How to Stop Worrying About Finances in Three Easy Steps

Are You Making Your Financial Decisions Based on Fear?
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If you are constantly worried about your budget, paying bills, or buying groceries, then perhaps 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 business 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 after another.

As I thought more about this conversation, it reminded me of people who handle their personal finances in a similar crazed manner. They are operating from a place of fear, which affects their daily decisions about their money and prevents them from making wise long-term decisions and goals.

Here's how you can stop worrying about money and start making better financial decisions.

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:

  • You are worried about buying the groceries, paying the bills or how you'd pay for an unexpected emergency.
  • You are always looking forward to my next paycheck so you can cover the necessities.
  • An emergency like a car repair puts you into a tailspin.
  • You use my credit cards to cover things like groceries, even though you won’t be able to pay off the balance that month.
  • You do not have any money in savings.
  • If you lost your job, you would not be able to pay your bills that month. You also do not have an emergency fund.
  • Your money is gone as soon as you get it.
  • You never have money for extras, like going out to dinner or getting a haircut.

How to Stop Handling Your Finances with Fear

Often when you are operating from a place of fear regarding your finances, it is because you are living on the very edge of your income. You don't have the safety net of an emergency fund, and you feel like you're not in control of your money.

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 and can help 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, setting up a monthly budget, and paying off debt.

Focus on Your Budget

Now it's time to address your budget. Start by setting up a bare-bones budget that covers only the basics. Then use the extra to build your emergency fund each month. This budget will be tight, but remember, it's only temporary.

Once you fund your emergency fund, 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. 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.