Preventing Financial Stress
One of the leading causes of stress for most people is money problems. Severe financial stress can be psychologically, emotionally, physically and (obviously) financially debilitating. Having massive debts or not having enough money to afford the things you need is usually the cause of financial stress. Living life with a massive debt hanging over your head is unpleasant to say the least, especially when people start coming to demand their money. Here is some advice on how to prevent financial stress before it reaches a critical stage when it can no longer be resolved easily and people start throwing around words like “bankruptcy” and “collection agencies.”
Don’t be a Debt Beat
Debt in itself is actually not a bad thing. In fact, without credit and debt, you wouldn’t be able to make major purchases like buying homes and cars without cash in hand. Taking on small or reasonable amounts of debt that you are confident you can pay back is okay – although you should still avoid it whenever possible. Debt becomes a problem when it’s overwhelming and you have no way of keeping up with your payments. In order to prevent financial stress caused by debt, you’ll need to know if you have too much debt. Some warning signs that indicate you may have too much debt include not having any savings, only paying the minimum amount due each month on your credit cards, making purchases on your credit card while still owing money from previous months, lying about your finances, bouncing checks, paying bills late and not knowing how much debt you have.
If you find yourself meeting several of the above criteria, you need to take action now! The first thing you should do is make yourself a budget. A budget is a guide that will help you structure your spending appropriately. Instead of casually spending money on things you may not need, a budget will help you prioritize and cut down on overspending. Budgets are also really useful as they allow you to set aside money for unexpected expenses that would ordinarily cause you to go into debt because you had no other way to pay for it. When you do your budget each month you will have to make sure you set aside money for all your most important recurring bills first; things like car insurance, life insurance, rent or mortgage, food, cable, and telephone etc.
Where To Go From Here
If you find it hard to restrain yourself from overusing your credit card, either cut it up or leave it at home when you shop. Many people find that only using cash helps cut down on how much they spend since they can actually see the money they’re spending instead of just getting impersonal bills at the end of each month. If possible, pay your credit card balances in full each month and on time in order to avoid additional fees. If you owe money on a credit card with a high interest rate, you can try calling the company and asking them to reduce the rate. This probably won’t work, however, unless up until this point you’ve been relatively good about paying your bills on time. In addition, in the future, make sure not to get a credit card with such a high interest rate.