Money is one of the leading causes of stress and anxiety for adults. Whether you're spending too much, not earning enough, or simply worrying about whether you're managing your finances correctly, all of these things can impact your mental health if you don't address them. Fortunately, using the right tips can help you significantly reduce your financial stress.
Sometimes reducing your financial stress is about learning smarter saving habits so you always have a little extra money. Sometimes it's a matter of learning how to earn more without overworking yourself. Sometimes it's as simple as changing the way you think about money. Here are eight of the most effective ways to reduce financial stress in your daily life.
1. Start Saving Now
Saving more money is always a good way to reduce your financial stress. It can stop you from spending frivolously and also gives you the peace of mind that you always have emergency savings if you need them. With that said, you need to start saving money as soon as possible.
Creating a savings account and transferring money into it regularly will help. Even if you already have one, you should be maximizing your savings. For instance, you might want to contribute 75% of whatever's left from your paycheck after deducting bills and expenses. You might even want to save more than that.
2. Stick To A Weekly Budget
Budgeting is another good way to ensure you don't end up spending more than you need to. It can help maximize your savings and even help you learn better spending habits so you don't feel stressed about how much money you waste.
Sticking to a daily budget can be stressful and a monthly budget can be hard to stick to, so maintaining a weekly budget is usually best for saving money. You might want to use budgeting apps like Mint or Goodbudget to make this easier.
3. Tackle Your Debt Strategically
Debt is one of the biggest contributors to financial stress - especially if you find yourself in a situation where you have mountains of debt that will take years to pay back. However, instead of paying the bare minimum or, even worse, ignoring it, taking steps to tackle your debt can work wonders for your mental health and your bank balance.
You don't need to clear everything at once. Instead, try putting extra money towards paying your smallest debt off first. Even getting rid of one of your debts can feel like a huge weight off your shoulders, then you can start focusing on clearing the next smallest. Alternatively, you might want to start by tackling the debt with the highest interest rate to avoid paying more.
4. Second Guess Every Purchase
Sometimes overspending simply comes down to being too spontaneous with your purchases. Seeing something you like and buying it on a whim can feel good at the time, but doing this too often can lead to an unhealthy bank balance and an influx of financial stress.
Instead, think twice about everything you buy. If you're about to spend $5 at a coffee shop, consider whether it's worth making it at home instead. If you're about to spend $50 on a new shirt, put it back and consider whether it's worth it. If you're planning to blow $100 on a night out, consider whether it'd be better to have a cheap indoor gathering with friends. Soon enough, you'll find yourself making wiser spending decisions and saving a lot more money.
5. Reduce Your Utility Bills
Even if you reduce how much you spend each month, you'll still have a few essential expenses such as your monthly utility bills. This can be a huge source of financial stress, but while you can't avoid these costs, you can take a few steps to make them significantly cheaper.
Start by comparing prices for utility providers online and making sure you get the most cost-efficient option for electricity, water, and even your phone bill. Next, make sure your home is energy-efficient and avoid overusing your water or electricity. You might even want to reduce your internet bill by getting an unlimited phone plan and using your smartphone as a WiFi hotspot.
6. Find A Profitable Side Hustle
Naturally, one of the best ways to eliminate financial stress is to make more money. But while you might not have time to take on a second job, you can easily make extra money in your spare time. For instance, you might want to become an Uber driver, deliver food, or sell things on eBay.
Some people even turn their hobbies into side hustles. If you're good at arts and crafts, you can sell your creations on Etsy. If you're skilled at editing videos, you could become a video editor for businesses and YouTubers. Not only can these ideas be profitable, but they'll also help keep you occupied and take your mind off any financial burdens.
7. Avoid Unnecessary Subscriptions
One type of expense that's easy to ignore is monthly subscription fees for things like streaming services, websites, and gym memberships. While having one or two of these might not be so bad, many people end up with multiple subscriptions that cost them tens or hundreds of extra dollars each month.
As such, it's worth checking your subscriptions and cutting out what you don't need. If you already have Netflix, paying for Hulu and Disney Plus might not be worth it. If you barely use the gym, cancel your membership and exercise at home instead. If you forgot to unsubscribe to any digital services, do it as soon as possible. That way, you'll have fewer costs to worry about and more money to put in your savings account.
8. Downsize Your Living Situation
In most cases, your rent or mortgage payments will be the biggest costs you have to pay each month. These can cause a lot of financial stress - especially if you're overpaying for your home. If these costs become a burden, you might want to consider downsizing your living situation to make it more affordable.
If you're paying for an apartment by yourself, consider moving in with friends and splitting the costs of rent and utilities. If you're struggling, you could even move back home until you get back on your feet. If you've bought a home, downsizing isn't always the best option, but moving somewhere cheaper and remortgaging can help if you're in a particularly tough financial situation.
Stressing about money can drastically reduce your quality of life, so it's important to take steps to put yourself in a healthy financial situation. These tips can help you spend less, save more, reduce your debt, and achieve more financial success in the long run.