Here are some top tips
Worrying is not good for your health and the worrisome thing about worrying is that it won’t solve the underlying problem. Money issues are one of the biggest reasons people worry because the lack of money could seriously reduce your quality of life. One of the mean reasons people are disturbed about money is that they often feel powerless when they are facing financial challenges. This piece however provides five powerful steps that can help you take charge of your finances instead of worrying yourself to death.
1. Build an emergency savings fund
If you have a tidy amount of money tucked away for the proverbial rainy days, you’ll have fewer reasons to be worried about money matters. Creating an emergency savings fund could help you meet emergency financial needs such as a blocked toilet, sudden transmission failure, or sudden job loss. Ideally, you should have at least six months of living expenses in your emergency savings fund.
2. Learn to make and use budgets
Budgets can give you a measure of control over your personal finances and you’ll have fewer reasons to worry about money when you are in control of your finances. A budget helps you to plan how you’ll spend your money because you’ll be able to reduce impulse purchases to the minimum. Using a budget also ensures that you sort out essential bills such as taxes, insurance, utilities, mortgage, and groceries before you start spending money on intangibles. A budget can also help you make a clearer distinction between your wants and your needs.
3. Get the support of your family
Sequel to making (and using) a budget for your finances, you’ll also need to make sure that you get the support of your family members. The support of your family members is very important in your bid to ensure that you don’t have reasons to worry about money. For instance, you’ll need to get your spouse and kids to agree to some of the ‘austerity’ measures you might need to adopt in your budgeting.
You’ll need to create money goals with your spouse to reach specific targets such getting out of debt, buying a house, and saving up for college. Some of the money habits you should teach your kids include learning to earn before they can spend, delayed gratification, and saving up small bits of money to purchase a big-dollar items in the future.
4. Get multiple streams of income
You can also improve your financial outlook by finding ways to unlock multiple streams of income. You’ll always have reasons to worry about money if your income is lesser than your expenses. Interestingly, for most people, money tends to flow in through a single narrow end of a funnel while it flows out through multiple exit points in the wide end of the funnel. You can unlock extra sources of income by taking a second part-time job, starting a passive business, or freelancing your skills. You should also not underestimate the power of investment in income-yielding assets such as bonds to give you a consistent stream of extra income
5. Sometimes, you’ll need to take your lemons
Sometimes, you’ll still end up in a financial quicksand despite your best efforts to make smart financial decisions. For instance, the stock market might crash and you end up losing all of your investments. You might suddenly find yourself out of a job because your firm is downsizing or fixing redundancy. A family member could suffer a medical emergency that your insurance policy does not cover and you’ll be forced to take money meant for other things to pay hospital bills.
When life throws the lemons that it inevitably throws at us all – you should know that worrying will do your more harm than good. Irrespective of how bad your financial situation looks, there’s always a solution. Worrying would only harm your health and the financial problem will remain unfixed.