According to American Psychological Association, Americans – specifically parents, younger generations, and people with lower-income – has higher levels of stress especially when it comes to money. And,as we all know, stress can lead to a lot of negativity. But not all hope is lost. You can still lead a financially stress free life and deal with challenges like a boss. Just keep on encouraging yourself, be disciplined, and consistent with these ways:
1. Realistic Budget
Determine all your expenses – essential needs, bills, debts to pay off, and your overall cost of living. Add these all up and see if it exceeds your income or is nearly finishing all your money and not leaving you any money to save or invest – if it comes out this way, then you have to rethink all your expenses and come up with a budget. Adjust all your expenses and if it means you need to cut down on a few stuff and live simpler, then do it!
It’s more important that your regular expenses won’t soak up all the income you make and leave you worried and stressed if you will make it until the next payday. Now, if you disagree with a simpler life and being on a tight budget, it’s best to look and add your sources of income. This will be discussed later on.
2. Have a Rainy Fund
Emergencies come unexpectedly – and, for those without a rainy fund, this situation will lead them to more stress and breakdowns. This may even lead you to liquidate your assets prematurely, borrowing money, and therefore getting deeper in debt. It’s always best to be prepared in advance to avoid situations like this. Besides, imagine the opportunities in the future when you have a rainy fund stashed! It will open you to more options rather than limiting it.
How much should one save at least you ask? Well, it’s advised that a person should save at least 2 years of his income to lessen challenges and be more prone to a financially stress-free life.
3. Stay Debt Free
This may be hard but you only need focus and perseverance. Discipline yourself you pay debts first before anything, especially those that grow with interests! There are different methods available that can help you pay your debts one at a time, just like the “debt snowball method”. The extra effort and patience will be all worth it when you are finally free from debts, loans, and mortgages!
Also, don’t ever think debts are a punishment. Think of them as your responsibility and a challenge for you to do better. Finding creative ways to pay them off one by one will teach you patience, discipline, perseverance, and wise thinking. You’ll become a better and stronger person after all your realizations of being responsible for paying all your debts. Being debt-free leads to a financially stress-free life.
4. Determine Your Needs and Wants
Have a moment to stop and reflect to think of your lifestyle. Determine your currents expenditures and know your real NEED and WANTS. And, as you have heard so many times, prioritize your needs over anything else especially from luxury. Your wants can wait a little longer while you build your value and income.
5. Save to Invest
DO NOT save just to save. Investing is one of the best ways to grow your money and to make your money work for you. You can either invest in a business, on stocks, bonds, and more. But you don’t have any idea with these kinds of investments, you say? That’s definitely not a problem! A Professional Financial Advisor can help you plan your investments and make sure you’re moving towards growing your finances. The more streams of income you have, the more it will lead you to a financially stress free life!