Benovate’s Expert Blogger
Benovate’s Expert Blogger
5 Tips for Eliminating Financial Stress and Improving Your Finances
When it comes to your finances, there are three main categories to stay aware of: savings, necessities, and discretionary items.The money set aside in a savings account or 401(K) is savings. Necessities are things like rent, food, and medicine. Discretionary items are nonessentials like a daily frappuccino. Sometimes it can seem like savings are the lowest priority, but in order to relieve financial stress and anxiety, it’s important to treat that part of your finances just like your necessities.
Get Serious about Saving
Start saving from each paycheck. If it’s never in your wallet, you won’t miss it, and building up savings is easier when you stop waiting for excess. This doesn’t have to be a lot, even ten dollars will do, but try to set a little bit aside each time you get paid. By the end of the year your account will have a few hundred dollars more than it does now! If something happens and you need that extra money, it’ll be there for you to use.
Sometimes people simply forget to save. It can be difficult to remember, especially when you’re busy with work and other responsibilities. Many banks can set up an auto-transfer so that you don’t have to worry about it. If that doesn’t sound like the route for you, try setting a recurring reminder on your phone.
Learn Your Habits
If you’re looking for overall financial growth, the first thing you need is to understand your spending habits. Save your receipts and keep an expense journal or spreadsheet for at least a month. Label each expense, including price, date, item, and necessity or discretionary. This may seem tedious, and it will certainly take some time, but it’s with the effort to know exactly how much you spend on essential and nonessential items. Do you know how often you need to buy shampoo? What about how much you spend on soda? Do you purchase more discretionary items at a certain time of day or week? When you know, you can decide how to cut back.
Stick with the Plan
Once you know your spending habits, you can start building a budget for yourself. This will detail how much you’re able to spend each month on essential and nonessential items, while everything else will go to savings. If you’re finding that you have enough money left after taking care of your bills and groceries, increase your savings budget. If you tend to be short on cash between paychecks, decrease your budget for nonessentials. Your expense tracker will be the most helpful tool to this process. If any part of your finances change, such as getting a raise or moving to a different apartment, adjust your budget accordingly.
The easiest area to cut back on spending is discretionary items, but you can speed up your financial growth by saving on necessities too. Shop whichever fruits and vegetables are in season. The US Department of Agriculture has a handy guide to help you get a feel for what’s in season at different times of the year. You can also use coupons, loyalty programs, and sales to save money. When your favorite meat or vegetable is on sale, buy a little extra and put it in your freezer. These shopping techniques will also push you to try new recipes and have more fun in the kitchen.
When it comes to clothing and entertainment, pause before buying, and think about whether you need or want it. Are your sneakers falling apart, or did your favorite brand just release a new design? It can be easy to overspend, especially in our era of online shopping, so this is an important skill to develop.
Plan for Retirement Early
One of the biggest sources of financial stress and anxiety often goes forgotten: retirement. This can seem like it’s far in the future, but it slowly sneaks up on you. The best way to relieve this stress is to start planning ASAP. If your employer offers 401(K) benefits, make sure you’re taking advantage of them. You can also look into options like an IRA. Talk to a certified financial planner about how early you want to retire and the kind of lifestyle you want in order to decide exactly how much you should be saving.
Lose the financial stress and get prepared for the future.
Your finances don’t have to be a source of anxiety, so use these tips to get prepared for your present and your future. Financial growth is an achievement—no matter how small. Celebrate your wins!
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