Stress Less About Your FinancesSubmitted by Financial Asset Management Corporation on November 25th, 2015
Numerous surveys and studies have found that money is the leading cause of stress for Americans. Given that money is a key component of establishing a secure life, it makes sense that financial challenges are associated with rising stress levels. However, it doesn’t have to be that way, and it shouldn’t. If you are part of the population who feels like they never have enough money, the following tips may prove helpful in building a better relationship with your finances to eliminate unnecessary stress in your life.
Log Your Account Activity
The first step to strengthening your relationship with money may be the simplest, yet the most overlooked. Keep track of how much money is credited to your account each month as well as how much is debited, or taken out. Keeping receipts and physically taking note of these numbers, whether on a spreadsheet or with pen and paper, will provide a visual path that allows you to clearly see how much you make and how much you spend.
As you chart the path of your income and spending, analyze your habits as a consumer. What exactly are you spending your money on, how much money, and how often? Comparing the sources of expenditures in your life may reveal that all of your money is put toward rent, grocery, utility bills, and car payments. On the other hand, you may come across some weekly or monthly expenses that you can cut out, such as cable TV, dining out, concerts, and unnecessary shopping sprees. While we all desire luxuries and enjoy pampering ourselves, extraneous spending should never cost us the necessities that truly make life comfortable.
Predict and Plan per Period
After gaining a sense of the typical course your money takes, the next step is to form a personal budget. The allotment of your monthly funds should be itemized by purpose and priority (i.e. housing, utilities, insurance, food, gasoline, clothing). There are several programs, such as Excel and other online tools that provide spreadsheet formats, which automatically calculate the sum of your expenses and the amounts you would like to budget for each category.
Within your budget, be sure to incorporate some personal savings amounts for retirement, college education, emergencies, and any other savings goals you may have. It is a good practice budgeting your savings in the beginning instead of waiting until the end of the month to see what is left over. Also, don’t neglect to account for irregular occurrences and unexpected expenses, such as gifts and automobile repairs. Proceed with logging your account activity, and determine if you are keeping to budget. Remember that it is okay to make changes, but consider alternatives prior to simply increasing your budget.
Apply the SMART Method
When setting financial goals, it is important that they are Specific, Measurable, Achievable, Results-focused, and Time-bound (SMART). Rather than simply setting a goal of reducing monthly spending by $500, focus on how you are going to cut out that amount. If you want to save $1,000, be sure you know what you are saving it for and how much time you are allowing yourself to meet that goal.
Consider the process of saving for a vacation. Establish the cost of your vacation, and make that amount your specific, measurable goal. Determine a sensible amount of time to achieve that goal (time-bound), and then search for ways to save money (results-focused).
Work with a Professional
For some, the idea of building a relationship with money is overwhelming. If that is the case, working with a financial professional may be the solution. A financial planner offers reliable, principled advice, which will assist in the construction of a reasonable budget for your lifestyle and in the foundation of practical goals for the road ahead.
At Financial Asset Management Corp. it is our passion and our greatest goal to help you fulfill your own lifetime goals, whether they be planning for college, saving for retirement, or managing investments. We strive to do so by demonstrating an integral commitment to our clients, taking responsibility to lead with a collaborative approach, and assigning personalized attention in order to provide services of the highest quality. Working with professionals will help you plan today so that tomorrow is secured.
Although money can be a major source of stress, you don’t have to be a statistic. By adhering to these tips, you will gain a positive outlook on money and find it easier to approach your finances in a constructive way. For further assistance in reducing your financial stress and strengthening your relationship with money, contact Financial Asset Management Corp. today.