Think back for 5 years. Can you recall an unexpected event that led to financial stress? Maybe a health crisis, layoff, leaky roof, or unexpected car repair? You’re not alone. Approximately 2/3 of households experience an unexpected event that negatively impacts their financial well-being. So it’s no wonder the most common cause of money stress is the feeling that you’re just one financial shock away from disaster.
So what can you do if you’re stressed about money?
Here is a 5-step plan to help relieve some of your financial stress:
1. Adjust your tax withholding
The average tax refund in the US in 2018 for example was nearly $3,000. This is on average nearly $250 per month. One way to increase your monthly net without having to earn more money is to adjust your tax withholding. But remember, comes tax time you won’t be receiving a big pay day from the tax office. But if it relieves some of your monthly financial worry, the adjustment could be worth it.
2. Start a surprise fund
A surprise fund has the purpose of helping you to get through small hiccups in your budget. The easiest way to start building a modest surprise fund is to set up automatic savings with your bank. Even if you save sock away $10 a week, that’s an extra $520 per year. You’ll be surprised how quickly your surprise fund grows and how you won’t notice the small amounts missing.
3. Negotiate Your Bills
It’s considered easy money because you typically only have to do it once. And if you’re successful, expect to save yourself an extra $20-40 every month. Think about all the recurring bills you have now that are negotiable: Internet, cable, cell phone and insurances are service providers that are willing to adjust their pricing in order to keep customers. It costs them far more to land a customer than it does to keep a current one happy.
There are several ways to go about negotiating your bills, do some research on Google and you’ll find scripts and other tactics that can walk you through the process for specific providers.
4. Cancel Unused Subscriptions
Subscriptions you set on auto-pay are easy to overlook. One easy thing you can do is set subscriptions so they don’t auto-renew. When you receive notification that your subscription is about to expire, that’ll give you a chance to gauge whether you need it or not. For current subscriptions, look through your credit card and bank statements to determine which services you’re signed up for and decide whether you want to cancel or not. Also identify services you’re doubling up on. Maybe one TV streaming platform is enough or you can drop the gym membership if you’re playing football or tennis 3 nights a week.
5. Check Your Bank Balance Daily
It’s easy to leave bills and bank statements unopened to avoid the pain of reality. You need to check your bank balance on a regular basis. Check it online once a day. You’re more mindful of how much you’re spending and where your money goes every week. The added benefit of daily checks is if you’re running low on funds, you can notice it before you become subject to additional overdraft fees. You’ll also see your spending habits and know if you have a particularly expensive month. If you’re spending a lot, you can make sure you slow down next month.
These are just a few of the ways you can lessen your financial worries. Be diligent about saving and keep a close eye on where your money goes. Then you’ll sleep better at night, too.
Sven Franssen