5 Strategies for Dealing With Financial Stress
From creating (and sticking to!) a budget to developing an emergency fund, here are five concrete ways to start getting your finances under control and easing your stress.
1. Develop a Budget That Accounts for COVID-19 Expenses
When it comes to personal finances, a surprising number of homeowners just wing it. That can be stressful because you never have a clear understanding of how much money you have coming in, how much you’re spending, and how those two numbers match up. Too often, those numbers don’t match up and you end up spending more than you’re bringing in. Developing a household budget and sticking to it means you never have to wonder if you have enough money.
2. Write Down Everything You Spend
If you really want to get a handle on your spending and your cash flow, a great thing to do is start writing down everything you spend in a journal. Doing this for about a month will shine a light on exactly where your money is going. Most homeowners who try this almost immediately find several ways to pare down their monthly spending.
3. Have an Emergency Fund Capable of Covering a Job Loss
It could happen to any of us, especially in the current environment. The unexpected loss of a job can be a major cause of financial stress. Having an emergency fund in place that can cover three to six months of your expenses will go a long way toward ensuring your financial security. If saving that much money sounds daunting, set a small goal, to begin with. Setting aside even $50 or $100 a month can really help long-term.
4. Pay Down Your Debt
Making all those monthly payments toward your credit card balance and other forms of debt can be pretty difficult, especially when times are tight. Wouldn’t it be great if you didn’t have all those debt payments to deal with? Like establishing an emergency fund, paying down your debt is one of the most important steps you can take. Putting even just a few extra dollars toward debt payments each month is a great way to get started.
5. Prioritize Your Financial Goals
Once you’ve developed a plan for tackling your finances and easing financial stress, sometimes the hardest thing to do is to stay on track. Maybe there’s a sale at your favorite store, or you’ve been invited to go on a last-minute getaway with friends. Keeping your finances in order doesn’t have to mean never having fun again, but it does mean distinguishing wants from needs and staying on track with your goals. And telling friends and family about your financial goals is a great way to hold yourself accountable and get their help in avoiding unnecessary expenses when you’re out.
If financial stress tied to COVID-19 or a job loss is causing you to lose sleep and keeping your stomach in knots, it’s time to put together a plan to get back on track. Following these steps now will allow you to work toward a comfortable financial future.