“If I only had some more money.”
“If I could just spend less than I do.”
“If I could just pay off my debts, I would be much happier.”
These and many other such thoughts are what a huge percentage of the world’s population stress about day and night.
It is no doubt that money is part of the equation for happiness in this generation, and as such, many people consider themselves unhappy if they do not have their finances in check.
Having too little of money or not being able to manage it can cause a number of sleepless nights and plenty of stress and anxiety.
Undoubtedly, financial anxiety is a great cause of stress in the current times. Regardless of what it is that you do, at one point or another of your life, you will experience some stress over money.
Everyone experiences it but the difference comes about in how you handle it. While a number of people have learnt how to deal with stress, especially that caused by money, most of us really have no idea what to do and are constantly worried.
If you are the kind of person who lives for payday, only to spend your money in a few days and thereafter struggle till the next paycheck, this article is for you.
Here are a few tips to help you deal with your financial anxiety.
1. Identify the cause of your stress
Financial anxiety can be brought about by a number of reasons. The first step towards reducing your anxiety is to pinpoint what exactly causes you to be restless over your finances in the first place.
- Are you spending more than you are earning?
- Are the kids expenses too much for you to handle?
- Do you owe a bunch of people money?
- Are you living paycheck to paycheck?
Identifying the actual cause for your financial stress and anxiety could go a long way into helping you decide the next course of action.
2. Budget and account for every penny
Come up with a plan for how you are going to spend your money.
Having a budget is a good idea, but often, we all have fallen prey to the temptation of buying something we have not budgeted for.
For that, I would recommend having an expense tracker. While an expense tracker will not stop you from spontaneous buying, it will go a long way to show you how exactly you are using your money. There are plenty of apps like Mint or some of the ones mentioned in this video from The Financial Diet:
Remember that every penny counts. Therefore, make sure you account for every penny spent or saved.
If you are the kind of a person who always wonders where your money disappears to, this move will certainly be of great help.
Most times, you spend money just because you have it. However, having a budget for all your money will help reduce spontaneous spending.
3. Save first, spend later
Often, we tend to spend first and if there is anything left of our paycheck, we decide to save that. That’s where you are going wrong.
From your paycheck, set aside a certain constant percentage which you will save every month. Once you have deposited this amount into your savings account, go ahead and budget for the balance.
This will certainly involve some discipline.
If you have direct deposit from your job, you might be able to have them deposit X% of your check into your savings, and the rest into your checkings. That’s a good way to help automate the process, particularly if you’re new to budgeting and saving.
You will find that this will even help reduce your monthly expenditure while at the same time ensuring financial security for your future.
4. Set up an emergency fund
Even after planning for every single penny you come across, emergencies do pop up.
And while some may be small needing to get a new tire, others may cause a really huge dent on your finances. Like losing your job or your whole car breaking down.
This is where your emergency fund comes to your rescue.
Having an emergency fund allows you to take care of your pop-up monetary needs without necessarily digging into your savings. An emergency car breakdown may seem daunting to your finances but with an emergency fund to take care of it, there will be less stress for you.
Most financial experts recommend having at least three months of expenses worth saved up. This includes enough to cover all your necessities like rent, food and electricity.
5. Be realistic
A lot of financial anxiety comes from setting unachievable money goals for yourself.
A goal such as saving up half of your money every month or only spending on essentials such as paying bills doesn’t seem quite realistic for most people, so you’re bound to fail.
When setting your saving goals , ensure they are attainable. And don’t forget to leave some room for miscellaneous expenses.
6. Avoid unnecessary loans
Don’t get me wrong, loans are really okay, but only if they are for a good cause.
Taking a loan to start a business which you project will get back the money you borrowed is fine. Unnecessary loans are things like a mortgage to buy a new house which you do not actually need, or taking a loan so as to take your family for a vacation.
Unnecessary loans will only add up to your pile of debts and cause more stress and anxiety. As much as you really want to go to Hawaii just as your neighbors did, avoid the urge to compare yourself to them.
Be content in your own financial situation and learn to live within your means, not someone else’s.
7. Get an alternative means of income
At the most basic level, there are two ways to get out of a financial hole:
- Increase your income
- Decrease your expenses
If your financial anxiety comes from the fact that you don’t have enough money to cover your expenses, you can always get an additional source of income.
You do not have to quit your regular job for a higher paying one. Find something you love and turn it into a money minting opportunity.
It could be writing, drawing, web designing, anything really. Thanks to the internet, anyone can turn their passion and skills into side income.
There are a lot of opportunities if you only look at the right places. Here’s a list of 99 different side hustle businesses you can start right now.
What’s good about it is that you could actually just work on them during your free time. Who knows, you may actually end up turning it into your full time career. And whats’s better than making money from something you love?
8. Take advantage of sales and promotions
The next time you come across a sale or a promotion and you are about to write it off because of whatever reason, please bear your finances in mind.
Most stores will at one point have a sale or a company may decide to have a product promotion. Grab that chance to buy two and get one free, or to buy your favorite product at a 30% discount. Especially for essentials that you buy on a monthly basis like toilet paper, paper towels, trash bags, etc.
Plan your shopping for a time when there are a number of such sales. You may end up buying twice the amount you would have bought, without the sales and save a whole chunk of money in the process.
9. Stay positive
Well, you may be thinking, how will staying positive improve my financial status? And while it may not actually increase that number on your paycheck, avoiding negativity could go a long way into relieving your financial stress.
Look at the positive aspect of your finances and be happy about it. Remember, there’s always someone worse off than you. And you’ll get out of the financial strain you’re in, it’ll just take patience.
Stop Stressing Over Money
While financial anxiety is inevitable, you can overcome it.
Any form of anxiety and stress causes you to be unhappy and in that capacity, reduces your productivity. Be it in your personal or professional life, stressing over your money will set you back.
Take the above steps if you are constantly anxious about your money. However, if you have a really big problem such as gambling or a shopping addiction, it may be wise to seek professional help.
Forget the stigma that comes with getting help and go ahead and do it. Think of your future and the negative impact your current lifestyle will have on you and your family.
Just bear in mind that you do not necessarily have to be rich for you to lead a stress free life. While money cannot buy happiness, it also shouldn’t be the source of unnecessary stress in your life either.