Everyone has financial stress at times, but we all should limit how much this impacts our lives. Millions of people get divorced every year due to financial stress. It can be caused by being in debt, not making enough money, everyday expenses, or just mismanagement of your finances or having a partner who is poor with money.
By reducing your financial worries, you can focus on other parts of your life. Here are 5 things to help you learn to handle your finances and relieve your financial stress.
1. Start with Your Budget
Most people think that it is too hard to start and maintain a budget. They are partly right. Starting is the hardest part, but maintaining is not as hard. The first few months of setting up and working on your budget are the toughest. But it is the #1 tool you have to gain control of and greatly reduce the stress and worry about money.
A budget will let you know where your money goes, and then you can better decide when and how to spend your money. Basically, you will be working smarter and not harder. Focus on your immediate needs and expenses and then on how to reduce debt. Finally, focus on establishing a savings habit.
2. Set Up an Emergency Fund
When unexpected emergency expenses happen (and it happens with everyone), then having an emergency fund takes away all the stress you would have had while trying to cover those expenses. Medical expenses, auto repairs, utility bills, and even everyday things like groceries can throw you off and put you in a money crunch.
You should save up $1,000 for your emergency fund while working on reducing your debt. Your long-term goal should be to have up to 5-6 months of expense money saved up. Do not start by focusing on $1,000. This may seem overwhelming. Start small by saving $25 a week. Reduce those small, repetitive expenses like coffees you pick up or any other expense that is not a necessity. You may add to your fund by selling off some items, whether online or via a garage sale.
3. Get Professional Assistance
Almost every community has free resources you can use to learn more about money management and budgeting. Take advantage of what is easily available to you!
If you have enough income, you should seek out a financial planner to help with a long-term saving and investing strategy that will help you plan your future. And, if you are overwhelmed by debt, consider a credit counseling service. You may be able to restructure your debt or lower it.
4. Determine What You Can Change
If you have money problems, there are 2 reasons that you are where you are. Either you have too little income, or you spend more than you should….or both! If your income is too little to handle your ongoing bills (which you learned from setting up a budget), then you have to really think about your options to change the situation. That could include getting additional training to seek a better job or taking on a second gig for extra income. Today, there are many online and offline options to earn extra money where the schedule is totally flexible. You can work when you want.
5. Track Your Progress
Set goals that you can achieve, and then tracking how you are doing is a habit you should form. Even very successful people do this. In fact, studies show that even highly educated and successful people are 2-3 times more successful when they set goals and follow their progress. It will work for anyone.
Remember, you can change your money situation, and you will find it easier to do if you are not stressed out all the time. If you have no other options, you may consider a small, online loan to cover urgent expenses.
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