Did you know that nearly 80 percent of Americans report living paycheck-to-paycheck? Whether it’s due to the pandemic, longstanding debt, or some other reason, it’s safe to say that a vast majority of Americans are at least somewhat stressed out by money, and what could possibly happen to them and their families in the event of an emergency or unforeseen event. Though conquering your money stressors is not a one-and-done task, the good news is that your financial stress can be tamed over time if you commit to a few good behaviors. Here are 3 pointers from finance author Rachel Cruze.
Take inventory of your bills.
Do you have a big stack of unpaid bills sitting on your dresser? Do they live in a dusty drawer or somewhere else where they can live “out of sight, out of mind?” If so, it’s time to confront them once and for all. You can’t make progress on your financial well-being without having a clear idea of what bills you owe. So, tackle the problem head-on and determine what you need to pay down.
Pay off all your debt.
Paying off your debts is the fastest and best way to alleviate your financial stress. Before you think that you can’t possibly pay off everything, check out this “debt snowball” method:
• Step 1: List your debts from smallest to largest, regardless of interest rate. Pay minimum payments on everything but the little one.
• Step 2: Attack the smallest debt. Once that debt is gone, take that payment and apply it to the second-smallest debt while continuing to make minimum payments on the rest.
• Step 3: Once that debt is gone, take its payment, and apply it to the next-smallest debt. The more you pay off, the more your freed-up money grows and gets thrown onto the next debt.
Many people spend money they don’t have in order to keep up with the Joneses. But, practicing gratitude for the things you already have – even intangible items, like a loving family – can help you put your spending into perspective. Remember: new purchases may feel good, but they pale in comparison to the rush you will feel when you get your financial life under control.
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