Are Money Worries Affecting Your Health? 5 Steps to Take Control This Year
If money is constantly stressing you out, you have more than the balance in your bank account to think about. Constant worry about your financial situation could lead to stress-related illnesses such as ulcers, migraines, back pain, anxiety, and depression. It can also strain relationships and make you feel like your entire life is out of control.
Here are steps you can take in 2015 to get your debt and finances in shape. Taking control of your financial stress will help you more fully enjoy what you have and could keep you healthier as an added bonus!
- Find out where your money goes. You get paid and it seems like the money just disappears. A great first step in getting financially healthy is to understand where your money goes. There are great budgeting and tracking apps to help you do this, such as Mint, DailyCost, and Dollarbird.
- Cut back where it makes sense. Once you can see exactly what you’re spending money on, you can likely identify areas where you can cut back. Are there any monthly fees being automatically deducted from your account that you no longer use the services for? Do impulse purchases add up to a lot of money being spent? Identify your spending leaks, so to speak, and work to reduce them, item by item.
- Make a budget and debt reduction plan. Write down your monthly after-tax income. Next, make a list of all your fixed expenses, such as utilities, car payments, rent or mortgage payments, etc. Are all of the fixed expenses necessary?Are there any payments you could negotiate on and pay a smaller monthly amount? Make some tough choices to ensure that your income is greater than your fixed expenses. Use the leftover money to start saving (see below) or pay off existing debts. Financial experts sometimes advise starting with the smallest debt you have. Once that’s paid off, the monthly amount you were paying can then be put toward your next highest debt. Getting debts paid down and off is rewarding and could help you stick to a firm budget.
- Save for now. Having money in your savings account can be an incredible stress buster. Knowing you have emergency cash for the unexpected brings peace of mind, not to mention the ability to handle unexpected car and home repairs or the loss of an income source. Aim to save enough to get you through three to six months of unemployment. This sounds like a lot and it’s not something you’ll likely be able to put aside overnight. Still, small and steady progress toward this bigger goal is worth it.
- Save for later. Once you’re feeling more confident about your financial picture, think long term. The younger you are, the more time is on your side when it comes to saving for retirement. If your employer offers a 401K with a matching contribution, you should be putting in at least that percentage to get the match – it’s free money. If your employer doesn’t offer retirement savings, you can open up a traditional or Roth IRA to start socking funds away for your future.
What are your money goals for the year? What helps you stay on track with spending? Tell us in the comments.
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