​Making smart financial decisions to worry less about money

September 2022

The world revolves around money, so it can be hard not to think about. In fact, not thinking about our money until it’s too late is a common reason we can end up really stressed about our finances.

In today’s blog we will look at some ways to help ease financial stress and make smart decisions around money.

Think about money differently

If we re-frame the way we look at money, we can get ourselves into a more positive mindset to deal with financial decision making. For example, instead of seeing money as something that is draining and stressful, we should instead look at it as something we can manage that can bring us certain comforts in life.

In many cultures, money is a heavy responsibility, and we are often regarded as more successful the more money we have. Or that people with stable jobs and a mortgage (or paid off home!) is the ideal framework to aim for financially. However financial wealth can come in many forms and if we are constantly thinking about living up to expectations, we are likely to let ourselves down.

One thing we can do is identify what financial wealth means to us as individuals, what our goals are specifically, what we want to achieve, and then go from there in creating healthy money habits that support the lifestyle we want for ourselves.

Make a realistic budget

Money stress can come from overspending and indulging too much. This is where a budget becomes helpful to help give you a sense of self-control and discipline around spending habits.

It’s a good idea to create a visual representation whether it be a spreadsheet or a physical hard copy of both your income/s and your expenses. Be sure to include non-essential items as well as essential bills and costs. Once you’ve analysed your incoming payments versus outgoing costs you can evaluate how much you have left over to either spend or save. You can keep this in a place where you can reference it often so you have a common reminder of your monthly expenses and what you can afford or are willing to sacrifice month to month. (Some months are more expensive than others as unexpected costs or large purchases occur!).

Create a saving goal

Within your budgeting document, it’s a good idea to reserve an amount that you are dedicated to saving each payday. It can be good to set up a low-risk savings account separate to your accessible account to transfer this chosen amount into. That way, in your accessible account you only have enough money that you require until your next payday. Resist the urge to transfer back out of your savings, think… ‘can this cost wait until I’m next paid?’

Set time aside to review your money

It can be mentally helpful to schedule in time to look at your finances. This prevents complete avoidance as well as obsessive checking and transferring of funds. By scheduling time you avoid looking at your finances in a highly anxious state and instead can feel more mentally prepared and neutral. It’s good to do this at set intervals when your spending habits are ‘usual’ like mid-week.

Check on your credit spend often

Talking about reviewing our spending, make sure not to charge to your credit card and then forget to look at what you have owing until it’s time to pay! This can cause stress when it comes time to pay, especially if have overspent. Check in weekly to ensure you are not over-indulging – this can be a part of your weekly scheduled review.

Focus on what you can control

Unexpected costs, or necessary large costs can seem overwhelming. But it is not worth stressing over things that you can’t control. Instead, focus on the aspects that you can control, like your budget. You can re-focus on where you can perhaps shave off expenses during this time, or if you have savings that you are willing to dip into during this period.

Work with professionals (if you can)

If you can work with a financial advisor, this can be worth it to help reduce stress and talk through your goals with someone who can help you reach them. This is especially helpful if you are planning on a big purchase like a car, a holiday, or a house. Or if you are planning for a family and know your budget will have to be adjusted.

Think of alternative income streams

Alternative income doesn’t have to come from another job you have to attend. Many of us only have time for the jobs we currently do. Other streams of income can come from investments such as stocks. It can be helpful to talk to a professional or someone with expert knowledge in these fields to help you make smart investments depending on the economic situation at the time.

Alternatively, if you have a passion, think about monetizing and sharing your skills as a service or product. This is applicable and great to do if you feel you have some spare time or can manage doing so without adding further stress.

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