Tuesday, August 5, 2008

How to Reduce Financial Stress

Nearly half of all working Americans have financial problems. It’s no wonder that one of the leading causes of stress is money. Financial stress is a major contributor to many health issues. Listed below are some of the negative mental, physical, and emotional effects financial stress has on us.

1. Bad habits — When we are stressed, we tend to drink more alcohol, smoke, and eat more, all of which create more stress.
2. Healthcare — With a shortage of money, typically the issue with financial stress, we neglect our health. When there is no money for healthcare, problems are ignored and can become serious.
3. Losing sleep — Our minds don’t function well and our decision-making processes are altered when we are sleep deprived. Not being able to think straight causes more stress.
4. Emotional imbalance — Financial debt can lead to a variety of unhealthy emotions including anxiety, frustration, and depression.

It’s common for people to believe that if they earn and have more money, they will be happier. Having more money may trigger a temporary high and get us a few nifty new things, but people tend to adjust their lifestyles to the level of the added income. They may buy more things and possibly create more debt and greater stress.

It’s better to create goals to be smarter with the money you have. Your first goal should be to get yourself out of debt. There is true satisfaction in owning things free and clear. After you are debt-free, spend your money on things that will make you truly happy and decrease your financial stress. The following are ways to help you lower your debt, increase your happiness, and reduce stress.

*Look for the smallest ways to save money. Start by cutting out the lattes. Usually “coffee on the go” is over three dollars, so making your coffee at home can save you up to a thousand dollars a year.

*If you have a gym membership you use only once a month, drop it and start walking, jogging, or exercising at home. You can save five hundred dollars a year or more.

*Pack a lunch for work instead of eating out, and this alone could save you over two thousand dollars a year. Small expenses add up to thousands of dollars each year causing financial stress.

*Always spend smart — don’t shop just to shop. Ask yourself if you really need the item. Don’t impulse buy. Always give yourself a couple of days to think about a major purchase. Often we buy things and shortly thereafter realize it was something we didn’t really want or need.

*Use your money and stop the credit card madness. If you don’t have the money, don’t buy it. Be sure to never use money allocated for other bills for new purchases. If there’s something you really want to buy, save the money in advance, or try selling something you don’t use on eBay or at a yard sale.

*Implement a budget. Typically experts say you should set aside certain percentages of your income for specific expenses, such as 30 percent of your income for housing, 10 percent for automotive, etc. But we know that each person’s expenses may be different and probably vary from month to month. Implement a budget and reassess it every few months. Don’t include only your monthly rent, food, and gas. The best way to figure your “real” annual expenses into a monthly budget is to search back through your checkbook or bank statements and include the one-payment-a-year expenses, such as car insurance, registration fees, and property taxes. Without taking such expenses into account, your bank balance may show an excess of funds on any particular month. In reality, these funds may be needed to pay one of those one-payment-a-year expenses. If you spend that as “extra” money, you may find yourself stressed out when you fall short of money when an unexpected payment comes due. Add up all the yearly expenses and divide them into a twelve-month plan for a realistic monthly budget total. Then if one month shows you have extra money, realize that over the year that money is allocated for an upcoming expense.

Don’t just look at the big monthly expenses for your budget or for saving money. When we look at our monthly expenses we tend to ignore the small stuff because we see it as insignificant — a few dollars here, a few there. But those little ten- and twenty-dollar-a-month expenses add up over a year’s time. Figure those little expenses into your budget, or, better yet, get rid of them if possible and save that money to start planning for a stress-free retirement.

If your debt overwhelms you and you can’t seem to make your monthly payments, you should contact a debt consolidation company for assistance. There are many non-profit organizations that can help people reduce and consolidate debt.

Overall, the best way to avoid financial stress is to live within your means. Begin living within your means by changing your lifestyle. In addition, learn and practice stress-relieving exercises and incorporate them into your daily routine. To learn more ways of reducing financial burden and stress, visit http://astressfreelife.blogspot.com/

Carol Denbow is a three-time award winning author. Her third book, Stress Relief for the Working Stiff, How to Reverse the Embalming Effect is considered by experts to be the most comprehensive and useful stress relief book available today. Visit Carol’s website at http://www.BooksByDenbow.Weebly.com/stress-books.html to meet “Frank” the lovable “stressed out” character who represents all of us working stiffs!


debt consolidation said...

Before availing any debt consolidation service, make sure that you do first a comparison of different debt consolidation companies. This way you can able to see how competitive the one being offered to you. You can also see to it that you are getting the best one in the market.

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