Reducing financial stress: a few actions you can take now

posted by Chris Valentine

Reducing financial stress is essential in a world where there are so many other stressors nipping at your heels ... photo by CC user LaurMG on wikimedia commons

We all deal with stress from a variety of different sources. On big area of stress for many people is dealing with difficult financial issues. Money issues can be overwhelming at times. Fortunately, reducing financial stress is easier than you think. Use these tips to improve your financial situation and have peace of mind.

Financial situations that cause stress

The financial challenges of the last 10-15 years have caused more people to feel financial pressure. Consumers experienced the real estate mortgage collapse of 2008-2009. Investors have also seen sharp fluctuations in stock prices in recent years. These factors, along with higher unemployment, have made life financially difficult for many people.

Quickanddirtytips.com points out that financial stress can be caused by several factors:

·  On a basic level, many people simply can’t generate enough income to pay their bills each month. This circumstance may be due to job loss or underemployment. People in this situation may have to borrow continually to meet their monthly expenses.

·  Other consumers can pay their bills, but don’t have the ability to save money for an emergency. This group is living paycheck to paycheck, which is stressful. People in this situation are concerned that they won’t be able to pay their bills if they lose their job. If they have an unexpected car repair or other expense, they won’t be able to cover the expenses.

·  Some consumers face complicated finance issues. These people may have a many different debts, each with a different interest rate and maturity date. The sheer complexity of dealing with so many different debts can be stressful.

Stress is defined as the body’s response to situations or a series of events. One type of stress is a fear of the unknown. Other people may feel stress because they find their financial problems embarrassing.

Find areas where you can make spending cuts

Consider expenses that you can cut. Some of your debts are fixed, such as your home mortgage and car payments. Other spending can be reduced. Food and entertainment may be the easiest areas to cut. Instead of buying expensive coffee each morning, try making coffee at home several days a week. If you see a movie three times a month, cut back to one movie a month. California satellite TV providers explain that DIRECTV can offer hundreds of HD channels and Internet access for one low price. You may be able to save money by dropping cable TV.

Think about your utility costs too. You can cut your energy costs by using less hot water. If you wash your clothes in cold water, you won’t incur the expense of heating the water. If you do your homework, you can find ways to cut your costs. Once you identify areas of spending to cut, you can think about your entire financial situation.

Working toward a financial solution

You can start to reduce your stress when you work toward a financial solution. Understanding the extent of your financial problem will eliminate that anxiety about the unknown.

Gather all of your financial records and write down all of your debts and bills on one document. List each debt, the amount owed, the monthly payment and the period of time remaining on the loan. Group these debts into one category on a sheet of paper or an excel document. This would include your home mortgage, car payments, credit card balances and any other debts you have.

One you’ve written down all of your debts, add the bills you pay each month. This would include your utility bills, groceries and entertainment.

You should end up with a document that lists all of your debts, and all of your expenses each month. Add to that the specific spending cuts you can make. Finally, use some of your spending cuts to pay off debts sooner than planned. The less debt you owe, the less interest you’ll pay each month.

When you’re able to review where you are and where you’re headed, you’ll build some confidence. This process can help you see that your financial problem can be solved. Having a solution will give you some peace of mind.

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