9. Simplify Your Financial Needs
Learn the joy and freedom of simple
living! Here are some tips for de-stressing your financial life by
simplifying your financial needs:
• Before you spend money, stop for
a moment, take a deep breath, and ask yourself, “Is this item worth the
time out of my life I took to earn the money I’ll pay for it?”
• If you decide that something
really is worth the money for you, even if it would be frivolous to
someone else (dinner at a restaurant when you can’t face cooking, or
that pair of shoes that feels perfect), buying it will probably be less
stressful than letting it go.
• Make a list of things you can do with your family and/or friends that don’t cost any money. Be creative!
• Drive less. Walk, bike, or take public transportation more.
• Do you really need all those extra movie channels? Would basic cable satisfy you?
• Cooking can be fun, and home-cooked meals are less expensive than frozen dinners.
• How often do you go to
your gym? Are you throwing away money when you’d rather just take a walk
or a jog or a bike ride for free?
10. Keep a Close Eye on Your Finances
It isn’t easy to keep track
of every single penny that comes in and goes out. However, if you don’t
do this, at least for, say, a representative week or two out of each
month, you will never know where your money is going. Like anything
else, keeping track of your money is a matter of habit, and this
is a good habit to get into. Plus, writing down every single penny you
spend every single day has another surprising effect: major stress
relief. Simply knowing where it is going is incredibly calming.
11. Build a Financial Cushion
Financial stress is largely a product
of knowing that you don’t have enough money in the bank if an emergency
arises. What if your car breaks down, or you incur some major medical
expenses? When events such as these occur, your stress level is likely
to go soaring. But if you have a cushion—many experts recommend six
month’s worth of monthly income stashed away in an easily accessible
savings or money market account—then you will rest easier, just because
you know it’s there. Whenever you have to tap your account, make paying
yourself back your first priority.
12. Get Started Today
How do you get a cushion?
Successful savers say they put 10 percent or more of every single penny
they make into savings before they have the chance to spend it. Setting
up a system in which that 10 percent is automatically deducted from your
paycheck is even easier. If you get used to doing this, you won’t ever
miss the money. Make this your top priority—it’s an easy way to give
yourself financial peace of mind.
13. Have a Cushion Goal
Figure out what you need each month,
then multiply that number by six. That’s your cushion goal. Put 10
percent of your very next paycheck in that cushion fund.
If you put away just 10
percent each month, you’ll reach a six-month cushion in five years, if
you never use the money. To get there faster, put extra money in your
cushion fund whenever it comes along—say, gifts for holidays, windfall
money, and so on. Or, put away 10 percent this year, 20 percent next
year . . . some people make it their goal to be able to live on 50
percent of their monthly income and save the rest.
14. Conquer Your Debt
Make chipping away at those
high-interest debts your top priority. Debt may not be something you can
hold in your hand, but neither are a lot of the things that cause you
chronic stress. Just knowing you’ve got huge debts is enough to activate
the stress response in some people. First, purge the debt. Then, start
saving. You might be stuck with a mortgage and a car payment, maybe.
Other than those, pay them off, pay them off, pay them off, and breathe
more freely.
15. Simplify Your Finances
Set up a simple system for financial
management. Go through a single bank for all your transactions. When
possible, have your paycheck automatically deposited into your bank
account, and have payments made automatically or make them online so
that you don’t have to run to the bank all the time. If you invest, go
through a single firm. If the thought of investing stresses you out,
don’t do it.
16. Plan for the Future
Save. Save. Save. The short-term
sacrifice of buying something you don’t really need and probably won’t
use very much, the decision not to do the expensive remodeling or get
the really high-profile SUV, the decision to move to a smaller and more
manageable house, to stop eating out so much, to spend more time at
home, all in favor of saving, saving, saving, is well worth it in many
ways. Your life will be simpler. It will be easier. You’ll have a nest
egg. All that adds up to a lot less stress.
