Thank you Good Nelly for this informative guest post! See her bio below.
You will find no one who doesn’t worry about finances. However, not everyone is stressed. Worrying about managing finances well and feeling stressed to repay debt or to save for retirement is not the same. Financial worries are one of the major reasons for stress in modern times.
Do you know that financial stress can cause physical and mental issues? It can cause digestive issues, high blood pressure, headaches, insomnia, and it can also make you age quickly.
As per John Hancock’s Financial Stress Survey report, about 69% of people said that they worry about finances.
AS per American Institute of Stress report, about 77% of people said that stress affects their physical health as well.
Let us discuss how to overcome financial stress and improve your finances.
Plan a realistic budget
Yes, you will have to do it even if you don’t like it. The first and foremost step to overcome financial stress is to plan a budget. It will help you analyze how much you’re spending and how much you can save.
But I want to say something here. Try to plan a realistic budget.
You may become overexcited and plan a budget that’s difficult to follow. However, it won’t help you much if you can’t follow it. Therefore, at first, plan a realistic budget that you can follow. Then, with time, you can modify your budget and try to save more.
There are several budgeting strategies to choose from. I will discuss one of the strategies later in this article.
Track your expenses and try to save more
You might have heard a lot about tracking your expenses to know where you’re spending more. This is the next step after planning a suitable budget.
While tracking your expenses you might realize where you’re spending more. That will help you plan a better budget that’ll work for you to improve your financial situation.
Save fund for the rainy days
If the reason for your financial stress is debt problems, then you might have accrued it due to a financial emergency.
Therefore, you need to have an emergency fund so that you can use the money to tackle your financial emergencies.
But, the question is, how much will you save? Will it be ok if you save for about one or two months worth of your expenses? No, it won’t. The financial experts say to save for an amount with which you can sustain for about six months without any income.
So, calculate it accordingly.
Automate your savings and investments
Till now you might have saved the amount that’s left after your expenses. Let’s do it the other way now.
From now on, you will first save and then plan your expenses with the remaining amount.
To do so, you can plan the 50-30-20 budgeting strategy. When you get your paycheck, at first, save about 20% or 30 % of your paycheck. Usually, the rule says to save 20% and 30% is to satisfy your wants and requirements. But, I am saying you try to save 30% of your monthly earnings and satisfy your wants and requirements with the remaining 20% of your monthly income. About 50% is to meet your necessities and pay bills.
Now, automate your savings to the respective accounts so that you get only the 70% to plan your budget.
Create multiple earning opportunities
Earning a few dollars extra always helps when you want to repay debt and improve your financial situation.
Use your leisure time to do some side gigs. If you don’t have a full-time job, then you can earn by doing multiple part-time jobs as well.
Browse through the internet and choose jobs as per your liking.
Tackle debt right away
After you have planned a budget and are able to save more, now you’ll have to formulate a suitable debt repayment plan.
If you are able to repay debts in full but have problems managing your multiple credit card debts with different due dates, you can opt for credit card consolidation to pay back creditors fast. By choosing consolidation, you can repay your multiple bills through single monthly payments. You can either take out a consolidation loan or enroll in a credit card consolidation program to repay debts with professional help.
However, if you’re struggling to meet your daily necessities along with paying back debts, then a settlement program might help you solve your problem and ease out financial stress. By choosing settlement, you can get rid of your credit card bills by paying less than what you owe.
Worrying about managing finances well and feeling stressed to repay debt or to save for retirement is not the same. Financial worries are one of the major reasons for stress in modern times. Guest post by @goodnelly1 . Share on XSave for your retirement
The financial experts always advise to start saving for retirement from the month you earn your first paycheck. Retirement planning should be a priority.
As I mentioned before, retirement planning is another popular reason for financial stress.
If required, talk to an adviser and calculate how much you need to save for your retirement. Make sure you take into account your lifestyle cost along with inflation.
Then, set a goal to save a certain amount of money after 10 years, 20 years, and so on. This will help you track your progress that will help you modify your investment strategies to meet your target.
This is all about managing your finances well to reduce stress and improve your financial health. However, a little stress management strategies can help you solve your problems faster and improve your physical and mental health.
So, practice some stress management techniques. This is required because your problems can’t be solved overnight. However, reducing stress can help you solve your financial problems faster as it will help you make the right decisions.
Therefore, try to reduce your stress by practicing some relaxation strategies, like doing light exercises, taking a walk, spending time with your family, taking up a hobby, and so on.
Stay positive. Do something you like and plan for a better financial future. All the best!
Author’s Bio: Good Nelly is a financial writer who lives in Milwaukee, Wisconsin. She has started her financial journey long back. Good Nelly has been associated with Debt Consolidation Care for a long time. Through her writings, she has helped people overcome their debt problems and has solved personal finance-related queries. She has also written for some other websites and blogs. You can follow her Twitter profile.
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