If you feel like you spend a lot of time worrying about money, then you are certainly not alone.
Financial stress is a significant problem for many people all over the world and can become a leading cause of unhappiness in our lives.
Everyone is in a slightly different financial situation, so it is important for you to take a closer look at your specific financial worries. So in this article, we’ll provide a 7-step process to stop worrying about money.
Let’s get to it…
7 Steps to Stop Worrying About Money
No matter why you feel like you are worrying about money, there are several steps you can follow to get your financial habits and mindset under control. These steps include:
1. Give Yourself a Break
The first thing you need to do is show yourself a bit of compassion.
A lot of people are unnecessarily hard on themselves when they are trying to figure out ways to address financial concerns. You may feel like you have gotten yourself into your own mess, which could lead to a dangerous cycle of self-deprecating behavior.
Instead of focusing on everything you did wrong, it is important to take a deep breath. Get yourself in the right frame of mind, and tell yourself that this is something that you can fix. If you can stop judging yourself, you will have an easier time making the right decisions.
After you have taken a deep breath and given yourself some perspective, it is time to think carefully about why you have ended up in a bad financial situation.
For example, you may have simply run into some bad luck with medical bills or a serious car accident. Or, you may have spending issues that you need to get under control.
No matter what the issue might be, you will not be able to fix it if you do not get yourself in the right frame of mind. That is why you need to show yourself some compassion before you address your financial issues.
Once you have centered yourself, it is time to move on to making a strict budget that you can follow in the future.
2. Make a Budget You Can Actually Follow
It is going to be difficult for you to solve your financial worries if you are not able to control your spending. That is why it is important to make a budget.
There are several steps you should follow in order to successfully make a budget. These include:
Put Your Finances on the Table
Do not simply pull them up on a computer screen. You will not be able to see everything at the same time. Instead, you have to print everything out. Print out a document if there is money entering or leaving that account. Lay it on the table.
Calculate Your Income
Next, you need to calculate your income. Common sources of income include your job, dividends from stock holdings, and possible side hustle income you might have.
Analyze Your Expenses
After, you need to analyze your outflow. Housing is probably your biggest expense, so take a look at your mortgage or rent payment. Then, take a look at return expenses. This could include utility bills, car payments, and insurance bills.
In addition, you should take a look at other sources of debt you might have. This could include a student loan or a personal loan. Then, take a look at personal spending. Do not forget your debit and credit card statements. Where is your money going?
Calculate the Balance
Finally, you need to calculate the balance. Take a look at all of your recurring expenses, with your expenses that you do not control. This includes your rent, your mortgage, utility bills, debt payments, and insurance. Subtract this from your monthly income.
The remaining balance is the amount of money you have leftover to spend. Remember that you also need to save for retirement, so you cannot necessarily spend everything that is left over.
If your recurring expenses are already more than your monthly income, it is time to take a look at other options.
For example, you may need to reduce your housing payments by moving into something that is more affordable. Or, you might need to reach out to people who are in control of your debt to see if you can change your payment plan.
If your recurring expenses are less than your monthly income, you may have a spending issue you need to address. Take a look at your discretionary spending and see if there is something you can reduce. If you need help creating a budget, you may want to use this helpful resource.
3. Check the Credit Cards Closely
There are a lot of people who have trouble managing a credit card. A credit card can be helpful in certain situations because it provides you rewards for your spending.
For example, if you are someone who likes to order stuff on Amazon, there are credit cards that can give you rewards that can convert into Amazon dollars.
In addition, properly managing a credit card is a great way for you to build credit. A higher credit score can translate to lower interest rates if you apply for a loan for a house, a car, or higher education. Learn more about raising your credit score.
At the same time, there is a serious danger regarding credit cards. It is very easy for you to spend too much money on a credit card. Even though it is nice because you do not have to pay the credit card off immediately, the high interest rates on credit cards can lead to a significant amount of debt.
There are lots of people in the United States who are carrying massive amounts of credit card debt that are doing serious harm to their financial futures.
Therefore, from time to time, it is important to take a close look at your credit cards. Ideally, you should pay the balance in full every month.
If you feel like you are going to have trouble controlling your spending, then you may want to reduce the limit on your credit card. That way, you can only put so much on it. Or, you may want to get rid of credit cards entirely.
One of the reasons people still struggle with paying the bills even with an increases income is lifestyle creep. Take a few minutes to watch this video so you can learn to avoid this trap:
4. Talk To a Mental Health Professional
Financial stress can be significant. There are lots of people who have trouble managing their stress, which is why you should feel comfortable reaching out to mental health professionals for monetary issues.
Because so many people are dealing with financial stress, this is an area that mental health professionals are able to address. They have a lot of experience helping people manage stress and anxiety surrounding financial issues.
Importantly, a mental health professional is not someone who is going to help you make a budget, balance a checkbook, or analyze your spending habits. Instead, a mental health professional is someone who can help you deal with anxiety, depression, and stress surrounding financial issues.
Even though it may not seem like it, the two go hand-in-hand. If you are able to address your financial issues, you may be able to better manage your mental health.
Furthermore, if you are able to control your stress and anxiety with the help of a mental health professional, you may have an easier time looking at your financial situation with a greater degree of clarity.
If you want to get a handle on your financial situation, it is critical to manage your mental health appropriately. That way, you will be in the proper frame of mind to make the right financial moves for your future.
5. Set Financial Goals for Yourself
If you want to motivate yourself to stick to your new budget, then you need to set appropriate financial goals for yourself. When you are setting goals for yourself, it is important to follow the SMART acronym. This means setting goals that are:
You need to make sure you can clearly define what these girls are. That way, you will be able to hold yourself accountable as the plan on full. There are a few types of goals you may want to consider setting using this format. They include:
Notice that all of these goals are very specific. They have a specific number you are trying to meet, and they have a time frame in which you are supposed to meet that goal.
This will make it easier for you to hold yourself accountable as you try to develop new financial spending habits.
6. Focus Your Attention on What You Know and Can Control
One of the biggest reasons why people shut down and give up when they are trying to improve their financial spending habits is that they are trying to focus on things they cannot control.
For example, if you are consistently worried that a massive medical bill is going to lead to financial difficulties, you are going to have a hard time seeing the big picture.
That is why you need to focus on what you know. The financial factors that you know include:
Then, you need to focus on what you can control. You control how much money is leaving your accounts. Even though you need to meet the minimum payments for certain bills, such as housing, you are in control of your discretionary spending. That is where you need to focus your attention.
It may be helpful to write all of this information down on a piece of paper. Writing this information down is a great way for you to organize your thoughts. This may make it easier for you to make financial decisions in the future.
7. Start Saving for Retirement
Finally, one of the most important steps in easing financial worries and stress is to start saving money for retirement.
If you can start saving money for retirement, you are going to feel much better about your financial future because you know you have a plan in place for your golden years. Even though retirement might be decades in the future, it is still important for securing your long-term financial security.
You do not have to start saving a bunch of money for a time at all at once. It is perfectly fine to start low and go slow.
For example, you might want to set a goal to contribute $50 per month to retirement this year. Then, as you get better control over your spending, you may be able to increase this number to $100 per month next year. As your job gets going, you may be able to contribute more money as well.
Remember that you may also have access to a 401k through your work. You should make sure you are maximizing your employer matches on your 401k. That way, you will have extra money pulling into your retirement account as well.
Knowing that you have a security net in place in the form of a retirement account can go a long way toward helping you feel better about your specific financial situation.
Finally, if you really want to learn more about how to say for retirement, it may be helpful to reach out to a trained financial professional who can help you.
There are professionals who have been specifically trained to help you save money for retirement. You may want to learn more about working with a retirement advisor by checking out this helpful resource.
Final Thoughts on Worrying About Money
These are just a few of the most important steps you should follow to stop worrying about money.
Everyone has a slightly different financial situation, and just about everyone has financial worries from time to time. It is important for you to show yourself some compassion before you start the process of addressing some of your financial concerns.
Therefore, you need to take a closer look at these steps a customized and to meet your needs.
Furthermore, You should also take a closer look at this article to learn more about why money can’t buy happiness. If you realize that money is not the key to happiness, you might be able to address your financial concerns with a new perspective.
Finally, if you want to increase your happiness and life satisfaction, then watch this free video that details the 7-minute habit for planning your day to focus on what's important.
