Financial stress can happen to the best of us where we are feeling concerned with money and worrying about how we are going to pay the bills. It’s becoming increasingly common for high income earners to be financially unstable and stressed out over money.
Financial stress has a negative effect on your body and overall health, so it is important to manage that stress in healthy ways. Part of managing financial stress is to take control of your money situation and get out of debt and move towards a place of financial security.
Lack of money
Is it truly a lack of money that you are facing or is it the fact that you have overspent and put yourself in this situation? This is where you need to be honest with yourself.
A lack of money is not having enough money to pay for your basic necessities such as rent, utilities, food, clothing, and health care.
When you have overspent it means that you have enough of an income to meet your basic needs but are spending too much money on satisfying your wants.
When you are honest with yourself and see how you have caused the financial stress in your life through overspending, you can create financial goals to get out of debt and start living within your means.
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Financial problems
Financial problems arise when you spend more money than you bring in. This habit accumulates debt, and it can become overwhelming when you can barely afford to pay for your necessities and keep up with minimum repayments on debt.
It costs money to borrow money, and if you are in credit card debt, those high interest expenses can make you feel like you are drowning.
You need to own up to where you are now and where you would like to be. If you want to get out of debt and move to a place of financial security and freedom, you’ll need to do the work. It’s not easy and it requires discipline, but I know you can do it.
How to stop worrying about money
When you are lacking money, it can be very difficult to stop worrying about money but gaining back your financial control will help alleviate the stress you are feeling. Having a financial plan helps takes the stress and worry out of money because you create a plan that is mapped out around your personal financial goals, and you work towards that goal.
Having financial goals in life gives you purpose. When you create financial goals that are important to you, it helps you remained focus on your journey from being broke to getting wealthy.
How to cut the financial stress and get out of debt
Debt drags us down. It costs a lot of money to carry debt and drains our personal net worth.
The best financial advice you’ll get is to not carry debt, so if you are in debt, it’s time to get yourself out of debt.
How to get out of debt fast
There are many ways to get out of debt, and how many you choose will depend on the urgency of the situation. From quick cash infusion to creating a long-term plan, the most important thing to do is get out of debt and stay out of debt.
Once you are out of debt you will need to work on changing behaviours and getting comfortable living with no debt.
Here are my top tips to getting out of debt:
1. Create a budget
Planning your money and knowing how much income you bring in every month, how much money you allocate to cover your necessities, how much to allocate to debt repayment and savings, and how much you have left over to spend is important. This gives a plan for your money and helps you to live within your means. When you are spending more money than you bring in, you will need to either cut your expenses or find a way to increase your income.
2. Create your debt repayment plan
When you have debt, you need a plan to pay off that debt. Using a debt repayment calculator will help you create a plan. You can pay off the most expensive debt first while working your way down the list. The debt repayment calculator will help you calculate how much you can pay while meeting the monthly minimum payment of all debt, how much interest you paying on your debt, and how many months it will take to be debt free.
3. Sell items you no longer use
When you are looking for a quick cash infusion, have a look around your house and sell items that you no longer use. Have a garage sale or sell them on marketplace. People are always looking for used items that are in good condition. When you sell items you no longer need it helps you declutter and feel better about your financial goals. You can use that money and put towards your debt repayment. This will allow you to get out debt much earlier.
4. Get a side hustle to create extra income
If you have extra time a great way to pay off debt sooner is to bring in more income. You can start a side hustle that brings in money, get a part time job, or anything you can think of to bring in extra money. You can get as creative as you’d like. But the key here is to ensure you use that extra money to pay down debt.
5. Cut up plastic and only pay cash
In our plastic economy this may be a tough one, but worth the effort. Studies have shown that it is psychology harder to part with cash than it is to swipe plastic. So put the plastic away and start using cash. You may find that you spend less money this way.
6. Find ways to save money on your daily expenses
Coupon clipping, shopping sales, price comparison shopping and finding ways to reduce cable bills, streaming services, insurance payments, and the list goes on. Finding ways to save money is a great way to spend your time that would otherwise be used for shopping and excessive spending. When you call to get your bills reduced, you’d be amazed at how many deals and how much money you can save. All that saved money can go towards paying off debt.
7. Use the envelope system
The envelope system is where you put the cash that you have for budget for that month and only pay cash. When you run out of cash for that month it means that you no longer have money to spend. This helps with managing your money as you see how much money is remaining in your envelope and makes you make conscious decisions about where you are choosing to spend your money.
8. Live within your means
This is the number one tip that everyone, even millionaires, need to live by. Do not overspend. Living within your means means that you do not spend more money than you actually bring in. You may be wondering how millionaires can possibly overspend, but nobody is immune to overspending. The more money you make, the greater your expenses are. Be mindful of the money you are spending.
9. Create savings goals
When you have goals, it gives direction for your money. The goals give your money a job. Financial goals that you may be saving for include vacations, down payment for houses, education, investing, retirement, cars, or anything you need or want.
10. Reward your milestones
Be sure to reward your progress to help keep you motivated. The rewards can be as simple as a walk on the beach, an outdoor concert, a pedicure, or whatever feels good to you. Don’t make your milestone celebrations centred around spending money, rather celebrate your accomplishments towards your goals. This can help you stay motivated.
11. Stay positive
There will be challenging moments on your journey to being debt free, so it’s important to stay positive and motivated. Try not to get down about the situation and envision what life will look like when the debt is paid off and you have financial freedom.
The bottom line is paying off debt can be a challenge but staying out of debt takes discipline. You will need to resist the temptation of getting back into debt. The best way to do that is to find new hobbies and routines that keep you away from old spending habits.
Being concerned about money can turn into something positive after the debt is paid off. You can create financial goals that work to financial security.
If you need help getting out of debt and creating your personal financial plan, register for the Debt Repayment mini course. For only $7 you get a personal debt repayment calculator along with video instructions on how to complete the plan. Click here to purchase!
