Control Financial Stress

Let’s get down to brass tacks, in this economy there is more than enough financial stress to go around. Even people who thought they were financially secure are having doubts, and the rest of us, well, if you’re like me, you’re just squeaking by! I can’t offer any quick and easy ways to get out of this mess but I can give you some general advice on how to deal with some of the stress that comes with it.

Assess Your Situation Honestly

The first thing you need to do in order to address any financial stress is to accurately assess your current situation. If you don’t have a clear grasp of what you’re dealing with, well, obviously you can’t deal with it effectively.

Many people tend to bury their heads in the sand when it comes to their own finances. This is fine in the short term and it may even help you sleep at night, but if you don’t get a realistic handle on your financial situation, at some point the real question won’t be if you’re sleeping, but where you’re sleeping!

So, block out some time in your schedule, preferably on a weekend when you’re likely to have more free time anyway, and use it to go through your finances, in detail. If you’re married or have a partner, make sure that he or she is on board with this too. If you have kids, try to wait for a play date or sleepover so that you’ll have plenty of time to hash things out, and if you wind up getting stressed, they won’t be around to absorb that stress – better for everyone.

Make a Realistic Plan

Once you have a clear picture of your financial situation it’s time to figure out what you’re going to do about it. This requires another chunk of time, and another play date or two! While it may feel like it’s just too much trouble or takes up too much time, you owe it to yourself to spend that time. After all, it may have taken years to get yourself into financial trouble and it may take years to get out. Taking the time to come up with a plan that works and is realistic is definitely worth the effort.

Consult a Credit Counseling Agency, if necessary

Be realistic about what you can do. If you have too many credit cards, all with near maxed balances, obviously you’re not going to get them all paid off at once, so don’t try. A lot of people get into a vicious cycle where they keep paying only the minimum payment on their credit cards each month, many with exorbitant interest rates, and they see no way to actually pay down their debt.

The good news is that there are credit counseling agencies out there that can help. Typically they will consolidate your credit cards into one monthly bill and do all of the negotiating with your credit card companies for you. They will work with you to come up with a manageable monthly payment and talk to credit card companies directly about lowering interest rates. They will usually be able to negotiate seriously reduced interest rates for you.

In return, you may pay a small monthly fee, usually less than $20 and you’ll have to cut up your cards! You were planning on doing that anyways, right?

There is one agency in particular that I can personally recommend because I got into trouble a number of years ago and they helped me out: http://www.anewhorizon.org/

I’m sure there are many other agencies too, just make sure that they are accredited and have a good reputation because the last thing you want is to end up in a worse situation!

Set a Budget

Another thing you can do to ease the burden of financial stress is to set a budget and stick to it. Obviously this will require another block of time to work out the details, especially if there is another person or kids involved, but it is worthwhile for the peace of mind you will get knowing that you are taking positive action to stay out of (any more) debt.

The only word of caution I would use here is to make sure that you set a realistic budget. This is easier if you are only talking about yourself but it gets more complicated if there are other people involved. Have a detailed conversation with your partner and even your kids if you feel they are old enough to talk about what expenses can be eliminated. Make sure you have an agreement before you go ahead and make the budget. Be very clear that everyone has to do their part and sacrifice something. You won’t be able to maintain an effective budget if you make ‘exceptions’.

Change Your Habits

My final piece of advice to help cope with money worries is to change your habits. Permanently. This follows on from the point above. If you are going to find a way out of financial difficulty you need to think about what costly habits you can permanently eliminate from your life. This is a very, very difficult thing to do I know, but the reality is that unless your financial situation changes dramatically you will have to permanently alter some bad spending habits so that you don’t get into the same kind of mess again!

If you’re not sure what habits you should change, go back to the first point, getting a realistic handle on your financial situation. Facing up to your current financial problems is only half of the equation, you also have to examine what caused them in the first place.

Note: this is not an exercise in blame, that will only cause more stress. What’s done is done and the important thing is that you recognize bad habits in yourself, your partner and your kids, and make a commitment to changing them, now.

You should be able to follow all of the above steps over the course of about 4 weekends, so set yourself that goal. In just one month you could be well on your way to permanently reducing financial stress. A small amount of time to put in when you consider the benefits!

Hope this helps!

Jennifer

Ideas to Control Financial Stress

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