The burdens of managing one’s finances can put a tremendous amount of stress on even the most easy-going person.  Whether you make $10,000 a year or $10 million, there are some straightforward steps you can take today to ease your personal and/or professional financial stress.  All it takes is some commitment, honesty, and a little bit of time.

  1. Organize.  You should have a system in place for managing incoming bills and other paperwork related to your finances.  Some people prefer the conventional pencil and paper method, while others use software such as Quicken to track their income and expenses.  You may like to pay your bills online through your bank’s website, or you might want to write and mail checks to each payee.  The best solution is the one that you feel most comfortable using and is efficient for your needs.  Furthermore, make sure you have a set place for where you pay your bills and a regular schedule of when you do it.  For most people, twice a month is sufficient, but you have the freedom to create your own schedule.  Tip:  If you pay your bills online, consider taking advantage of the easy pay feature that your bank or payee probably offers, in which the amount is automatically deducted from the account of your choosing whenever a payment is due.  This works best for bills that are generally the same amount each time, such as a mortgage or auto insurance payment.  By having an organized system in place, you won’t have the stress of overdue or forgotten bills.
  2. Track.  In order to further reduce stress, you need to have a full picture of your financial situation.  The first step is by tracking where every penny goes so you can get an accurate picture of any overlooked expenditures.  For example, that $3 latte may not seem like much when you stop for it a few times a week to start your day, but by tracking even small purchases like that one, you may find that you’re spending the equivalent of a week’s worth of gasoline by the end of the month.  How about investing in a cappuccino maker instead? It may wind up costing you less in the long run.
  3. Set goals and plan.  Now that you know where all your money is going, set both short-term and long-term financial goals.  Perhaps you want to save up for a summer vacation; that would be a short-term goal.  Saving for your children’s college education or your own retirement, however, would be a long-term goal.  Using your current income and mandatory living expenses, plan for the life you want to live.
  4. Budget.  You’ve organized your finances, tracked your expenditures, and set your goals.  Now it’s time to create your budget.  Most people work out a monthly budget, including your income, living expenses, and a discretionary fund for spending money.  Decide what you need to do to live within your means.  Refer to your budget often and adjust it as needed.
  5. Find a part-time job. Doing something that takes a few hours per week can help you supplement your income and reduce financial stress. Consider your family’s schedule, and when you might be able to work. Would a set schedule work better for you, or is flexibility important? Do you want someone to give you a schedule, or would you rather set your own hours? Making these decisions will help you find a part-time opportunity that can help you reach your financial goals.

The key to reducing financial stress is knowledge.  It may not always be easy to take a hard look at exactly where you stand, but it is essential to meeting your personal and professional goals.

How do you reduce the stress of finances?  Please share your ideas with us below!