Causes of Financial Stress
Ever feel like there is not enough money? I am betting since you found your way here, you experience stress about money frequently. While there are definitely some unforseen events that lead to financial stress, most financial stress is self-inflicted. That's right. It is painful to hear, and we are often in live in denial. But the sad truth is that our own habits are what lead to our own stress. Here are some commons problems with money that cause stress:
Debt - Undoubtedly, the leading cause of financial stress. The saying goes "the borrower is slave to the lender." Debt creates a sickening feeling that eats at most people. Just knowing that you owe money to someone can cause a lot of financial anxiety.
Expensive Emergencies - Murphy's Law states "What can go wrong, will go wrong." Just when it seems things are going great, life will through you a curve ball. An expensive medical bill, car repairs, or an unexpected child on the way; these are all very common occurences that can lead to upping your worry.
Now, now let's review some simple ways to increase your peace of mind and get on the path to financial success.
Save For Emergencies
The easiest way to alleviate some anxiety related to money is to save for those emergencies. Setting up an emergency fund is like putting up a sandbag wall between you and the impending flood. It might not ALWAYS save you, but it can definitely help in a ton of situation. The most important thing is the peace of mind you will have with that extra cash on hand to help out in a tight spot.
How Much Should I Save? I recommend starting with an emergency fund of at least $1000. Many "emergencies" we have are usually around this amount or less (a sale at the department store is not an emergency). Saving of about $3000 would really be ideal. This will cover most auto repairs and health insurance deductibles that come up in life. The emergency fund is also important, because it will also you to pay cash and not having to go further into debt (another major financial stressor).
How do you save up an emergency fund? If you are unable to save this amount while making a decent living, you probably need to reevaluate your budget. Chances are some frivolities are getting a big chunk of the pie... However, what do you do if you are making a below average salary? You may need to get creative to get your emergency fund saved up. The simplest thing to do would be to take a part-time job until you have reached your savings goal.
Get Debt Free
As discussed earlier, debt is a major life stressor. So why not try to eliminate it completely? Debt-free living has become increasingly popular these days. People are discovering the power of unlocking their biggest money-making attribute....their INCOME! From personal experience, getting debt-free is an amazing feeling. When your money is not going to someone else every month, suddenly you find opportunities that you never knew existed before hand.
How do you get debt free? I don't want to just rehash what we discussed earlier about saving for an emergency fund, but remember these are also excellent ways to help pay off your loans and credit cards. Your very first step in this process is to STOP buying things on credit. When you find yourself in a hole, stop digging! Getting debt free is hard. Your friends and family are going to think you are weird, and you will second guess yourself along the way. Just buckle down and get all those debts knocked out one by one. You will build momentum as you go! This step is entirely possible, and people all over are getting it done!
Banish Your Financial Worries
Hopefully, you have learned some useful tips to try out here. Save an emergency fund and get debt free. The sense of freedom you have will truly be amazing guys. I wish you the best in your financial management endeavors and many stress free years!