Americans say that finances and money are the biggest cause of stress in their lives. Yet, so many do not take steps to relieve that stress. COVID- 19 has increased this stress many times over with an estimated 30+ million people unemployed nationwide. That is the worst since the Great Depression.
For many people, feeling financially secure may be covering everyday expenses, and even that is difficult in these times. We certainly can’t control the onset of the virus and other external factors, but we can take steps to improve our financial condition.
Let’s start by reviewing some steps to achieve more security and not be part of a financial crisis.
Establish Your Budget
We have all heard this many times yet, so few people do this. As a result, most people really don’t know where all their money goes. Yes, we know our rent amount and large expenses, but we rarely track anything else. Those daily coffee stops can add up to $80 or more every month. Eating out frequently can be hundreds of dollars a month. Cutting back on non-essentials can make a lot of cash available to take some of the next steps.
Have an Emergency Fund
More than 50% of Americans have less than $500 available for any kind of emergency. Everyone should try to establish the discipline of putting away money from every paycheck. It could be as small as $25 and build from there. If you can identify some of your non-essential spendings, you can find the money to put away. You want to have at least a few months’ expenses in your fund.
Pay Off Debts
This seems obvious, but many people always pay the minimum payment and end up with tons of interest expenses they shouldn’t have each year. It takes discipline, but lowering debt reduces your monthly expense but also saves a lot of money.
Establish Credit Lines
If you have little or no credit, you should try to start setting up simple lines of credit. If your credit is really poor, you can get a prepaid card that you pay off on time as a starting point. Building credit by paying on-time or early and increasing credit lines on cards you already have will all improve your credit scores, which will save you interest on any credit purchases or loans.
Improve Your Skills
Part of improving your financial condition can be to improve your skills. You can do this at no cost if you are creative. There are many online resources available to you, and many communities have free courses you can take to improve your knowledge and skills. This translates to better jobs and better positions that pay more and help you with the debt payments, building savings, etc.
Importance of Your Financial Condition and Security
Having a stable and comfortable financial condition will not necessarily make you happy. However, it will relieve your daily stress and let you enjoy with your family, friends, and even hobbies. In turn, your home life will be better with lower stress. Couples say money is the number one stress factor in their relationships, so reducing that stress leads to much better times.
How to Be Financially Stable with Low Income
Many people do not think this is possible, but it is. If you establish a budget and stick to it, you can feel comfortable that you are in control. Adding the step of having a sufficient emergency fund will lighten your load even more.
It will take time, but the stress relief is worth it. You can be happy and feel more secure by taking a few critical steps that most people avoid. The good news is that countless people have done it already, so you are not alone and are certainly capable of doing it too!
