Financial stress is a huge problem in the world, especially in the United States. While the stock market is reaching new highs, not everyone is stress free when it comes to their finances.
Between student debt, consumer debt, overspending, and wages that really aren’t keep up with inflation — it’s easy to see why many struggle financially.
I mean, take a look at some of these personal finance statistics. Yikes!
And certainly some of these money problems are a combination of personal bad choices, but also the cards you were dealt in life.
Everyone’s experiences and personal situations are different from the next, but everyone has a shot at becoming financially stress free.
Below are a few tips to help you be more at peace and worry less about money.
Steps to Help Eliminate Financial Stress
Stressing about money and your family’s finances is emotionally and physically exhausting. And you can easily get overwhelmed about where and how to start correcting the path.
A few years back I had these same struggles.
Before I share some steps to building a plan towards financial peace, there are a few things you should do.
These are things that will help your mindset and get you thinking differently about money.
Ignore social media feeds
Don’t worry about what your friends or family is doing or currently has.
You end up playing the game of “keeping up with the Joneses” and stressing yourself out more thinking you are behind what your peers have.
Remember, social media doesn’t show the whole picture and many of those images and captions hold half truths.
Additionally, unfollow brands that may trick you into buying something. If consumer debt is a challenge for you, time to remove all of them from your feeds. Of course, you still may be targeted for ads, but that’s less of a chance of images showing up and tempting you.
Don’t compare yourself to others
Similar to how social media feeds of your connections make you feel, don’t compare yourself to others either.
This can be a hard habit to break, but will keep your mind at ease if you can master this.
There will always be someone better off than you and someone worse off as well. Stick to your priorities, achievements, and stay focused on your and your family.
Take a hard look at where things went wrong
If you find yourself living paycheck to paycheck or struggling with money, figure out where it went wrong. Only when you confront the issues or mistakes can you make corrections to better your future.
This will not be easy and may initially stress you out more at first.
But I find this to be a must to help you create a better plan of attack. The goal here is to identify the issues and get motivated to make changes.
Your Plan to Financial Peace
While stressing about money might be common because having a lack of it or mounting debt, mindset is a huge piece to the puzzle.
It’s why I wanted to share those about three things first.
But once you work on those areas, you can start to put a plan in place to obtain your desired financial peace. And that can mean different things to you.
Maybe financial peace to you is eliminating a big chunk of debt, maybe it’s to stop using credit cards, or maybe build an emergency fund.
Whatever it is or combo of things, these steps are essential to becoming more stress free about money.
Analyze your current finances
After you see where things might have taken a turn, you also what to analyze your current finances. Everything.
Meaning look at your total debt, your monthly income, recurring expenses, etc.
Put all of this information into a readable excel sheet or user personal finance software to help you keep tabs. It’s hard to make changes when you have no clue about the numbers.
Cut out what you don’t need
During your personal number crunching, you may start to see recurring bills that are not that important.
Subscriptions to different services you barely use or maybe you are just overspending on going out to eat or groceries.
Find areas you can cut out completely and cutback on. This won’t revolutionize everything financially for you, but it starts to clean things up and give some extra cash back.
Start a simple budget to stay on track
I’m not going to lie here. I really dislike budgeting. But in the early days of figuring out your finances it’s quite important.
Although tedious and not a lot of fun to do, it helps you adhere to strict spending and saving.
Again, after running the numbers you can use a simple spreadsheet or use a budgeting platform to help you. A quick Google search will yield you a few great choices.
Create a debt pay off plan
Majority of financial stress for many is crippling debt. This can be high-interest debt from credit cards or the vast amount of student loan debt still plaguing you.
Debt makes it challenging for you to save money, especially when the interest ensures you are paying this debt for a long time.
Total household debt was $ 13.67 trillion as of early 2019, according to a the Federal Reserve Bank of New York.
If you have debt, it’s time you make a plan for yourself.
Start asking (and answering) questions like: How can you pay off extra? Is there ways to consolidate and remove some of the payment pressure? What can I do to knock these down quicker?
Increase your financial literacy
The key to eliminating money stress is improving your financial literacy. Unfortunately, a lack of financial knowledge and understanding can keep us trapped.
I know I really only learned the very basics in my teens, but until I got serious with teaching myself and learning is when my finances really started improving.
Try not to be intimidated. It’s not as hard as you may think.
Instead, take your time and start reading various personal finance books and money topics. There are tons of good ones that keep it simple and make it easy to learn. Additionally, listen to podcasts about money if you think you’ll absorb better by listening.
Figure out how to make more money
While cutting back on spending and budgeting will be helpful, we can’t forget the value of making more money.
There is only so much expenses to cut and spending to stop, but it still isn’t necessarily going to be enough.
One of your goals is to figure out how to bring in more money. This can mean asking for a raise you may deserve or start improving your career worth (certifications, shadowing others, asking management how to get to the next level, etc.).
Another option is starting a side hustle that brings in some extra money. Many of your hobbies can make money for example. Or maybe you have skills that others would pay for you to do.
We are in an era where there are tons of ways to make extra money and that can go towards paying down debt, creating a financial buffer, and amping up your savings.
You know the cliche saying, “Rome wasn’t built in a day.” Well, neither is removing financial stress from your life.
But as you work towards your financial goals and stay motivated, progress is inevitable. And you may have setbacks along the way, which is completely normal.
It took a good five years for me to remove money stress from my life. Over that period there were setbacks (like a job layoff) and there were small financial wins too.
But if you remain patient, you’ll be amazed at the results you’ll have and how at peace you are financially.