Many people feel the burden of financial anxiety every day.Whether it is the stress of managing a large debt load, the insecurity of a small pension or living paycheck to paycheck or the fear of being unprepared to manage the unknown, financial anxiety can wreak havoc on your life.
But there are methods for managing your financial situation that can help you lower the amount of anxiety you feel on a daily basis.To help get you started, here are some tips to improve your situation and allow your anxious feelings to dissipate.
Review Your Financial Situation with a Free Financial Counselor
Whether you choose to work with a finance professional or a mentor from your local community, finding someone you trust to help you review your current situation can be an important first step to finding peace.First, they will serve as a fresh set of eyes regarding your situation, and won’t carry any of the emotional baggage you may hold.Then, they can help you create a plan to get your financial house in order, allowing you to breathe a bit easier.
They are great at identifying general savings and additional services to help relieve financial pressures such as; different government benefits and subsidies, ssi assistance and even social security loan schemes along with discounted services provided by utility companies and local businesses.
Set a Budget
Next, you need to set a budget.This involves having a thorough understanding of your income as well as your expenses and general spending habits.This document will serve as a framework to guide how you manage your money and can help eliminate some of the guesswork that may be guiding your actions today.Also, if adding to your savings and paying off debt are part of your larger goal, a budget can help you visualize how to get there.
If you are debating whether you need to save or eliminate debt, you should always get an emergency fund in order before you focus on debt.This savings helps ensure that, should an emergency arise, you don’t have to take on more debt to manage it. So, start reducing your anxiety by getting at least $1,000 in the bank.Then, and only then, should you consider switching over to heavy debt repayment mode to get your personal finance house in order.
Pay Off Debt
Once you have some emergency savings, now is the time to work on paying off debt.If you want to get the most bang for your buck, then you need to start with the debt with the highest interest rate. Simply make the minimum payment on all other debts except the one with the highest rate, then put every spare dime towards the high-interest debt. Once that one is paid off, focus on the next high-interest debt. Keep following that pattern until everything is paid off.
Add More Savings
Now that you’ve conquered your debt, it is time to go back to saving. In the end, you want to increase your savings until you have at least three months of expenses set aside. Then, you will be prepared to manage most emergencies with relative ease, which should eliminate most, if not all, of your financial anxiety.
After that, simply direct your money into other beneficial areas such as retirement, college savings, other investments, and additional savings. Then, you should be able to rest soundly knowing you have your financial needs covered.