According to statistics, money is the single biggest worry that we humans have – affecting almost a third of us from time to time.
But there are ways to soften the blow, no matter what your current financial situation is. If you’d like to learn how to stop worrying about money then consider the following tips for a stress-free life and a good night’s sleep…
Make a Spending Plan
One of the most common reasons to worry about money is because we’re on a tight budget – an expected bill can make us lie awake at night, wondering how we’ll make ends meet.
To counteract this, the first place in eliminating worry is to create a spending plan. In doing so you’ll gain conscious control over how much money is coming out, what is going out, and what needs to be paid when.
Under such circumstances you can rest easy that your most critical bills – such as your rent or mortgage are fully covered without concern.
Automate Your Outgoings
Back when I was a recent graduate I was terrible and remembering to pay important bills. I would suddenly wake in the middle of the night remembering that I hadn’t paid my credit card bill or car insurance.
To eliminate this source of worry I set up automatic payments for these “mission critical” payments with my bank. Now, I don’t have to remember to manually pay them; they’re all done automatically. All I have to do is double-check that they have gone out occasionally.
As another handy tip, try to rearrange any recurring expenses – gym memberships, car insurance, etc. – to go out on a specific day of the month.
Personally, all my regular bills go out on the first of the month, so that by the 3rd or 4th I can quickly check in to make sure everything should have gone out. Even better, I know anything still in the account is “mine” rather than being needed for major bills.
Increase Your Income
I’ve lived a hand-to-mouth existence in the past – so I know it’s no fun. When there’s very little wiggle room between your income and expenses it can be a major source of stress. To help me stop worrying about money, therefore, I did what I could to increase my earnings – and so widen this gap.
There are all sorts of ways that you can increase your income, from asking for a pay raise at work, through to starting your own online business. Back when I was struggling I started a blog about selling products online.
While it took some effort, within six months or so I started to put adverts on my site to earn revenue. The very first month I did this the site generated over $1,500. I still remember dancing around my kitchen when the check popped through my letterbox, knowing that finally I could stop worrying about money. You can learn more about how easy (and cheap) it is to start a blog in my detailed tutorial.
Audit Your Expenses
A further way to increase the gap between income and expenses is to start spending less. I recommend going through every single outgoing you have (for ease, I like to use bank statements to identify them) and then look for ways to reduce or even eliminate them.
Do you really need that gym membership? Can you downgrade your cell phone tariff? Can you cancel that magazine subscription, or switch to shops-own brands of food? Every little cut you can make will help to reduce the worry you feel over money as there’ll be more left over.
Pay Off Debt
My other major worry some years back was my ever-growing pile of debt that I had built up. From a few thousand on a credit card this soon ballooned to the point that I could barely even afford the minimum monthly payments.
I worried constantly not just about how I was going to meet this month’s payments, but even worse how I might pay them down to zero.
Eliminating debt not only stopped me worrying half as much (honestly, it feels amazing to be debt free) but also freed up extra money each month that I could put to better use.
Plan for the Future
Once you’ve covered the above steps you should be well on your way to reducing your worry over money, but there’s one final step that can really seal the deal: start planning for the future.
With your debt gone, your income raised and your expenses slashed, you should have enough money to start getting “ahead of the curve”. Start off by building an “emergency fund” – an instantly-accessible savings account with enough money in it to get you out of emergencies.
Quite how much you should save depends on your personal circumstances and your feelings about money. For some people just having a spare $1,000 for emergencies is enough to help them sleep better at night, while others prefer to keep 3-6 month’s worth of living expenses in there.
While this will of course take longer to build up, it means that if you’re unfortunate enough to lose your job at any point, you’ve bought yourself time to reassess the situation and find a new source of income without getting stressed.
Lastly, once your emergency fund is complete, start saving for the future. Grab an investment account from a reputable company like Betterment and start slowly putting money away for a rainy day.
You’ll be surprised just how quickly this money can build up when you invest it somewhere that earns a decent rate of interest.