If financial stress is leading to sleepless nights, relationship challenges, chronic anxiety and health issues, it is time for change. Begin to break the cycle of financial stress by building financial wellness.
1. Create a Clear Financial Picture
Awareness is the first step to positive financial change. Before creating a budget or goals, take time to review current income, expenses and assets. Beyond standard bills and payments, take a look at major annual expenses (e.g. property taxes, registration fees, special occasions, travel, membership fees, and the inevitable unexpected expenses). This insight is crucial to making informed financial decisions for the future.
2. Write Down Financial Goals
Many people have similar goals: financial independence, a sense of financial security, the ability to provide for a family, and opportunities to enjoy life without being chronically burdened by financial stress. Understanding the underlying intentions and values driving your financial vision will help align decisions and actions to positive outcomes.
3. Get Real About Financial Obstacles
With a clear financial picture and vision for the future, it is easier to get real about what needs to change in order to reach those goals. Take a look at immediate obstacles (e.g. paying off student loans, increasing income, building an emergency fund), as well as emotional obstacles or behaviors (e.g. denial, avoidance, fear, mindless spending, retail therapy) that may be getting in the way of reaching financial goals.
4. Stick to Savings Goals
With outgoing expenses every month, it’s easy to think that there’s just no wiggle room to save. But that kind of thinking could back anyone into a corner when emergencies arise. Start by getting in the habit of saving 10% of every paycheck. To make it even easier, set up automatic transfers to a savings account, and before too long, there will be a nest egg saved up for what matters most.
5. Make Financial Health a Personal Priority
Even though it is often daunting, putting in the effort to build financial awareness and healthy habits will go a long way toward reducing stress and improving all areas of life. Before financial stress gets out of control, be brave and reach out for help.