How to Reduce Financial Stress
Evaluate your spending., Create a monthly budget., Rank your purchases from most to least important.
Step-by-Step Guide
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Step 1: Evaluate your spending.
You may wonder where all your money goes each month.
Create an expenditure list of what you spend.
First look at what you spend on basics such as housing, utilities, phone, car payments, and other regular monthly expenses.
Then assess what you spend on that can vary day-to-day or week-to-week.
Track your expenses for a month or longer, to get a better picture.If you are financially stressed and have a family, try tracking the spending habits of all your family members to get a better sense of each person's spending.
If you are stressed due to large amounts of debt that you owe, make sure to put debt payments as part of your basics, such as utilities and housing.
It's important to prioritize these equally to your other necessities.
Make sure to track even smaller purchases such as a morning cup of coffee at Starbucks, DVD rentals, or quick trips to the grocery store.
For example, if you purchase a cup of coffee for $2.50 five days a week, it ends up being $50 a month in buying morning coffee. -
Step 2: Create a monthly budget.
Look at all your sources of income that are regular and consistent.
If you have a family, create a household budget that includes everyone's income in the home.
If you are a student, look at your income and/or any money via student loans or family support.
Once you have a sense of how much money you can spend each month, look at your spending habits again.See if your spending outweighs your income.
Evaluate if you are just "breaking even" in which you have no extra income or savings after your monthly spending each month.
Look at how much savings you have possibly each month. , Understand that there are differences between necessities and luxuries.
For example, if you buy your lunch every day, rather than bringing a lunch to work or school, that's not a necessity--it's a spending choice.
In order to reduce your stress, you need to understand which purchases are most important to you.
You or your family may have strong feelings about what purchases are most important to them.
Once you all come to a consensus on what are necessities (such as housing, debt payments, transportation, utilities, insurance, and groceries), then you can figure out what changes to make with your other purchases.
Consider making a list of purchases that are "luxuries" that are costing you more than you thought.
Evaluate which ones to keep, and which ones need to be reduced.
If you are evaluating your household's spending, try to come to a consensus among all family members.
Don't force others to only make changes while you don't. -
Step 3: Rank your purchases from most to least important.
Detailed Guide
You may wonder where all your money goes each month.
Create an expenditure list of what you spend.
First look at what you spend on basics such as housing, utilities, phone, car payments, and other regular monthly expenses.
Then assess what you spend on that can vary day-to-day or week-to-week.
Track your expenses for a month or longer, to get a better picture.If you are financially stressed and have a family, try tracking the spending habits of all your family members to get a better sense of each person's spending.
If you are stressed due to large amounts of debt that you owe, make sure to put debt payments as part of your basics, such as utilities and housing.
It's important to prioritize these equally to your other necessities.
Make sure to track even smaller purchases such as a morning cup of coffee at Starbucks, DVD rentals, or quick trips to the grocery store.
For example, if you purchase a cup of coffee for $2.50 five days a week, it ends up being $50 a month in buying morning coffee.
Look at all your sources of income that are regular and consistent.
If you have a family, create a household budget that includes everyone's income in the home.
If you are a student, look at your income and/or any money via student loans or family support.
Once you have a sense of how much money you can spend each month, look at your spending habits again.See if your spending outweighs your income.
Evaluate if you are just "breaking even" in which you have no extra income or savings after your monthly spending each month.
Look at how much savings you have possibly each month. , Understand that there are differences between necessities and luxuries.
For example, if you buy your lunch every day, rather than bringing a lunch to work or school, that's not a necessity--it's a spending choice.
In order to reduce your stress, you need to understand which purchases are most important to you.
You or your family may have strong feelings about what purchases are most important to them.
Once you all come to a consensus on what are necessities (such as housing, debt payments, transportation, utilities, insurance, and groceries), then you can figure out what changes to make with your other purchases.
Consider making a list of purchases that are "luxuries" that are costing you more than you thought.
Evaluate which ones to keep, and which ones need to be reduced.
If you are evaluating your household's spending, try to come to a consensus among all family members.
Don't force others to only make changes while you don't.
About the Author
Kenneth Brooks
A passionate writer with expertise in creative arts topics. Loves sharing practical knowledge.
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