Feeling stressed about money? Money is a well-known and understandably large source of stress and anxiety in our lives, and even those in a good financial position can find themselves tossing and turning at night worrying about their finances. This is amplified at the moment with the rising cost of living, which is putting a great strain on people’s finances with many worried about how they will manage. Reducing financial stress is important as it can have a large impact on our mental and physical health. There are a few steps to take that will hopefully help you to reduce stress, manage your money effectively and find comfort; some of which are listed below.
Build Up An Emergency Fund
Creating an emergency fund can help to reduce the panic and worry of financial stress. Knowing you have a bit aside to manage your expenses during difficult times can give you peace of mind – whether it is because you have an unexpected cost, you go over budget one month or lose your job. Generally, it is recommended to have 3 to 6 months’ worth of expenses in your emergency fund and this needs to be somewhere that is easy access.
Control Spending With A Budget
People often worry about money because their spending can feel out of control. Therefore, having a budget in place that controls your spending can help you to feel and make decisions easier. A good budget for beginners is the 50/30/20 rule – this involves 50{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of your income going towards essentials (rent, mortgage, bills and food), 30{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to non-essentials (days out, clothes, takeaways) and 20{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} towards debt and savings (you can adjust the percentages based on your own needs, it’s just a rough guide).
Speak With Retirement Planners
Another reason that people worry about money is thinking ahead to the future. Even those on an above-average salary can find themselves stressed when thinking ahead to retirement, which is why it is a good idea to speak to retirement planners. They will be able to help you build towards financial security and an enjoyable retirement by listening to your goals and analyzing your situation to create a financial plan that will help you to achieve these goals.
Cut Back
An effective way to feel less worried about money is to cut back on your spending. Everyone has areas in their life where they are able to cut back even if it’s only for a few months to increase your emergency fund, whether this is shopping at a cheaper supermarket, cutting out a luxury purchase, making more meals at home or cancelling a subscription service. Many people also find it helpful to go on an occasional “spending freeze”, which could involve 2 weeks (or months) of only spending money on the bare essentials as a way to boost your finances.
Hopefully, this post will give you a few ideas and help you to find ways to reduce financial stress. Many people worry about money, especially in the current economic climate, which can take its toll. There are always ways to reduce financial stress, though, and these tips could also help to improve your current situation.
