You have been over-thinking about paying your bills for weeks, you cannot get a sound sleep at night, your heart races anytime you remember your debts. These are classic symptoms of something called financial stress. But not to worry, you’re not alone in this!
A survey by CareerBuilder found that 78% of U.S. workers live from paycheck to paycheck. You probably feel it strongly after you spend through your salary within the first few weeks, earnestly hoping for the month to end so you can receive your next paycheck. Little Wonder, the American Psychology Association found that 60% of Americans feel stressed about money.
What is Financial Stress?
Financial stress is a condition that is the result of financial events that create worry, anxiety, or a sense of scarcity and is accompanied by a psychological response. If you’ve experienced financial stress before, you surely know and detest that feeling.
Financial stress may result in many other problems including:
- Insomnia
- Weight loss or gain
- Depression
- Relationship difficulties: Do you know that ‘money’ is the number one cause of argument among couples?
- Social withdrawals
- Physical ailments like headaches, diabetes, high blood pressure, heart disease, and more.
How To Eliminate Financial Stress
It’s high time you left that life of financial stress. Take control of your money and health! Here are some of the tips to help you set your finances right on track:
Investigate the Problem
If you find yourself struggling with money, then you have to figure out where things went wrong. Are you making too little? Is catering for three children almost impossible as a single parent? Do you spend money extravagantly?
Without getting to the root of the problem, it’s impossible to create a good plan of attack. The goal here is to pinpoint the issues and get motivated to make changes.
Analyze Your Finances
If there’s one thing we can all agree on, it’s how easy it is to spend money. The little $20 or $30 that you spend here and there gradually accumulates to a substantial amount. That’s why you have to sit down and pinpoint what it is you’re spending your money on.
Furthermore, calculate your total debt, monthly income, recurring expenses, and so on. Having the numbers right in front of you will help you identify areas that need hardcore changes.
Cut Out Unnecessary Expenses
Now that you know what you’re spending on, eliminate all irrelevant expenses; maybe you have subscriptions to services you never use or you spend too much eating at fancy restaurants.
While this will not radically transform your finances, it’ll surely free up some extra dollar you can spend on necessities.
Create a Budget and Stick to It
No one likes budgeting because it’s a constant reminder of the things we cannot afford. But the truth in life is there will always be things we can’t afford, so why seek instant gratification only to suffer down the line?
Make a list of your income and expenses. If your expenses exceed your income, look for ways you can cut back on spending. Assign every dollar you have for a purpose and reserve some for savings. Most importantly, stick to your budget! That way, you know that you’re financially covered for each month.
Clear Your Debts
A recent study showed that 80% of Americans are caught up in the chains of debt; from medical debt to student loan debt, mortgage, credit card debt, and more. The problem with debt is the concept of ‘interest’. If you fail to clear your debts, it just keeps piling up until you have a monster that’s impossible to beat.
While paying the minimum requirement on all your debts, pour in extra money on your smallest debt until you clear it. Then move on to the next-smallest debt. Continue that way until you are debt-free.
But if you’re hopelessly submerged in debts, you should take a look into debt relief programs or you may have to declare bankruptcy. While this will hurt your credit score, it will give you a fresh start to a new financial life.
Increase Your Financial Literacy
The simple truth is that many people are bad with money and as a result, they get trapped in the ‘rat race’ as Robert Kiyosaki would say.
Learn about finances, read financial books, take online classes, and attend helpful courses. All this will help you know how to spend money and make wise investments that will secure your financial future.
Get An Emergency Fund
From time to time, sudden unexpected expenses do arise that disrupt your budget. Having an emergency fund ensures that you have extra money to take care of financial emergencies. Try to have, at least, $1000 in your emergency fund until you’re out of debt. Building an emergency fund may seem tough but by saving small amounts, you can gradually build up your fund. It’s always a worthy endeavor.
Make More Money
Cutting back your expenses has its limits. At some point, you’ll just have to figure out how to make more money; whether it be asking for a raise you may deserve or increasing your career worth through additional certifications or more education. You can also start a side hustle to make more money.
Luckily for us, we live in an interconnected world where making extra is easier compared to any other point in human history.
Talk To a Professional
Would you perform surgery on yourself if you need one? Hell, no! So why should you keep struggling with your finances when you can speak with a professional that can help you out?
Asking for help isn’t a sign of weakness, rather it is a sign of strength because it shows you are wise enough to know that you cannot solve your financial problem on your own. This will help you to manage your stress better and create concrete plans towards attaining financial freedom.
Practice Gratitude
This seems like a trite remark but it holds deep truth. Thanks to social media, within a few clicks you can see the luxurious vacation your friend is having in Rome or the new sportscar your previous university classmate just bought. All this gets you thinking about how messy your finances and life have become. Some try ‘keeping up with the Joneses’ but end up in a bigger financial mess.
If you have to take a break from social media for your mental sanity, it’s worth it. But most importantly, be thankful for what you have.
Be Determined and Patient
Escaping the trap of financial burden may take longer than you expect. That’s why you have to stay focused and determined on your goal. Take baby steps each day towards attaining your financial freedom, and in no time you’d begin to notice substantial progress.
While there might be minor financial setbacks from time to time, if you set your eyes on the prize and remain patient, you’ll be amazed by the peace you’ll experience and the results you’ll attain in your financial life.
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