Financial Stress Tips – Tips for Preventing & Dealing with Financial Stress
For many of us, financial stress is a common experience. The ongoing effects of the financial crisis in the USA and other countries combined with rising prices put many of us under financial stress. Personally, I try my best not to stress out and it usually works, but a lot of other people I know cannot deal with stress so easily. Here are some financial stress tips to help you toward less stress or hopefully stress-free living.
Tips for Dealing with Financial Stress
Cash is King
Let’s play a game. Pretend you are back in the good old days when credit cards didn’t exist. Back then you paid cash for your purchases. If you didn’t have cash, well that was too bad. You had to do without. Some people cheated and used layaway plans, but even then you didn’t get your merchandise until you paid off the final amount in cash. If you use cash, you will once again appreciate the true value of money. You really have to stop and think before you make a purchase.
Cut Up or Avoid Credit Cards
If you have credit cards that you are not using and have no outstanding balance on them then don’t hesitate to cut them up. You don’t need that temptation. Back in the 80s, I had a lot of credit cards. I was using them for emergency money for buying houses as I was a real estate investor. Then things started going bad with collecting rent money with some of my rental houses or houses I had rented to people with a lease option.
Rather than make things worse by borrowing money from my many credit cards I promptly decided to sell all the houses with problems. At the same time, I cut up all my credit cards. I had dozens of them. That was one of the best moves I ever made. It ended lots of unnecessary frustration caused by worrying about how I was going to get the money back if I borrowed from any of those credit cards.
Don’t let your credit spending get out of control. Also, don’t spend money you don’t have. That means don’t borrow money from your credit cards or buy anything using your credit cards where you have a recurring payment. It is much safer and smarter and to use a debit card, if necessary, to access the money you have already in the bank. If you use a debit card at least you won’t have to deal with the financial stress of receiving an unwanted and growing credit card bill.
Use ‘pre-paid’ Plans for your Mobile Phone
A mobile phone or cellphone is just another way to spend money you don’t have. Some people really seem to lose control of how much they talk and have huge monthly bills from their cellphones. To add to your financial stress, many telephone companies are quick to ruin your credit rating if you don’t pay on time. The most economical way to have a mobile phone is to use pre-paid phone cards. This way you pay with money you know you have. It also helps to control or limit your talking time since you don’t want to run out of talk time or have to keep reloading your account because you talk too much.
Life is full of little emergencies and unexpected events. They always seem to occur at the most inopportune moment. Saving money for a rainy day in an easily accessible cash account will certainly help relieve the financial stress of affording a new refrigerator or car repair, or worse yet the necessity of getting a new car. Help to combat financial stress with money you have put away for a rainy day and you will sleep well at night.
Tips for Preventing Financial Stress
Try to Improve your Income
You must have a regular source of income and preferably more than one. Since your income is the basis of the foundation of a stress-free financial life it is a critical part you cannot neglect. Income can come from many sources but look at it as a solid way to allow you to repay any debt. A good income stream or several smaller ones can help you build wealth and maintain your desired lifestyle.
Now with the internet as a normal part of so many of us don’t forget to consider using it to earn some extra cash. If you have a hobby maybe you can turn it into a bit of extra cash by selling something related to your hobby. Or possibly you can provide a service-connected with your hobby. It’s something to consider.
Personal Debt – Pay it off quickly
You don’t want to owe money if you can avoid it. Yes, there are common instances where it is not practical to pay cash or you don’t have the cash on hand to pay the total amount of money for something you really need, but other than that pay off personal debts as quickly as possible.
Owing money can lead to financial stress and be a particularly stressful experience. It is always best to spend less than you earn. However, it is not difficult for debt to get way out of control, particularly when you make a bad turn in life or things go wrong. Sometimes people use expensive debt to help in periods of illness and recovery but it is a common mistake. That is the job of savings and insurance to cover such unforeseen circumstances.
Unfortunately, there are no tax breaks for the personal debt. So don’t look for any breaks on that. Get rid of any personal debt as fast as you can. Personal debt includes home loans, personal loans, car loans, hire purchase, and all forms of credit. There is a variety of ways to manage debt and reduce your stress levels quickly.
If you have equity in your home you may be able to consolidate all your debts into one at the home loan rate of interest. As part of a home loan refinance, your personal debts can be rolled into your mortgage loan, which means one loan repayment per month at a lower interest rate instead of many. Now, this only makes sense if the mortgage rates currently are lower than your personal debt interest rates. Note, however, that a new mortgage loan is likely to be longer than any personal loans or debt payments might be, so take that into consideration.
If this strategy is one you might be able to take advantage of it might also offer you an additional benefit of an income tax deduction if your new home loan is on your house you live in. Of course, the tax laws are quite convoluted so you should see your tax advisor or read the IRS rules on tax deductions since tax laws change like clockwork.
Start a Nest Egg for Future Use
You need to keep any financial stress levels low or prevent financial stress if that is even possible in your situation. High financial stress causes undue strain on you and should be avoided whenever possible. Creating a nest-egg for the future can create rainy day funds that can provide money for emergencies or other uses. You might need professional assistance to guide you if you decide to invest your nest egg or part of it.
Protect yourself – the unexpected might happen
Life, sometimes we cannot seem to control it. Many things can go wrong during your life. Disaster, health, your home, your family, your income, your business, or your personal wealth are all a source of potential problems. Smart people not only invest wisely but can sleep easy because they are insured with health and other kinds of insurance plus their property is insured against the unexpected. This includes those that live in an apartment since you can have insurance too.
Copyright © Halfmoney.com
About the Author