Let’s face it: money can be a major source of stress. Whether you’re feeling the pressure because you struggle to pay your bills, or just aren’t reaching your financial goals as quickly as you’d like, your checking account can sometimes make your pulse beat a little faster and moisten your brow with sweat.
But inevitably, money — and managing it — are a big part of life as an adult. The great news is that there are a number of steps you can take to take control of your financial situation so you can stop having mini panic attacks every time you swipe your debit card.
Here are five things you can do right now to help lessen your financial stress and make strides towards greater peace with your pocketbook.
Find — and then crunch — some numbers
First things first: figure out what you have to work with. Identify and write down the balances of every savings and checking account you possess, and list all of your monthly expenses alongside your monthly income. List your debts smallest to largest, including student loans, car notes, credit cards, personal loans, medical bills, etc.
It’s hard to feel in control when you don’t know what you have to work with, so seeking out and physically writing down the important numbers will better inform you of the reality of your situation.
Identify why you’re stressed
Given the numbers you’ve found and recorded, determine why, exactly, you’re stressed. Is your credit card balance freaking you out? Are you overdrawing your checking account every month? Are unexpected expenses catching you off guard and sending you into the red at the end of each month? Are your student loan payments keeping you from saving more each month?
Be specific about what is bothering you the most about your financial situation so you can create a precise plan to improve your circumstances.
Create a budget
Many financial problems could be solved if we just committed to living on less than we make every month. So, create a budget to follow. Be sure that your expenses don’t amount to more than you’re bringing home in income.
There are plenty of budgeting apps out there (I particularly like EveryDollar), or you can do it the old-fashioned way and create a spreadsheet. Give your money a precise job every month, and if you’re having trouble living within your means, get serious about cutting out extras that might make it difficult to meet your monthly obligations.
Make a plan
Consider your goals and then make a plan so that the “you” of the future isn’t stressed about money, but rather is in control. You may decide to get serious about tackling your debt, or maybe you are panicked about how little savings you have — so you could prioritize saving an emergency fund to help you through unexpected expenses. Set a few goals for your finances. With some hard work and self-denial, you’ll notice your bank account growing fatter as your stress growing thinner.
Get to work and keep your goals in sight
It’s important to choose one priority at a time, because it can be difficult (and discouraging) to try to multitask with money. For example, if you commit to paying off a credit card, you’ll make progress much faster if you’re solely focused on debt reduction, rather than trying to pay off debt, save, and invest all at once. This is why Dave Ramsey’s “Baby Steps” follow the order of paying off debt, then saving an emergency fund, and then beginning to invest once you have appreciable savings and are debt-free.
So be specific and incremental about your goals and devote all of your intensity and focus to one goal at a time. You’ll be encouraged by the results, and that encouragement will help you power through the difficult days when you really want to cast your budget to the wind and splurge. Keep your financial goals in sight and, with a concrete plan in place, you’ll be well on your way toward stress-free finances!