5 Tips to Reduce Money Stress
According to CareerBuilder.com 78% of Americans are living paycheck to paycheck. Living that way can bring about unwanted stress in your life resulting in you being a bad boss or employee, a frustrated husband or wife, among many other things. It doesn’t have to be like this. There is a better way! Here’s a few ideas to help you get going.
Talk about it.
Talking about money stress isn’t something that comes naturally. However, not talking about it can create more stress which only makes the stress worse. Honestly addressing the issue can lead to a breakthrough where fear is removed and placed with hope and freedom.
PRO TIP - If you’re married find a good time to have the conversation with your spouse. If you are single find a trusted friend you can chat with.
Start an emergency fund.
Murphy’s law states that; “anything that CAN go wrong, WILL go wrong.” An emergency fund protects you against Murphy. But Murphy protection doesn’t happen without a plan. When emergencies come we need a plan so we can reach our goals without going off course.
PRO TIP - If you are single get $500 into a savings account as fast as you can. For married couples you’ll want to get $1,000. Don’t go crazy trying to find a saving account with a great interest rate just use a simple one that your bank already provides.
Do a monthly cash flow plan.
While budgeting has had a negative connotation leading some to avoid it altogether, it doesn’t have to be that way. Right now your job is probably harder and more stressful that doing a monthly budget. A cash flow plan is simply an estimate of income and expenses for a set period of time with categories. If you can do 6th grade math, you can do a budget!
PRO TIP - A great tool for budgeting is www.everydollar.com. It’s FREE and super easy to use!
Pay off all debts.
Having ZERO debt is the greatest way to having less financial stress. Pay off your debts smallest to largest but creating the debt snow ball effect. It’s simple; make minimum payments on all your debts and when one debt is paid off take that minimum payment and add it to the next one in line and repeat until finished. By the time you reach the last debt you will be putting a large amount towards it each month!
PRO TIP - If you have a large sum of money in savings then bring it down to the emergency fund sum and use the remained to pay off debt. Sounds crazy but it works!
5. Live with in your means.
Trim your lifestyle back and keep it within your cash flow plans. Dave Ramsey challenges Americans to “Act Their Wage.” If you are having financial stress AND you are trying to keep up with the Jones’ you’ll actually have more stress. Learn the power of saying the word “NO” and you’ll discover that it’s easier and way more stress free!
PRO TIP - Do an honest assessment of your NEEDS vs. WANTS. A need is characterized by something you CAN’T live without, i.e. shelter, food, clothing, etc. A want is characterized by something that you CAN live without but desire.