Stress Less: According to a report by the American Psychological Association, almost 72% of adults surveyed said they felt stressed over money at least some of the time and approximately 22% said they felt extremely stressed over money (http://www.apa.org/news/press/releases/stress/2014/stress-report.pdf). Shocking statistics that need to change!
How can you stress less? Step back and take a deep breath. One way to help alleviate the amount of stress you feel is to take charge of your finances, not the other way around. I speak from experience. I have been so stressed before about my family’s finances that I couldn’t eat. I almost allowed stress to take my health and I am determined never to let that happen again. My hope is that you haven’t let financial issues take you to this point. If you have, you need to turn it around today!
Here are a few tips for stressing less over money:
Tip 1: Create a Budget – Contrary to popular belief, a budget is not difficult to create. List the money you have coming in and the money you have going out. Find where your money is going and put it where it works best.
Tip 2: Stick to your Budget – Needless to say, if you don’t stick with the budget it won’t work. I know what you’re thinking. I must be a rocket scientist to have figured that one out. It’s like having your personal trainer create a diet and exercise plan for your specific body type, age, gender, etc., and you don’t follow it yet you expect great results. How can it happen if you don’t put in the effort or have the willpower to do it?
I am often amazed at people when they say they just can’t stick to the budget. Here is my simple solution. Don’t spend more than you make! If your net (bring home) pay is $2,600 per month, you can only spend $2,600 per month. Live on what you make, not on borrowed money.
Tip 3: Get Out of Debt – You need to pay your basic necessities such as housing, utilities, and food first and then work on getting the emergency savings in place. I suggest you make a list of all your debts and put them in the order of the smallest balance to the largest balance. After your necessities are covered, begin paying off the smallest balance first. Pay all you can on the lowest balance debt until it is paid off. This frees up money to pay on other debt and before too long you will have paid off all your debt. Discipline is key here so don’t give up!
In this step we want to focus on paying off all the debts except your mortgage if you have one. Have you noticed that a laser can only point to a small area and not the entire room? That’s because the beam of light is focused. It has a specific purpose. It’s not trying to light up the entire house. Your home is one of if not the largest purchases you will ever make. Get those smaller debts paid for and then you can laser focus on the mortgage.
Tip 4: Save Money – One of the greatest tools for building wealth is saving your money and letting your money work for you. The compounding effect would come into play here. At first it may not seem like your money is growing much at all but given time, the compounding effect has exponential returns!
Step 5: Stay Out of Debt – Here is another ingenious statement: Once you get out of debt, stay out of debt! It would be similar to losing 50 pounds and then gaining the 50 pounds plus 10 more pounds. All the hard work and effort would have to be repeated with additional effort. Get rid of debt for good and get your mind focused on never falling prey to debt again! Learn to save and pay cash for purchases.
Tip 6: Enjoy life – Reward yourself for all the hard work and determination by enjoying your new debt-free life. There is such a peace and contentment knowing you have conquered this area of your life. Just imagine how wonderful it will be to enjoy the blessings of life by not having to worry about living paycheck to pay check again!
Take time today to make a list of all your income and expenses. Download the Monthly Income and Expenses Worksheet found on the “Forms” page to help you with this task. By completing this worksheet, you will be able to see where you may have problems in your spending. There is a Sample Tab with a completed worksheet for you to see. Once you have completed your worksheet, make a list of all your debts from the smallest to largest balance. Make a plan today to pay off the smallest balance within a short period of time. You can make this first step today toward a debt-free and more stress-free life!