Does the thought of money give you a headache? If so, you’re not alone. A recent CNBC survey found that 70% of Americans are stressing over finances and over half of them said their burden has only increased since before the pandemic.
Financial anxiety is real, and it can even damage your health and well-being in some cases. But it doesn’t have to be this way. Here are five ways you can start feeling more confident about money.
1. Know Your Finances
Do you know how much is currently in your bank account? Are you aware of the balances on your credit cards? If not, then swiping your card at a restaurant or grocery store can be a nerve-racking experience.
To begin reducing some of that money-related anxiety, start tracking your financial information more closely. Check your bank account balance regularly; ideally, you should have an account you can monitor online or through a smartphone app.
You should also know your credit card balances and check your account at least once a week. Having this information easily accessible can enable you to keep close tabs on your accounts and help reduce some of the angst that can come with making daily financial decisions.
2. Create a Budget
You can also lower your financial stress by setting a budget. Unfortunately, many people eschew household budgets. In a recent survey, Credit.com found that almost 30% of Americans don’t believe they need one.
If you are managing personal finances by the seat of your pants, you are more likely to feel out of sorts. Budgeting can provide a better idea of how much money you have coming in each month, and approximately how much of it must be used to pay expenses. This can help take the guesswork out of each financial decision.
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3. Set Financial Goals
Another reason you may feel overwhelmed is because you can’t figure out how to achieve goals with your income and financial responsibilities.
One way to help reduce this sort of uneasiness is to set clear financial goals. What do you want to accomplish in the next six months, year, or five years? Are you planning on buying a new car or purchasing a home? Do you want to go back to school to get an advanced degree?
If so, you should estimate how much money is needed to achieve these things. You should also determine if you need additional income to reach your objectives. If so, you can pick up more hours in your current job, or adopt a side hustle such as driving for a rideshare app like Lyft or Uber.
In any case, writing down what you want and creating a strategy to achieve it should help you feel more grounded.
4. Plan for Contingencies
What would happen if your car suddenly needed to be repaired, or you lost your job and were unemployed for several weeks? Do you have the money on hand to get through an unexpected setback?
Bankrate’s Annual Emergency Funds Report found that 57% of Americans are unable to cover a $1,000 emergency with their savings.
The inability to deal with a sudden financial issue no doubt contributes to high levels of anxiety. Therefore, it is important to start planning for contingencies as soon as possible to prevent future worst-case scenarios.
For example, ensure you have enough money on hand to cover emergency home or automobile repairs. You should also consider how much is required to cover basic expenses for a month or so if you were to be laid off or furloughed. Creating an emergency fund is a smart way to plan for whatever lies ahead.
In addition, you should evaluate if you have enough insurance to cover any medical expenses or damage to your home or property.
5. Get Help
If money issues are making your stomach turn, you should seek out trusted experts to provide you with the advice and assistance you need.
Credit counselors, for example, can help you determine the best ways to tackle problems caused by excessive debt. Additionally, a good accountant can assist you with budgeting, and help you handle federal and state tax issues. Finally, insurance experts can determine the best ways to mitigate financial risks associated with your business, property, and health.
Obtaining help from a trusted financial advisor can help reduce your financial uncertainty and lower your anxiety in the process.
By planning ahead, following a plan, and taking the suggestions above, you can feel more comfortable – and even confident – when it comes to dealing with money.