Managing Financial Stress: Your Tips to Make Your Best Money Decisions Yet
April 09, 2021
Stressed about your finances? We’ve all been there before, but there’s a better way. If looking at your recent bank statements makes you shiver with dread or you’re just tired of checking your accounts twice before making a purchase, you can change the way you approach finances in 2021. Check out our best tips for managing financial stress to flip the way you see finances.
Tips for Managing Financial Stress
Approximately 64% of Americans reported feeling stressed about money according to a 2020 Stress in America survey. Are you one of them? Make your own life easier by following these simple tips that are way easier than freaking out when you get a notification from your bank. From starting with the financial basics to saving money so you can pay off debt or make a big purchase, these tips will help you get your financial future back on track.
Let’s Start with the Financial Basics
- You plan out everything else in your life (probably in a color-coordinated calendar), so treat your finances the same. Add reminders to pay your quarterly taxes or pay off a percentage of your debt. You can also add in dates to check up on goals.
- Pay attention to interest rates so you can prioritize paying off specific debts and loans. Need a starting place? You should pay off your loan with the highest interest rate first. Put “good” debts
(like mortgages or student loans) on the back burner while you pay off “bad” debts (like personal loans, credit card debt, car loans, or pay advance loans).
- Set a budget. If you haven’t taken the time to make a budget yet, don’t worry because it’s a simple process. Calculate your monthly income and pick a budgeting method like the 50/30/20 rule. Set aside up to 50% of your income for necessary spending, allow 30% for wants, and leave 20% of your income to savings and debt repayment. By abiding by these simple budgeting guidelines, you can save what you need while still having enough to splurge.
- Set aside an emergency fund. When you’re budgeting your monthly income, you can place a specific percentage of money into a specific savings account. Not sure how much to save? Experts recommend having at least $1,000 in your emergency fund until you’re out of debt and then aiming to have three to six months’ living expenses saved. If building your emergency fund seems overwhelming, start by putting aside a small amount—even $10 will help.
Save Like a Pro
- Track your spending. It can be easy to let small purchases rack up without noticing how much they cost. We’re not saying you need to give up your coffee shop run, but you should start keeping a daily list of how you spend your money. You’ll see how much money you’re burning through every week and, bonus, you’ll have an easy list of potential deductibles to go through when the 2021 tax season rolls around. Whether you choose an app or go the old-fashioned way and write everything on your phone (or the really old fashioned way with a pen and paper ledger), this is a great first step towards savings.
- Make specific financial goals that are small and short-term. One of the biggest causes of financial stress is the fear of not paying off financial debt or not saving enough for retirement. Create a specific financial goal (like paying off a percentage of your debt or taking a trip) and then break it up into bite-size chunks.
- Consider all-cash spending. With an all-cash diet, you’ll be able to visualize exactly how much you’re spending and break out of your ruts. Whether you go completely card-free for a set amount of time or you only use cash for specific categories like eating out or shopping, this can break you out of an overspending rut.
- When you’re paying off debts, start with the small debts. You wouldn’t run a marathon if you haven’t run a mile, right? You can do the same with debt by paying off little debts. You should still prioritize “bad” debts over “good” debts, but starting with smaller debts can give you the motivation you need to pay them all off.
- Avoid temptation. Is your closet full of impulse purchases that haven’t seen the light of day? Stop making financial decisions that are detrimental to your overall budgeting goals by avoiding shopping or by removing yourself from your favorite brands’ email lists.
Choose a Bank that Has Your Back
Managing financial stress is a lot easier with a bank that prioritizes looking out for you instead of working against you. Join Flyp, the better banking solution that’s teaching you how to make the system work for you. We want you to manage your financial stress and look at money in a new way. Now you can, with a bank that offers a no-fee spending account with a debit card, free overdraft protection up to $100, and a rewards program that offers up to 110% cash back.
Join the waitlist today and Flyp the odds in your favor.
Flyp is not a bank. Banking services provided by Sutton Bank, Member FDIC.