Avoiding financial stress
Let’s face it, times like these financial pressure on every one is high, whether you are enjoying a great 6 figure salary or struggling to make those bill payments. Without knowing or realizing, these financial situations can add a great deal of stress to you, both mentally and physically. So here are few great tips to help you sort your budget in order, and few to help you be stress free.
– See where you are spending the most and decide if that is absolutely required. Websites like mint.com offer free financial tools, budgeting software and trackers where you can see where your money is being spent. You can also chose to get text alerts if you spend over your preset limits. This way you can cut down on the $5 café mocha or the fourth $8 long island iced tea. Remember small things add up, and which is why you would need to see where you spend most of your money over a long duration.
– Sign up for your company’s 401(k) and other retirement plans. Longer life expectancies and higher inflation rates make it absolutely necessary to start saving early. A 401(k) account is great as most employers match contributions, thereby instantly doubling your money and this amount being invested will reap you bigger rewards when you are old. Even 100-200$ a month can really add up. An estimate showed that if you put 6% of your income when you are 25 years old, you can walk away with a million dollars when you are 60.
– If you have huge debts, then call a debt consolidator who can reduce your debt and make it a lower monthly payment for you.
– Live within your means, its known that the most financially stressed people are those who are living beyond their means, that means if your salary doesn’t support a 500k house and a 50k car, then don’t buy it. A 200k house and a simple car to get you around stress free is so much more better. Scale down, many local websites let you swap your houses with others looking to upgrade. Doing this could reduce your mortgage payments.
– Save up at least 6 months expenses in a high interest paying savings account. An emergency fund is always good for such times where each day you hear about layoffs. If you aren’t living paycheck to paycheck, then you will be less stressed about all those bills.
– Analyze your bills, see where you can save, simple things like removing HD from your cable, or choosing a lower speed internet connection can help. Here are a few things that helped me cut down on my monthly bills
o Switched to a lower cost phone plan
o Disconnected my landline as my cell sufficed.
o Removed HD and unnecessary channels on my cable.
o Shopped at grocery stores giving my fuel discounts.
o Used credit card reward points for paying for a meal or two to restaurants.
o Changed my internet from a 16mbps plan to a 4mbps, the cost is almost half while I don’t even notice the speed difference.
o Carry lunch to office, at least once more than you do now.
o Switched insurance carriers to lower my rate.
These simple things, and much more can easily help you reduce your bills and though it might just add up to $100, remember, that 100$ when put consistently into a savings plan can become a million dollars when you retire.
All these tips being said, the mail point is this, money comes and goes, we all live our life just once, we have to enjoy it. Worrying about money, or how your stocks aren’t doing well does not help you. We have to plan better, stay on top of our finances and most importantly, live within our means. A sound financial plan is good, a one you can follow without cutting too many corners is great. So use the tools available, and set out a simple plan, stick to it and see the stress disappear.