Financial stress is a common problem many adults struggle with. Regardless of your income level, whether you own a home or rent, are fresh out of college or have years of experience in the field, stress over your finances can leave you struggling in all areas of your life.
Luckily, with a few simple strategies, and a little help from Credit Innovation, you can take back control of your finances. Keep reading to learn 7 ways to deal with financial stress.
1. Create a Budget—and Stick to It
Whether you’re financially comfortable but working towards a big goal or struggling in between paychecks, the best thing you can do is create a budget.
Creating a budget serves a number of important purposes. To start, it forces you to confront your current spending. Perhaps you’re signed up for several subscriptions, like streaming programs, music, and even apps, but don’t use them all regularly. Or maybe you’re spending more than you realized each month on coffee runs or fast food.
By creating a budget, you’ll hone in on where every dollar you’re earning is going.
Another function of a budget is that it gives you a better idea of where you have some wiggle room. Rather than spending the rest of your paycheck on a shopping trip, you’ll be able to see the number that’s left after your bills are paid, and rethink where it goes.
At Credit Innovation, we know that reaching your financial goals starts with a great budget. Our Cashflow Accelerator is designed to help you analyze your spending and income to create a budget that works.
Creating a budget won’t do you any good if you don’t follow it. Once you’ve decided how much you’ll spend on food, shopping, and other purchases, don’t budge. If you find that you have to spend more on something you can’t avoid, like necessary groceries, a sudden car repair, or extra gas to get to a work event, try to take that money from other categories, like entertainment, before you take it from your savings. While you certainly want to treat yourself from time to time, a budget can help you get real with your finances and start working towards your financial goals.
2. Start an Emergency Fund
If you suddenly found yourself facing a $1,000 emergency expense tomorrow, where would you get the money to cover it? If you would have to put that expense on a credit card, get a personal loan, or borrow from friends and family, you certainly aren’t alone.
Fewer than 4 out of every 10 Americans would be able to pay for an unexpected $1,000 expense in cash.
It’s tough to plan for the unexpected, especially if you’re living paycheck to paycheck. But putting aside even a small amount each month can go a long way towards setting yourself up for a stronger financial future.
You might find that the extra cash you need is being spent on a subscription that you don’t use frequently. Or maybe you could skip dining out once a week, and instead put the cash you would have spent into savings. Over time, that money will add up. And if disaster does strike, you’ll be better prepared to pay for it without upsetting your other financial goals.
3. Set Up Automatic Payments
One common financial mistake that many individuals struggle with is missing payments. Besides adding to your financial stress, missing a credit card payment or other bill can have a variety of other consequences. First, you’ll likely face a late fee. But if you forgo that payment for too long, your credit score may also take a hit.
Most credit card companies, utility companies, loan providers, and even apartment complexes offer the option for automatic payments. Setting these up on each of your accounts can help you to avoid missing payments and racking up late fees.
4. Turn On Account Alerts
In addition to setting up automatic payments, you might also consider setting up account alerts.
Account alerts on your checking account can help to relieve a variety of common stressors. Alerts can let you know when your checking account is below a certain threshold. This allows you to avoid the embarrassment and shock of swiping your card and finding it declined.
Many banks and credit unions also offer the option of setting up fraud alerts. According to the Federal Trade Commission, credit cards are the most common source of fraud reports, beating out debit cards, payments via apps, checks, and wire transfers. Having instant alerts to let you know when something is wrong can help to take one more worry off your mind. If you do become the victim of fraud, the instant alert can help you take action fast to minimize the effect.
5. Prioritize Your Spending
When you’re stressed about your finances, it’s easy to fall into the trap of feeling like every financial goal is out of reach. But prioritizing your spending and setting goals for yourself can help you stay positive and focused on following your budget.
After using Credit Innovation’s Cashflow Accelerator to analyze your budget and spending, take the time to think about what is really important to you, as well as what is attainable with your current income. If saving for a house feels too out of reach, it will be difficult to stay committed to your goal, and easy to give into smaller temptations. But saving for that emergency fund to help alleviate some stress may be easier to reach. From a small vacation to a new car to reaching a milestone in your savings account, set a goal that excites you to help you stay focused on your goal.
6. Celebrate Small Victories
During the long process of saving for a big financial goal, don’t forget to celebrate the smaller milestones. Whether you treat yourself to a special meal or maybe a new shirt or video game you’ve had your eye on, celebrating with a small splurge is a great way to stay motivated.
This can also help to shift your mindset about your money. Rather than seeing saving as a one-way street with no room for errors, you’ll see saving money and making smart financial decisions as something worthy of celebration. Making these small mindset shifts will go a long way towards helping you to stop stressing over your finances and start focusing on improving them instead.
7. Don’t Be Afraid to Get Help (And Put Credit Innovation’s Cashflow Accelerator to Work)
Whether you’re struggling with debt or stuck in a rut with a poor credit score, never be afraid to seek help. Professional credit repair or debt assistance, like those offered by Credit Innovation, can help you to learn new strategies to accelerate your progress. You’ll get advice on real changes that you can make today to change your financial future. With a real roadmap towards your goals, you’ll stress less over figuring out what moves to make next.
Dealing With Financial Stress
Financial stress can wreak havoc on all areas of your life. But whether you’re struggling with debt, a bad credit score, or a lack of savings, these tips can help you take back control and start making real progress towards your financial goals.
If you’re ready to make a real difference in your financial future, Credit Innovation is here to help! Start with our Cashflow Accelerator to learn how we can help you organize your budget and become debt-free fast!