Managing Financial Stress
Financial concerns are ever present, especially given the uncertainties of today’s economy. We all know that worrying doesn’t solve much, but having a plan to manage your financial challenges can help ease some of that stress. Plus, the monetary benefits of dealing with financial problems like paying off bills or saving more money, can help improve your overall outlook. Follow these tips to help you manage your financial stress and take back your peace of mind:
Identify Sources of Financial Stress
The first step in managing your financial stress is identifying specific issues that are triggering it. Maybe you’re sitting on a mountain of credit card debt or a large upcoming bill is looming over your head. Whatever the issue, pinpointing the source of your stress can help you determine your next move so you can properly deal with your stress. Start by writing down your biggest money challenges (paying off your car, paying off a credit card, etc.). Try to keep your list short in the beginning to reduce the chances of being more overwhelmed. It’s important to revisit the list every three to six months to hold yourself accountable and ensure you are making progress towards your goals.
Create a Monthly Budget
Budgeting is a powerful tool you can use to take control of – and understand- your finances. Having a set budget and sticking to it can help you avoid spending more than you have as well as assist with saving for future goals. Once you have an idea of where your money is going every month, you can look for opportunities to redirect some of it to the areas causing your financial stress. Start with listing out your take home pay for each month. Make sure you account for all expenses including rent, phone bills, and even your daily cup of coffee.
Get the Most Out of Your Income
When money is tight, it can seem like you don’t have enough to deal with your financial problems. However, it’s important to get the most out of the income you do have. Categorize your spending into wants and needs, then look for ways to cut back on your wants list. Small amounts add up, so even if it means cooking at home instead of stopping for fast-food or settling for home-brewed coffee instead of the fancy $7 latte at your favorite coffee shop, that money can be used to help pay down areas that are causing financial stress. You can still enjoy these things, just as an occasional treat rather than as part of your standard routine. You can even consider modifying your budget to prioritize goals that will help ease your financial stress, such as paying off a high-interest credit card.
Establish an Emergency Fund
Having an emergency fund set aside for events such as car repairs, job loss, or illness can go a long way towards relieving financial anxiety. It’s recommended to save enough to cover three to six months of expenses, but don’t allow yourself to become overwhelmed on numbers. What’s important is that you’re consistently setting money aside. When building your budget, determine how much you can contribute each month toward savings after accounting for other month expenses. You can even set up automatic transfers from your checking to your savings account, that way the funds will be moved before you can miss them. Our Change the Way You Save option is also a great way to save money without even trying. For every purchase made with your Robins Financial debit card, we will round the total to the next dollar and deposit that difference into your savings account.
Be Strategic About Reducing Debt
Credit card debt is one of the most common sources of financial stress. Not only is it expensive, but it can also get in the way of your savings goals. The antidote to this anxiety: making a plan to pay off your debt. If you have balances on multiple cards, consider using the snowball method. This method involves paying down the smallest debt first and working your way up to paying off the largest balances. You can also consider a balance transfer to combine multiple card balances into one lump sum. This could land you with a lower interest rate and reduce the stress of paying off multiple credit card companies with different due dates. Just remember, whatever payment strategy you choose, stick with it and don’t give up!
Don't Be Afraid to Ask for Help
If you’re unsatisfied with your progress in reducing debt, there is no shame in asking for additional help. You may want to seek help from trusted resources such as the National Foundation for Credit Counseling, or if you’re looking for guidance on long-term goals such as saving for retirement, financial advisors can help. Maybe you’re just looking for moral support – your friends and family may be able to offer the accountability and support you need to reach your goals. Sometimes it’s nice to just have someone cheering you on.
No matter your circumstance, don’t allow your financial situation to cause you more stress than necessary. By following our tips, you are sure to reach your goals and relieve some of that financial stress one step at a time. Just make sure to monitor your progress, make adjustment to your spending when necessary, and seek help when you need it.
At Robins Financial Credit Union, our mission is to enhance the financial well-being of our members and community. We honor this commitment by providing educational content to help you make the most of your finances. Read our other blog articles to help you gain the financial knowledge you need to succeed.