams of income and getting financial advice and education, very important points. Thanks for sharing.

  3. Thank you for these tips. Money isn’t an issue with us right now, but is has been in the past and it could be tomorrow. You never know!

  4. Great post covering all the key points and bases when it comes to being objective, rather than stressing and being emotional about finances. The more you know, the less you will stress and the more you can take positive action to address your own situation. Hence financial education is crucial as is having some budgeting to compare your financial plan with what you are actually achieving. Some good food for thought in this post.

  5. Mayuri

    These points are so insightful and would definitely help in gaining financial freedom and peace of mind. I believe in generating multiple income streams to make finances less stressful.

  6. Great tips and impactful, I think many people may find your list useful, and my rule of thumb is always balance your income and expenditure.

  7. This is such an eye-opener for me. I’m always stressing about money and especially now that I gonna be paying for a house already. I can’t imagine how I’m gonna manage my expenses anymore and i wish that my blogging actually earned me something. I guess, i need to budget and try that spending freeze! Hahaha

  8. One school of thought says that financial stresses come from a scarcity mindset, that we should be working towards an abundance mindset.

  9. great post! I do think we put money business too high as well

  10. Great article. I used to stress about money A LOT! I would working on our budget daily. It became very overwhelming.

  11. Great tips on how to stop stressing about money! No doubt that comparison is the thief of joy, so I loved your point about not comparing your self to others. I also think that with a little research and developing a strong plan that you openly communicate with your partner, much of the stress can be eliminated!

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