Financial anxiety is a common condition today. With the cost of living hitting record highs, many individuals find it almost impossible to live on one paycheck, with some opting to take a second job to supplement their income. You however don’t necessarily need to look for a second job to achieve financial freedom. Learning to manage your finances through proper budgeting and saving for a rainy day might be all you need. Here are a few tips and steps on how to handle finance-related stress and anxiety.
1. Plan For The Future By Setting Realistic Goals
Are you looking to make a big purchase? Is retirement giving you sleepless nights? All you need is to start planning and saving for the same. This is, however, only achievable if you set realistic goals towards the desired venture. This might also mean making a few lifestyle and spending changes to help free up money to make these goals a reality.
2. Create An Emergency Fund
An emergency fund is meant to cushion you from financial stress and especially when times are hard. The beauty of starting one is you can start off with almost any amount, then build it up. Building an emergency fund improves your preparedness for unforeseen financial emergencies, including medical emergencies, job disruption, and even car breakdowns.
3. Keep Track Of Your Earning And Spending
Don’t just rely on credit cards to survive. Monitoring your income and spending should make it much easier to budget your finances appropriately. Start by watching how you spend money in a month to know what your expenditure is. Be sure to note everything down, as this will come in handy when creating a monthly budget.
Understanding the most significant and essential expenses and the cost of living should help you make an informed decision on where and how to spend and save up some more. You can also use tools, such as the CFPB, to help you analyze and control your cashflow/finances.
4. Be Careful With Your Shopping Habits
Do you always find yourself buying items on impulse? Creating a shopping list and sticking with it might help. Writing down a shopping list before leaving the house should help you realize what is needed and what you can do without that month. Just be sure to allocate enough money for essentials such as gas, food, clothes, and toiletries.
Always be on the lookout for discounts and offers in supermarkets and coupon codes when shopping online. Buying items on offer can see you save some money in the process.
5. Monitor Your Credit Rating And Reports
Many people ask can I get a loan with bad credit? A poor credit rating can be a cause of stress and depression for many people today. Keeping an eye on your credit scores and actively monitoring your credit reports might help maintain a healthy score in the long run. There are also plenty of tools (e.g., CreditWise) that you can use to monitor your credit status for free.
6. Seek Help
Did the Covid-19 pandemic take a toll on your income and worsened your financial status? If yes, the government might help with a mortgage, rent relief, unemployment, and student loan forbearance. You can also directly reach out to your lenders and creditors, especially if you have trouble serving your loans. Most of these companies will willingly provide hardship options that might help take the anxiety away. You might also want to seek professional help from a medical practitioner if you believe stress is taking a toll on your health as well.