Many people erroneously believe that if they simply had more money, all their financial anxiety would disappear and they could finally be happy. In some cases, earning more is the solution to improving your financial health or dealing with a hardship. However, what’s surprising is that you can feel stress no matter how much you make.
While money stress may never leave entirely, reducing it as much as possible can improve your relationships, health and overall sense of well-being. Bankruptcy lawyers in Scottsdale recommend using the following five tips to quit stressing.
Stay up-to-date with your finances
If you put off opening bills or avoid glancing at financial accounts, not staying up-to-date with your money situation can only make matters worse. You should address mail right away and set a payment date for bills, so you don’t miss deadlines.
If you have trouble paying bills, talk to your creditors. Requesting a deferment of payments or a new payment plan could be the key to having more breathing room.
Create side sources of income
It’s difficult to stop stressing about your finances when you’re living paycheck-to-paycheck. Knowing that you’re going backward or treading water can cause worry and financial stress.
To break the cycle, brainstorm ways to earn extra income, such as looking for a higher paying job, getting a second job, starting your own side gig. Consider ways to leverage skills you already use in your job to create a profitable project or side business. You may have abilities that people would pay for, such as teaching music or designing things.
Having multiple sources of income is like an insurance policy. Not only does it help you pay bills and eliminate debt faster, but it helps you maintain security if one stream of income dries up.
Radically cut your expenses
If you’re spending too much due to hardship or overspending, you’ve likely seen savings diminish and debt balances increase (alongside your anxiety level).
Consider radically cutting large expenses, such as housing. A good rule of thumb is to never spend more than 25 percent of your gross income on a mortgage or rent payment. You can consider downsizing or relocate to a less expensive neighborhood or town.
If debt is a significant stressor, a general guideline is to keep the total of all your monthly debt obligations below 40 percent of your gross monthly income. If you don’t have extra cash to reduce debt balances faster, consider refinancing or changing payment plans on student loans to make debt more manageable.