Tips for Overcoming Common Financial Fears
| Posted in Bank Blogs
Worried about money? If so, you're not alone. According to a survey by the American Psychological Association (APA), 87% of Americans reported feeling stressed about the rising cost of food, energy, groceries, and more since the pandemic.
But feeling stressed about money is not just limited to the pandemic or inflation. Many of us have experienced financial anxiety every day for a variety of reasons – from not having enough money to losing our jobs to saving for retirement.
The good news is that if you're having financial worries, you can take some steps to alleviate them. Here are ways to manage five of the most common types of financial worries:
- Meeting everyday expenses. When is the last time you looked at your paystub or pay information? Inflation can sure take a bite out of your budget and make it difficult to meet your everyday expenses, such as your rent or mortgage and grocery bills. Some ways you can manage that include:
- Reviewing all your monthly expenses to see where your money is going.
- Looking for ways to trim expenses, such as cable television, subscriptions, etc.
- Creating a monthly budget and sticking to it.
2. Managing unexpected expenses. Life is unpredictable; we never know when emergency expenses like car repairs or medical bills can pop up. The best way to prepare is having an emergency fund. Here are some suggestions for building your fund:
- Open a savings account specifically for emergency funds.
- Have a portion of your pay automatically deposited to your emergency savings each pay period.
- Put any extra money you receive, such as a tax refund or bonus in your emergency fund.
3. Losing your job. Losing a job can be devastating to your finances, which is another reason why it's critical to have a safety net with an emergency fund. You can, however, protect yourself from job loss by being proactive and –
- Obtaining additional skills to enhance your resume and make your position more valuable.
- Going back to school or getting additional training relevant to your job.
- Starting a part-time business outside of work.
4. Saving for retirement. We get it. It's hard to save for the future when you may be struggling with the high cost of living today. But the fact is, any amount you save for retirement can help you in the future. Some ways to build your retirement fund include:
- Participating in your employer's 401(k) or other retirement plan and taking full advantage of matching contributions if your employer offers them.
- Opening an IRA if your employer doesn't offer a retirement plan.
- Talking to a professional to determine where you are in your retirement saving and how you can get where you want to be.
5. Managing debt. Though you may have debt with a mortgage and student loans, having excess debt like credit card debt can be devasting to your budget, especially with interest rates rising. Here are some strategies to manage excess credit card debt:
- Pay down high-interest balances first.
- Make payments that exceed the minimum amount due.
- Consolidate your debt to a lower-interest credit card or loan. If you do so, be careful not to run up balances on your higher-interest cards again.
When you take these steps, you can gain greater control of your finances, lessen your worry, and sleep better at night.