30% of Americans are stressed about money constantly, CNBC reports. In a survey conducted by Varo Mobile, 66% of adults are stressed because they don’t have a three-month emergency fund and 46% say it’s because they don’t have any savings for unexpected expenses like job loss or unexpected bills. Financial stress can take its toll and affect other areas of life, including relationships, work, and home life. Taking steps to improve your financial situation and reduce stress will leave you better able to focus on other important aspects of life and relax. Here’s how you can reduce your financial stress, get in control of your finances, and find it easier to function and thrive every day.
Create a household budget
Budgeting is the number one way you can get in control of your finances, yet only 32% of Americans maintain a household budget. Start by planning one month of household expenses. You can then figure out ways to cut back each month until you find what works. In addition to rent or mortgage payments, a household budget should include household maintenance and repairs, along with renters or homeowners insurance — collectively accounting for roughly 30% of your income. 10% of your income should cover utilities like gas, electricity, water, TV, and internet. You can then use extra money for debt or savings.
Consider a cash-out refinance
If you need some extra cash to make a meaningful purchase or investment (or to pay off a lingering debt), a cash-out refinance can help ease your financial stress. A cash-out refinance means your existing home loan is replaced by refinancing with a larger commitment at a lower interest rate. While you can use the extra cash to pay for anything you need, it’s wise to use the money on projects future buyers will see value in as well as your family. Home improvements are a popular use for a cash-out refinance since they’re a smart way to increase your home’s market value — this makes it easier to recoup your investment when you sell your home.
Make positive changes
Proactively look at what you can do to change your financial situation. If you’re in the habit of overspending, look at ways to cut back. Start with small changes at first. You may even find it useful to join a support group like Shopaholics Anonymous to help you curb a shopping addiction. Alternatively, you may want to get a higher-paying job by deciding to pursue further education. Remember it doesn’t have to be all or nothing. If you overspend one week, get back on track again by sticking to budget and working on making positive changes.
Finally, you can always look for outside help if you need it. For example, signing up for a money management class can help you learn to budget and a financial planner can help you save for your long term goals. Getting outside help to tackle your financial issues can provide you with solid advice and a fresh perspective. You’ll feel less overwhelmed and more able to set and reach your financial goals.