Financial stress can take a toll on your mental health, whether you’re trying to pay off debt or increase your savings. Building up financial stability takes time but can make a big difference in your life, even if you start small.
1. Build an emergency fund
An emergency fund is money you’ve saved up that can help to cover expenses in the event of an unforeseen financial emergency. You can use this fund as a safety net to cover costs like medical bills or car repairs. The cash you save can also reduce your stress when you run into any financial struggles and need money.
Your emergency fund should cover three to six months of living expenses, but any amount that you can save up helps. Although building this fund might seem like a daunting task, starting small and contributing a few dollars per week to your savings account can really benefit you in the long run.
2. Start paying off your debt
Having debt is a big burden to carry and can have a serious effect on your financial and mental health. By making it a priority to pay off what you owe, you will avoid paying more in interest charges and going deeper in debt. If you have multiple credit cards, consolidating your debt into one low-interest card can make it easier to keep track of payments and save you money.
It can be hard to reduce your debt while paying for other expenses, so consider getting a personal loan, line of credit or other options to have extra cash available — just be sure any new loans are lower-interest than your current debts.
3. Automate everything
A helpful way to start building up savings with minimal stress is to automate the money you save every week, month or paycheck. It can be tough to remember to put away extra cash, so choosing an amount that works for you and automating your savings can help you stick to your plan more easily.
You can also automate your payments to stay on top of your bills and avoid the risk of forgetting to pay them. This is a great way to take away the pressure of remembering when payments are due, and to save money by avoiding late fees.
4. Think long term
You may have some long-term future goals for yourself and your family, such as buying a house, saving up for retirement or helping to pay for your children’s education. Decide on what financial goals you want to prioritize, and make a long-term plan for how to work toward these goals. If you build out a savings plan and start saving today, you can start saving gradually, and let interest work in your favor. You might not be able to buy a house today, but making a plan for the future is a realistic way to start working toward your goal now.
Notice: Information provided in this article is for informational purposes only. Consult your attorney or financial advisor about your financial circumstances.
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Original Source: Four Tips for Reducing Financial Stress