Hey there! Do you get stressed about money? I think we all do, sometimes. Money is such an important aspect of our lives, whether or not we’d like to admit it. With that in mind, it’s perfectly normal to stress about money sometimes, but if you’re doing it often, that may be unhealthy.
In this post, I’ll go over ways to stop stressing about money and to help you live a financially healthier life.
Review Your Budget
One reason why you might be stressed about money is that you’re not entirely sure where it’s coming from or where it’s all going. The solution for this is a budget. Using a budget, you can accurately track your spending.
I prefer using a spreadsheet, but you might prefer tracking with an app, on paper, or using the envelope method. Once you know where your money is going, you can adjust your spending accordingly. This is especially true for discretionary spending; that is, things you spend money on that you really don’t need.
Reviewing your budget a few times per year may be just right for you, especially if you’re concerned about money. Some people even create a monthly budget, and that’s perfectly fine as well!
From personal experience, I recommend creating a monthly budget if you find yourself stressing about money. That way, you can examine your financial situation and determine what’s causing you to stress about your money.
If you’re new to budgeting, check out my post on how to create a budget. I go over how to set up a spreadsheet, track your income and expenses, and cut back when necessary.
Buff Up Your Emergency Fund
A financial hardship can strike at any time, but financial hardships can be mitigated or prevented altogether by having an emergency fund. Building an emergency fund can take time, but it’s absolutely crucial to have one.
If you don’t already have an emergency fund, it’s time to fund one. Open a high yield savings account, such as CIT Bank’s savings builder account, and start adding money to it with each paycheck or at the beginning of every month.
You’ll want to have $1000 in your emergency fund at the bare minimum, but most experts agree that you should have a minimum of three to six months of living expenses saved up, depending on your financial situation.
The key aspect of having an emergency fund is that if something happens to you, such as losing your job, an unexpected trip the emergency room, a car breakdown, or similar, you’ll have money to pay your bills instead of putting the balance on a credit card and ending up in credit card debt. Credit card debt can send you down the path of financial distress if you can’t pay off your debt quickly.
Saving Up for Your Emergency Fund
To save up $1000 can be a challenge in itself for some. One viable method to saving money for an emergency fund is to get a temporary side hustle. This could be something like driving for DoorDash or walking dogs in your neighborhood.
You can also save up your first $1000 by making a savings goal or going on a spending freeze. A spending freeze involves you not spending a penny for as many days as you can. That means you would not eat meals out, not order things on Amazon, and otherwise not spend money. The best time to do a spending freeze is after your bills are paid for the month.
Once your emergency fund is beefed up, it never hurts to continue saving money and doing a side hustle, but you’re certainly in a less vulnerable position now.
With an emergency fund, you’ll have less reason to stress about money.
Don’t Compare Yourself to Others
It’s so tempting to compare yourself to others. Trust me, I know. Whether it’s a friend, a colleague, or maybe trying to grow a following on social media, it’s easy to compare yourself to someone you feel is doing so much better than you are. They may be making more money, getting bigger bonuses, or landing more sales (or all three!).
The thing is, it’s important to focus on yourself and your own financial journey. It doesn’t matter how well Jim or Kim is doing. The more time you spend worrying about others’ money, the less time you have to spend working on ways to improve your own financial life.
A Story About Focusing on Oneself
Let me share a personal story about this topic to help convey the point. I used to focus only on how much money I felt I should have been making at my 9-5. I had an idea of what others were making based on how the company paid people of differing job titles. And, I was convinced that my performance deserved me a better salary.
I stressed over how to make as much money as my colleagues, and in doing this, I lost focus on the reason which was right in front of me. What was that reason? Solve big problems for the company and use that as leverage to ask for a raise.
And I finally did solve some big problems. Such a big problem that my VP, who was my manager’s boss’s boss, gave me a $20,000 bonus.
The moral of the story is, focus on how you can make more money without worrying about what others are doing. If you work in an environment where you can better solve problems, focus on solving those problems.
If you’re having financial hardships or are drowning in debt, focus on crushing that debt and getting into a better financial situation. It’s not about the nice things that Karen has. It’s about the nice things you’ll obtain when you’re laser-focused on your own situation.
Get a Financial Education
It doesn’t matter how much or how little money you have, you definitely need to educate yourself financially. The more you know about money, the better chances you’ll have at not suffering from financial stress. By knowing more about money, you won’t stress about money as much, because you’ll have the tools to find answers to your questions.
For example, Some people feel that if they have a high income from their job, they don’t need to care about finances because they’re doing just fine. But, what if that person were to lose their job, and thus, their primary income? Do they have the tools they need to cover their monthly expenses? Did they have an emergency fund just for this?
Related Post: 11 Life Hacks to Drastically Reduce Monthly Expenses
You would think that me, as a personal finance blogger, would have always had a solid education around finance, but I didn’t. In my early-to-mid 20s, I was financially lost. I lived paycheck to paycheck despite my wife and I making pretty good money for fresh college grads and newlyweds.
It was only after I realized that I would never get out of our situation that I dove deep into personal finance and read book after book. As I enveloped myself in personal finance books, I no longer stressed about money by finding answers to all of my questions and implementing solutions to my financial problems.
Limit the Time You Spend Looking at Your Finances
If you’re stressing about money, then one way to release some stress is to simply stop looking at your finances as much. An idea to try is to check in with your finances once per month. This would be the perfect time to check that your bills are paid, go over your monthly budget, look in on your net worth, and so on.
Your finances change daily. In fact, if you have a portfolio filled with investments, your finances change constantly. There’s simply no reason to stress about your money because you’re looking at the numbers all the time.
Instead, take a break from your money. Set up a schedule, such as the 5th day of every month, and spend time going into detail across your finances. By spending one day a month on your money and mostly forgetting about them for the rest of the time, you’ll stress less about money and focus more on the other important aspects of your life.
Create More Income Streams
If you’re feeling stressed about money and you can’t cut back any further, perhaps you can make more money. Take on a side hustle, as one example mentioned above, for creating an emergency fund and earning more money. Learn about investing and have your money grow itself.
There are so many potential ways to earn income, and many of them start with saving and investing your time and existing money to create more money.
Some ideas to creating income streams include:
- Investing in stocks that pay high dividends
- Investing in P2P lending
- Taking on one or more side hustles, such as starting a blog
- Showing your worth and getting a raise at work
- Jumping into affiliate marketing on social media
By setting financial goals and creating more money to work with, your money worries will decrease, and you’ll stress less about money in general.
Wealth is a Long Game
Here’s something to remember. Wealth is a long game. You won’t be wealthy overnight, and there’s no reason to try. So stop worrying about it so much. That’s right, tough love right there.
Your money will come and go every day, and building wealth will take many years, if not decades, of your life. That’s what it’s all about. Take control of your finances, but don’t worry about the everyday changes.
Your wealth grows by educating yourself about finances and managing your money effectively. By learning good money management skills, your wealth will come.
I used to write down milestone goals for my net worth, and I was sorely disappointed when I didn’t reach a goal. Now I set action plans rather than just goals. I figure out exactly how to build my wealth, and I stick to it.
If you’re having trouble setting these financial goals, you may want to speak to a financial advisor, which I’ll talk about next.
Speak to a Financial Advisor
A financial advisor, such as a certified financial planner, can help you reach your financial goals, which in turn should help you stop being stressed about money.
A financial advisor will work with you in coming up with financial goals and realistic ways to reach them. Whether you’re trying to pay off debt like student loans or credit card debt, your advisor will help you with the financial planning that you may not be able to do yourself.
By getting your goals out on paper and setting a realistic plan to get your goals accomplished, you should start feeling less stressed about money in no time.
Wrapping It Up
In the end, stressing about money can eat away at you. Finding solutions to your financial woes will help you live a financially healthier life and, in turn, help you stop worrying about your money. Then you can focus on more important aspects of your life and be happier overall.
What do you do to worry less about money and focus more on what you want to focus on?