5 Financial Tips that Will Reduce Your Stress Levels
Based on a 2021 study by Capital One CreditWise, up to 73% of Americans consider their personal finances as the number one source of stress. Considering the collective health of the American public, this statistic shows just how heavy a factor financial security is to people's lives.
If you are looking to improve your day-to-day stress levels and overall mood, working on your financial stability can result in dramatic positive changes that effectively address America's biggest concern. Here are five financial tips that can bring about incremental improvements in your financial well-being.
Stay on Top of Your Finances
Financial problems, in most cases, can be traced back to one fundamental root cause - you not having any clear connection between money coming in and going out. In fact, in a 2020 survey, only two-fifths of people interviewed said they set and follow a personal budget each month. Setting financial goals and a clear outline on how to accomplish said goals is important otherwise you won't know where best to put your efforts and resources in to affect positive change.
Have a Financial Safety Net
A lot of households are living from paycheck to paycheck. This leaves them little to no room for making any errors. Over time, even just the thought of you making a financial slip-up can create that sense of anxiety that lingers in the back of your head. Having an emergency fund, which is not to be confused with a savings account, can give you peace of mind in the event that you receive an unexpected bill or lose part or all of your income.
Set Up a Debt Repayment Plan
If you struggle to pay off credit/debit cards or mortgage payments, a repayment plan is a simple yet effective tool to get you back on the financial track. Debt repayment plans are nothing more than a set schedule that removes the tedious task of manually making payments online or via check. You can start by using a debt repayment calculator that gives you a better idea of how much time you'll need to repay off all your debt under the conditions set by your bank or private lender.
Invest in Assets
Investing should not be confused with trading, which is the short-term selling or buying of assets in an attempt to secure greater gains over time. Learn traditional approaches to investing, including value and growth investing. These are time-tested methods to safely growing your savings and beats the returns you can get from savings account yields. Modern-day investors have a wide range of assets to choose from, ranging from traditional stocks and bonds to more nascent assets like cryptocurrencies. Crypto prices can be highly volatile in the short term but stocks are shown to increase over a longer period of time.
Some financial problems just can't be solved in a DIY fashion. Consult a financial advisor who can help design a plan that best fits your financial needs and circumstances. A financial advisor will walk you through the current issues plaguing your financial wellbeing and the appropriate solutions to fix them.
Taking better care of your finances lowers stress levels, which in turn also results in better physical and mental health. Be proactive with saving and investing your money while also working to minimize your financial risks with the tips aforementioned in this article.