Do you constantly worry about you financial well-being? If so, you are not alone as money is the second leading cause of stress amongst adults.1 If you do find yourself stressing about your financial well-being, there are a few things you can do to make it better. Financial stress can stop even the most productive people in their tracks, causing sleepless nights, avoidance of debt and denial. While it's best to talk to your trusted financial professional about what's on your mind, below are a five other techniques to start managing your financial stress on your own.
Tip #1: Make a To-Do List
Sometimes the most effective techniques are the simplest. Making a simple to-do list is an effective way to overcome financial stress in your life. By creating a clear list of what’s ahead can help make these financial tasks feel more tangible and achievable. When creating a to-do list it is best to start with the easiest tasks and slowly work through your list, checking things off one by one. A to-do list is also beneficial as it makes it easier to remember all of your financial tasks and there’s no need to bear the burden of remembering everything in your head. Starting with a list of tasks can help you more effectively build a plan of action.
Tip #2: Try Talking to Someone
While working with a financial advisor is recommended, it can also be helpful to talk with a family member or friend in the meantime. By keeping everything bottled up and to yourself it will only escalate your anxiety. If you’re able to, talk it out with someone you trust and be honest with them. Discussing your problems is a great way to ease the burden significantly. Your friend or family member may even be able to offer some advice or a recommend a financial advisor.
Tip #3: Review Your Spending Habits
One of the worst things that we can do is ignore our financial obligations. Although, ignoring the situation may be tempting, by putting your financial obligations off it will only make them worse. While some financial issues are more complicated than others, taking stock of your current situation can help build a better understanding of where you are today and what needs to happen. This often starts with adjusting your spending and saving habits. Here are a few things we can do right now to help address our current spending habits:
- List out every income source you currently have
- Determine your debts (student loans, car payments, credit card debt, etc.)
- Keep track of all your spending manually or using a phone app
- Identify potential spending patterns or triggers (when you’re stressed, right after payday, etc.)
- Determine what changes you can make to your average spending to save more
- Avoid impulse spending
Tip #4: Make a Plan and Create a Monthly Budget
Creating and tracking a monthly budget is a great way to get in the habit of healthier spending - and healthier spending habits which typically results in less financial stress.
Below are a few steps for creating your monthly budget:
- Listing out recurring expenses such as gas, groceries, utilities, etc.
- Prioritize contributing to your emergency fund each month
- Set up automatic payments to avoid late fees or interest
- Determine where you may be able to cut down on spending (entertainment, clothes, etc.)
Tip #5: Establish a College Savings Plan
If you have a young one at home, paying for college is likely looming over your head and causing you stress. To ease this large financial burden, consider taking the time now to establish or check up on your 529 plan. A 529 plan is a tax-advantaged savings plan is designed to encourage saving for future education costs (such as tuition, room and board, etc.). You and other family members can contribute to the account, which will gain interest over time as you set aside funds to pay for a child or grandchild’s education. College is expensive so, establishing a 529 plan is an excellent way to reduce financial stress in your life.
Getting your finances in order is no easy to accomplish. However, identifying your main stressors and establishing a plan to address them can make a big difference in how you and your family feel about your finances. If you’re feeling lost, confused or stressed about your financial standing, feel free to reach out to one of our trusted financial professional as they can further assist you as well as making sense of your current financial situation.
This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.