{"id":2056,"date":"2016-05-11T00:15:32","date_gmt":"2016-05-11T08:15:32","guid":{"rendered":"http:\/\/www.cultofmoney.com\/?p=2056"},"modified":"2016-05-10T09:32:10","modified_gmt":"2016-05-10T17:32:10","slug":"6-ways-lower-financial-stress","status":"publish","type":"post","link":"https:\/\/www.cultofmoney.com\/6-ways-lower-financial-stress\/","title":{"rendered":"6 Ways to Lower Your Financial Stress"},"content":{"rendered":"

\"AlmostIf you\u2019re stressed about money all the time you\u2019re not alone. According to the American Psychological Association 72% of Americans are stressed over money<\/a>. That\u2019s a lot!<\/p>\n

If you\u2019re proactive you can eliminate much, if not all, of your financial stress. Here are some of the most common ways to lower your financial stress and set yourself up for success.<\/p>\n

Establishing an Emergency Fund<\/h2>\n

An emergency fund<\/a> is a specific set of savings earmarked only for emergencies. This money is meant to be used in the event you lose your job, your car breakdowns or some other unexpected and urgent expense pops up. This money should only be touched in the event of a true<\/strong> emergency.<\/p>\n

It\u2019s recommended that you save at least three to six months\u2019 worth of your normal expenses in an emergency fund.<\/p>\n

I personally am a bit of a worrier and like to keep my emergency at the higher end of the spectrum. Having this money to fall back on has been a huge stress relief for me and can be for you too.<\/p>\n

An emergency fund will eliminate your need to rely on credit cards to get you through tough times.<\/p>\n

Creating a Budget<\/h2>\n

We live in an instant gratification society. You no longer have to save up your cash and drive to a store to buy what you want. Nope, now you can hit up your favorite online retailer, add whatever you want to your cart, use the credit card that\u2019s automatically on file and with a click of a button have some material goods shipped to your door in a matter of days.<\/p>\n

This instant gratification and ease of spending has put many American\u2019s budgets in the red.<\/p>\n

If you really want to eliminate financial stress you have to stop spending more than you make, stop buying things you don\u2019t really need and become aware of your financial situation. You can do this by creating a budget.<\/p>\n

Figure out exactly how much you earn and how much you spend. At the very least you need to make sure that your earnings are higher that your spending. Ideally, though you should have a surplus of money that goes toward your financial goals and your retirement account.<\/p>\n

Create a budget and stick with it. This will help ensure that you\u2019re living within your means.<\/p>\n

Eliminating Consumer Debt<\/h2>\n

Consumer debt is the worst. <\/em>Especially credit card debt that often comes with interest rates higher than 20%. If you have high interest consumer debt you need to get rid of it, pronto.<\/p>\n

The debt payoff method I prefer is the debt snowball<\/a>. With the debt snowball you\u2019ll make a list of all of your debts and list them from lowest balance to highest balance. You\u2019ll then put as much money toward your lowest balance debt while making the minimum payments on all of your other debt. Once the lowest balance debt is paid off you\u2019ll start working on the next lowest balance.<\/p>\n

The downside to this method is that you may end up paying more in interest. To mitigate this you can use the debt avalanche method and start paying off your debts from highest interest rate to lowest interest rate while still making minimum payments on everything else.<\/p>\n

Choose whichever method is more appealing to you. The important thing though is that you get rid of all consumer debt. (And stay out of it.)<\/p>\n

Having Appropriate Insurance<\/h2>\n

I didn\u2019t have health insurance for years and it was a huge stress. I used to think about it all the time. When I finally got insurance I felt like a weight had been lifted off of me.<\/p>\n

Consider getting the following insurances if you don\u2019t already have them:<\/p>\n