Only 3 out of 10 Americans think that they are financially secure not to be worried about money. Hence, 7 out of 10 Americans have reasons to be worried about money at a time when wages are not growing to meet the rising cost of living. If you are reading this piece, chances are that you have slight fears about your financial security – in fact, it is quite possible that you are battling with sleepless nights because of money worries.
However, worrying about money won’t do you any good. In the contrary, worrying about money could hurt your relationships, destroy your health, and make it practically hard to fix your financial problems. This article seeks to give you three practical tips that can end your financial worries.
1. Build an Emergency Savings Fund
The chief reason people worry about money is the sense of vulnerability they feel from knowing that they don’t have a financial cushion to cover emergency expenses. You probably have an insurance policy to cover health issues or auto accidents.
However, your insurance might not cover some health conditions, a failed transmission, or a sudden breakdown in the HVAC system in your home. Knowing that you don’t have the money to cover such unexpected expenses could be an ‘unknown’ cause of financial worries.
The best time to plant a tree was twenty years ago, and the next best time is TODAY. If you don’t have an emergency savings plan, it’s high time you started putting money aside to cover such unexpected expenses. You should also be disciplined enough to apply “free money” such as gifts, bonuses, or tax returns into your emergency fund.
2. Deal with Debt Before it Deals With You
There’s nothing inherently wrong with credit and you could find it hard to cross some of life’s major milestones if you have not built up a credit history. However, credit when not properly managed could become a trap that ensnares you into debt. Hence, if you already have a debt burden, you won’t stop worrying about money until you have fixed the debt.
Your key to debt freedom: The Total Money Makeover: Classic Edition: A Proven Plan for Financial Fitness
The best way to deal with debt is to end your denial and find out how much money you really owe. Knowing your debt burden could make it easier for you to create an effective plan to repay your debt. For instance, you may want to start dealing with your debt by getting rid of the debts with the lowest balance or the debts with the highest interest.
Do not hesitate to ask for help if your debt burden is too much and you don’t see yourself getting out of debt realistically. You may want to consider getting assistance with debt consolidation so that you’ll find it much easier to manage your debt profile.
Take Control of Your Life, Starting with Your Finances
Many people often feel helpless, hopeless, and powerless because they don’t have much say on the direction of their lives. For instance, your employer often determines how much your time is worth, they determine when you should get a raise, and the government determines how much you get to keep out of your earnings.
However, simple actions such as creating a budget (and sticking with it) can put your in control of your finances. A budget helps make conscious financial decisions to allocate income toward expenses along a scale of preference. Hence, you’ll be able to cover your financial bases and you’ll have fewer reasons to worry if the cash in the bank will be enough to tide you over until the next paycheck arrives.
Simplifying your finances is another smart way to take control of your life. You may want to consider automated savings to ensure that you are paying yourself first. You can also automate the payment of your bills and install mobile apps that helps you track your expenses.