How to Stop Worrying About Finances in Three Easy Steps
If you are constantly worried about money, chances are, you aren’t making the best decisions when it comes to money management.
Recently, I had a discussion with someone about how his coworkers and supervisors were making businesses decisions based on fear. They were not looking ahead and making long-term plans. Instead, they were constantly in a flight-or-fight mode, simply dealing with one disaster, then the next.
As I thought more about this conversation, it reminded me of people who handle their personal finances in a similar manner. They are operating from a place of fear, which affects how they daily decisions about their money, and preventing them from making wise long-term decisions and goals. Here’s how to stop worrying about money in three easy steps.
Do You Operate From a Place of Fear?
The first thing you need to do is determine whether or not you are operating from a place of fear when it comes to your money. Once you determine this, you will be able to work to change it and begin making real progress in your financial life.
Here are a few signs:
- I am worried about buying the groceries, paying my bills or handling an unexpected emergency.
- I am always looking forward to my next paycheck so I can cover the necessities.
- An emergency like a car repair puts me into a tailspin.
- I use my credit cards to cover things like groceries, even though I know I won’t be able to pay off the balance that month.
- I do not have any money in savings.
- If I lost my job, I do not think I could pay my bills the next month.
- My money is gone as soon as I get it.
- I never have money for extras.
How to Stop Handling Your Finances with Fear
Often when you operating from fear with your finances, it is because you are living on the very edge of your income. You do not have anything in savings, and it feels like you do not have any way of taking control.
There are two different approaches if you want to change your money mindset and stop operating from a place of fear. First, you will need to build an emergency fund, which can help alleviate that sense of panic. An emergency fund helps give you peace of mind, since it acts as sort of an insurance policy, helping you cover any unexpected financial emergencies.
Second, determine if you are operating from a place of fear because you are spending more than you make or are in over your head in debt. Then, make a plan to change it. This means setting long-term goals and setting up–and sticking to–a monthly budget.
Focus on Your Budget
First, address your budget. Start by setting up a bare-bones budget that covers only basics, using the extra to build your emergency fund each month. This budget will be tight, but hopefully, it will be temporary.
Once you do that, you can set up a true monthly budget. A monthly budget can also help you manage your income on a regular basis so you don’t struggle to pay bills, pay for groceries, or have to count down the days until your next payday. Be sure to earmark some of your regular budget toward padding your emergency fund. Once you’re on a budget for a few months, you can study where your money went. This can help you identify the cause of your problem, whether it is spending, debt, or not making enough money.
It may even be a combination of all three.
Increase Your Income
Next, you need to address your income. It may seem like you do not have time to do this if you are barely managing to put food on the table, but it is the way you can truly change your situation.
Study the numbers. If you are sticking to a budget, saving, and being frugal, but still do not have enough money to live comfortably and stop operating from a place of fear, then you may need to increase your income.
This could mean looking for a new, higher-paying job, or even taking on a second job to boost your earning power. You may need to go back to school in order to get a better job. While this may seem expensive, remember: If you want to make more money, you need the skills and degree to make it possible.
Updated by Rachel Morgan Cautero.