Few of us like to talk about money. It’s a subject that’s often considered impolite to discuss, even among close friends and family. It turns out that this buttoned-up approach to our finances isn’t doing us any favours.
For many of us, financial stress has many negative effects on our health. Learning to reduce your financial worries is an important step to avoid health problems that result from financial stress. Listed below are ways in which you can reduce the emotional and physical impact of financial stress by analysing your money situation, creating a plan and changing your spending habits to ensure a better quality of life.
- Take time to analyse your monthly expenses. Write down where all of your money is going. Then compare your monthly expenses with your income and consider what expenses can be cut. The goal is to cut your monthly spending below your monthly income so that you give yourself some financial breathing room. The lower you are able to live below your means, the greater the financial freedom you will have.
- Rank your monthly expenses from the most important to the least important. By eliminating unnecessary luxury expenses, you can find previously wasted money that could go toward paying for more critical needs such as medical aid.
- Pay off your credit card debt. When you buy things on credit, you are betting on the possibility of future income. If that income fails to appear, your fears about being able to pay your debts will add stress to your life. You can reduce financial stress by only buying what you can afford to pay for in cash.
- Shop around for better rates on insurance. Keeping your home and car insured is important but often it is possible to get a lower insurance rate by insuring all of your items with one company. Call your insurance agent to ask about reduced rates for non-smokers, experienced drivers and a claims-free history.
- Build a “rainy day” fund. Putting savings into a “rainy day” fund of 3 to 6 months of living expenses will decrease your fears about not being able to pay your bills. You can build your “rainy day” fund by reducing your non-critical expenses such as restaurant meals and movie tickets.
- Set financial goals for yourself. Whatever the source of your financial stress, planning can help you gain control of what happens next. Make a list of all of the things you want your money to do for you. Then set goals for each that are measurable. For example, “I would like to have R5 000 saved for next year’s vacation by the end of this year.”
Remember to take it one day at a time, as with everything there will be good days and not so good days. Do not let a set-back throw you off course. Things happen and there is always tomorrow. Stick to your plan and don’t give up on your goals.
Date Published: 13 November 2015
