Personal finance is stressful on a good day. But when your situation is exacerbated by the chaos of life, maintaining financial health can be a challenge. Sometimes even just sitting down to review your finances can cause a spike in blood pressure.
If your finances have you on edge, take a deep breath and consider a few strategic money moves. Find the courage to face your fears head-on as you develop ways to address stress-inducing financial issues. When you’ve made key adjustments, you can let your financial plan run itself while you focus on enjoying your life.
1. Prioritize Financial Factors That Matter to You
The potential to-do list for managing your finances can easily get out of hand and overwhelm even the coolest of characters. Instead of trying to address every conceivable aspect of financial wellness, focus on the factors that matter most to you.
Individuals with large amounts of student debt may want to eliminate their burden as soon as possible. Others, viewing their debt as a tool needed to achieve an education that boosts their earning potential, may take a more relaxed view. When managing the debt you have incurred, determine whether you’d be happy making regular progress toward payoff or whether elimination would be ideal.
Assess your situation for potential improvement and prioritize no more than three goals to pursue at any one time. If building or improving your credit is important to you, review your options for establishing or repairing credit. Consider getting a secured credit card, which can help build a history of responsible credit use over time. Check your annual credit report regularly to ensure its accuracy and pursue adjustments if anything is incorrect.
2. Make Money Moves That Ease Your Worry
Do you find yourself constantly refreshing your account balance, calling to confirm your credit limit, or panicking the week before payday? If so, knowing where you stand financially may be important to you.
Consider using at-a-glance apps that aggregate your financial data in a central location. With one login, you can review your balances to ensure that things are as you expect them to be. Set alerts to manage cash flow and due dates as an extra layer of protection against late fees and overdue notices.
Individuals with variable income may find security in establishing multiple income streams to make cash flow more reliable. If you rely on tips, freelance work, or on-time payment of customer invoices, you may benefit from a multi-layered solution.
Aim to pay bills early or request due-date changes to mesh with your income streams. Establish a robust savings balance to prepare for lower-income months. Consider using a credit card for daily expenses to smooth cash flow, paying the balance in full each month to avoid interest.
3. Advocate for Your Financial Well-Being
You’re the only person who will prioritize your financial well-being, so it’s on you to advocate for your needs. Understand your value to your employer and your marketability, elevating yourself for promotions and new job opportunities with confidence.
If you learn that you’re underpaid, discuss your findings with your supervisor, correlating your contribution to your market value. In the event your employer isn’t able to make adjustments, don’t take it personally — but do be open to new opportunities. Generally, people who change jobs can boost their income 10%-20%, compared to average salary increases in the 3% range.
Establish boundaries with family and friends when it comes to money, even if it’s uncomfortable or could create a rift. Some cultures expect children to serve as their parents’ retirement fund. While your heart may want to provide that support, it’s challenging to deliver such a benefit in today’s economy.
Initiate a conversation about what’s possible and reasonable, sharing your concerns and what’s possible long-term. Set limits that allow you to fulfill your obligations and future plans, sharing what’s yours only when you want to.
4. Establish Solid Money Habits That Mesh With Your Life
Doing the hard work of establishing healthy habits is one of the most mature things you can do. Whether you’re changing long-held financial beliefs, boosting your physical fitness, or improving your nutrition, creating better habits is key to success.
Give yourself grace as you attempt to establish healthier patterns. Researchers found that it takes an average of 66 days to create new habits, so keep that in mind on your journey.
Set small goals as you work toward larger changes. For example, break down your credit score improvement goal to specific drivers like total credit utilization. Aim to decrease your percentage of credit use each month, setting a reduction goal that’s reasonable for your situation.
Post your progress on your fridge, in your agenda, or in an Excel sheet you reference regularly. Celebrate key milestones, like getting your utilization under 30%, a rate which can improve your Clearscore Credit Score.
Treat your financial wellness both like a business deliverable and a kindness you’d wish for others. Commit to your goals and hold yourself accountable for their delivery, even when doing so is a challenge.
Honor your commitment to yourself, just as you would a promise to a close friend. When you prioritize your financial wellness, you can give yourself the gift of less stress and more joy each day.