How To Stop Worrying About Money
8 Minute Read | August 26, 2021
Worried about money? If youre not, youre weird.
Money is one of the biggest things Americans worry about, even more than their jobs, families or health. The crazy thing is, money worries directly impact your well-being in the rest of those areas. So, I want you to be weird!
Money Stress Is Killing Me: Conclusion
Begin with the end in mind of what you want your life to look like can help set you they cleared the direction to head in and help you decide which path will get you there either the quickest or the smoothest.
Getting your paperwork sorted will help to remove some of the confusion and anxiety around were or what your money is doing. Get yourself a file some dividers and start ordering your paperwork.
Build yourself an emergency fund of three to six months or whatever size seems appropriate to you to ride out any likely financial challenges. This way, you can sleep at night easily knowing you have enough money to cover your lifestyle costs until hopefully, you can find another income.
Automate your finances. This will reduce the amount of time you need to spend jumping in and out of your bank accounts to set things up he should make sure that bills are paid on time and that savings happen automatically. You can also find apps that will give you real-time information on when and where youre spending your money.
Dealing with debt. Make sure you are making the minimum payments on all your debts to avoid further interest adding to your debt. Decide on a plan for dealing with your debt whether thats using methods like the debt snowball or the debt avalanche to start freeing yourself of this source financial and money stress.
Any Stress Can Take A Toll On Your Health But Money Stress May Be Particularly Toxic
Some stress is the kind you experience when youre in immediate physical danger, which heightens your senses and gives you extra energy to take action thanks to the stress hormones your body releases in response, Molitor explains.
But when there is no immediate physical danger if the threat is perceived those hormones that get released end up wreaking havoc on your body. More problematic still is when those stressors are chronic ones that you deal with day after day, week after week as is the case a lot of the times when it comes to money worries, Molitor says.
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How To Pay Off Debt
There are two well-known ways to pay off debt. One is called a debt snowball, and the other is called the debt avalanche.
The debt snowball is where you start with the smallest debt paid off and then move to the next one and then the next one and the next one slowly building up to paying off the most significant debt.
The psychology behind the debt snowball is that the quicker you can make progress on paying off debts, the more motivated you will be to keep going. As you chalk off each debt repaid, you will find more energy to move to the next one and then the next one.
The debt snowball is a way at chipping away at your debts rather than trying to pay them all off at once, which might be too big a debt snowball to eat at once.
The 2nd way to pay off debts is called a debt avalanche. This is where you start with the debt with the highest interest rate and throw everything you have at that trying to pay this one off as quickly as you can.
With the debt avalanche method, you make minimum payments on all your debts and then work your hardest to pay off the highest interest rate debt as quick as you can.
Assess Your Regular Expenses And Bank Accounts
Its easy to get stressed about money if you dont have a way to organize your regular expenses and are not sure which bank account to use for what.
Chad Rixse, co-founder of financial planning provider Millennial Wealth, says the bucket approach to budgeting is one way to stop stressing over money. The bucket approach means lumping expenses into categories and creating separate accounts to manage each category. For example, the bucket approach may include:
- A main checking account for fixed expenses, such as rent/mortgage, utilities and loan payments.
- A secondary checking account for discretionary expenses. These are nice-to-have expenses that may fluctuate, such as travel, entertainment and dining out.
- A savings account for goals and investments, such as a home down payment or retirement.
Using this approach can prevent overspending, minimize the time and effort that goes into effective money management and help you become less stressed about money.
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Set Up Direct Deposit
Think of your checking account as a hub for your personal finances. Income is deposited into the account, and expenses are paid out of it. If youre dealing with financial stress, your first step is to optimize your checking account hub by setting up direct deposit with your employer.
With direct deposit, your paycheck will automatically get deposited into your checking account. Skip the stress that comes with manually moving money between accounts following each and every payday, and save time by automating one task on your financial to-do list.
If you set up direct deposit with a checking account that rewards you for debit card purchases, you can start earning on the money you spend right away.
Youll also want to consider setting up direct deposit with an account that has an extensive ATM network so you can withdraw cash when you need it. With Discover Cashback Debit, for example, you can withdraw from over 60,000 no-fee ATMs.1
Good news: Setting up direct deposit as a way to stop stressing over money is easy and convenient. Start by checking with your employer to learn the setup process, and ask if online enrollment is an option. Youll just need your account number and your banks routing number, and a voided check may be required.
Check your inbox for a welcome email with financial tips to get you started, and look for our Modern Money newsletter each quarter.
Work With A Financial Advisor
When you think about planning for your financial future, such as saving for retirement or your children’s college education, it’s easy to get overwhelmed at the scale of the undertaking. If you suffer from money anxiety, you may feel too intimidated to do anything at all. A professional financial advisor can provide the guidance you need to take action on your financial goals with confidence.
You don’t have to be wealthy to work with a financial advisor there are plenty who cater to middle-class clients or young adults just starting out in life. No matter what shape your finances are in, a financial advisor can help you identify your goals and develop a step-by-step plan to get where you want to go. Taking control of your money will help you feel better prepared for the future, reducing your anxiety.
Many financial advisors offer initial free consultations, so you can make sure the advisor is a good fit before you pay any money. You should also carefully investigate an advisor’s background, education and credentials before working with them. The Consumer Finance Protection Bureau has a useful guide to choosing a financial advisor.
Similarly, if you have trouble managing your debt and want help from a professional, seek the guidance of a certified credit counselor with a nonprofit agency who can help you find strategies to reduce your debt.
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Be Brutal With Your Expenses
Is there anything you could cut to save even more money? Is your second car really necessary? If youre renting could you and your family, consider downsizing to a smaller home until youre more financially stable? Cutting out coffee shop drinks and takeaways will only do so much for your finances. If youre really struggling, then doing something drastic may give you the financial breathing room and the lower stress levels youve been looking for.
Build A Financial Safety Net
Another way to deal with financial stress is to get in the habit of saving. If youre feeling stressed about money, start by making a commitment to save a slice of each paycheck and have the funds automatically deposited into a savings account. You can start small to build savings momentum and then work toward a specific savings goal. According to the 50-20-30 rule, for example, 50 percent of your paycheck should go toward must-have living expenses, 20 percent to savings goals and the remaining 30 percent to discretionary spending.
One of the first things you should do with that 20 percent savings bucket to feel less stressed about money is to start an emergency fund, which is cash you set aside for unexpected and often urgent expenses . You should have three to six months of living expenses saved at a minimumwhich means if you need $3,000 a month to cover your basic necessities like housing costs, utilities, gas and food, youll need at least $9,000 in your emergency fund.
64 percent of adults are stressed about money.
American Psychological Association
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Stop Comparing Yourself Especially Online
Social media is saturated with pictures of trips, cars, and other clear indicators of wealth. No matter how accurate your perception of your friends or social media influencers wealth actually is, comparing yourself and your finances to others adds to your overall stress level. Trying to measure up often makes you feel like you arent where you should be or like your efforts to save money arent enough.
The next time you find yourself falling into the trap of comparison, remember:
If all else fails and you still cant stop yourself from feeling stressed and depressed because your friend just went to Hawaii, it might be time to put your social media accounts on hold until you can gain control of your feelings.
Why Americans Have A Hard Time Saving Money
There is a plethora of reasons behind our insufficient savings habits, such as a lack of discipline and making bad financial decisions. Maybe, it is simply that good jobs and hourly rates just don’t exist anymore for the lower and middle class . We can even rationalize that the value of the dollar doesn’t go as far as it used to, and, therefore, neither will our paychecks.
Regardless of the validity of these arguments, our financial habits have a direct impact on our ability to save and our overall financial well-being, regardless of the inflation rate or our income level.
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Reasons You Worry About Money And How To Stop
If youve been feeling stressed out, theres a good chance your finances are the culprit.
Money is the top cause of stress in the United States according to the American Psychological Association.
To get specific, 54% of workers cite money matters as their biggest cause of stress thats more than their job , relationships , and health concerns .
All of that financial stress ultimately has a major impact on physical and mental health. Seventy-five to 90% of all doctors office visits are for stress-related ailments and complaints including chest pain, headaches, high blood pressure, insomnia, and depression.
A first step in getting rid of money stress and living a happier, healthier life is to identify what specifically is causing you to worry.
Here are five of the most common situations that cause us to worry about money and what to do about them.
1) You dont trust yourself to make the best decisions.
Most schools dont teach personal finance, so chances are you never had the opportunity to learn how to manage your money the right way.
Thats why its so easy to hit the panic button whenever the topic of money arises. You know its important to make the best financial decisions, but youre not sure how. Not feeling confident in your ability to do something that you know is important can be extremely stressful.
2) Theres a disconnect between your spending habits and your values.
5) You dont have a safety net.
Do This To Stop Stressing Over Money
For many people, money is either a blessing or a deal breaker. Lack of money flow is often caused by poor management. If youre always stressing over funds, you may need to find a way to gain more clarity and control. This starts with a healthy and understandable budget. Stop worrying now! Heres how to implement a budget, no matter what your financial situation is.
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Symptoms Of Financial Stress
There are obvious symptoms of financial stress that we can identify when we experience significant situations in our lives, as well as more subtle signs of burnout that can make problem solving seem impossible. Watch for these signs and symptoms of financial burnout:
- Constantly thinking about your budget, or lack thereof
- Feeling stressed about where your money is coming from and where its going
- Feeling guilty, exhausted, depressed or overwhelmed about your finances
- Feeling cynical or apathetic towards your financial goals
- Lack of sleep or increased anxiety just thinking about money
If you are experiencing any of these symptoms, youre probably struggling with financial burnout. Luckily, there are ways to combat this so you can get back to feeling like you againwithout your money dragging you down.
Switch To A Lower Student Loan Payment
Lowering your monthly student loan payment can provide some breathing room in your budget. If you have federal student loans, you can switch to an income-driven repayment plan which may result in a lower payment. IDR plans also offer loan forgiveness after 20 or 25 years, depending on the plan and type of loan.
Heres how much of a difference you might see every month. Lets say you owe $50,000 in federal student loans with a 5.28% interest rate and a 10-year term. If you switch to one of the IDR plans, your monthly payment would be $256 compared to $537 on the standard 10-year plan.
The main downside of an IDR plan is that your repayment term is extended, and you may owe taxes on the forgiven amount when the term is over. But its a good temporary fix if you need a lower payment. You can always switch back to the standard plan if you want to repay your loans faster.
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How To Stop Stressing About Your Money At School
3 tips to help you stop worrying about running low on money
5 minutes read
Going to university and college is an amazing time to make memories and to prepare yourself for your dream career. Its also a time for a lot of financial responsibility. Between juggling classes, a part-time job, and a long list of bills, it’s common to feel stressed about money.
The good news is that you don’t have to live in anxiety over your money until graduation. There are several small yet significant changes you can make to diminish your budget worries.
Create a No-Brainer Budget
Does the idea of making a budget sound daunting? Budgeting doesn’t have to be as hard or time-consuming as you might think. Split your expenses into two sections: ones you can control and ones you cant. For example, your rent and car payment are going to remain the same each month, but your eating out bill varies according to you.
First off, calculate your recurring bills like your rent, car payment, health and car insurance, utilities, and cell phone and internet bill. These are non-negotiable and should be budgeted for first.
Any money leftover is dedicated to your variable expenses. They might go towards the following:
- Emergency fund/unexpected costs
Make Saving Money Your Job
Saving money can be fun. No, really! Take an active approach to your finances as if you were getting paid to live frugally. Here are a few innovative ways to stretch your budget further:
Know When to Ask for Help
Stressed About Money 6 Stress
Alleviate financial stress with these 6 tips.
Vacation plans maxing out your budget? Dont have an emergency fund? Not sure how youll pay down creeping debt? Its not unusual if thoughts like these keep you up at night or distracted during the day. In fact, survey after survey shows that Americans are stressed about money. According to one by the American Psychological Association, nearly two-thirds of adults say that money is a stressor.
So whats the answer to the million-dollar question, How can I deal with financial stress? Maybe a million dollars But one things for sure. Worrying wont solve much. However, figuring out the sources of your financial concerns and working to address them can.
A lack of basic financial security makes it much harder to feel happy and can add stress to your everyday life, says Uri Pomerantz, founder and CEO of saving and investing app Twine. But achieving financial stability doesnt require a miracle. Just applying a few basic steps, and having patience, can help alleviate any stress you may feel.
Here are six simple ways to stop stressing over money:
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Always Keep Yourself In The Loop
Too scared to check your bank account? Or dont you want to open that bill? These kinds of habits can make managing your money a real headache and even induce anxiety and panic attacks! To keep your stress levels low, you need to be in better control, and that means keeping yourself in the loop. Dont know how much is in your account? Check right now. Dont know when youll get your next set of benefits paid into your account? Find out. The more you know, the more in control you are.