Money stress how it impacts your health eBook by UHY Dawgen

Money Stress How It Impacts Your Life

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Stress is something that we have to live with. It’s a part of life and it can be helpful. When you experience danger, for example, your body releases hormones and creates a chemical response that gives you the ability to fight for your life or run like heck.

Unfortunately, many people experience stress on a chronic basis. When this happens, these stress hormones constantly flood your system and over time they wreak havoc. They can cause inflammation, high blood pressure, obesity, cancer and much more. Chronic stress can destroy your health.

One of the biggest causes of chronic stress is money. The vast majority of people worry about their financial situation on a daily basis. It makes them sick to their stomach to think about how they’re going to pay for their future. It causes headaches, arguments with loved ones, and chronic anxiety.

Chronic financial stress can cause:      

Depression Digestive problems Heart disease Sleep problems Weight gain Memory and concentration difficulties

Studies have shown that financial stress has a negative impact on families. People, including children, who live in an environment where there is financial stress tend to be less healthy than those with less financial stress. There is a direct correlation between financial stress and physical wellbeing.

As more people struggle with debt and the cost of living continues to rise as incomes stagnate and people lose jobs, it’s not surprising to also learn that financial stress is causing more problems for people across the country and around the world.

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There Are Solutions – There Is a Way to Overcome Money Stress There are simple and proven steps that you can take to overcome financial stress. It’s usually a planned approach of reducing expenses, shifting your mindset, and finding ways to earn a little more income. It’s about empowering yourself to learn more about where your money goes and how you can leverage it.

You can also gain some control over your money stress by learning to better manage stress.

There’s no single secret solution but rather several steps to take to overcome money stress and feel better about your financial situation.

Let’s take a look at how to feel more in control over your money and how to start taking positive steps toward healing your financial situation.

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Establish Your Financial Priorities One of the biggest causes of financial stress is when you have too many concepts demanding your attention. You need to save for retirement. You need to save for emergencies. You need to save for college.

Credit cards demand their payments, plus interest. You have rent or a mortgage. You might have student loans, a car payment - and let’s not forget the price of luxury utilities like cable television and a cell phone.

Expenses, commitments and desires all battle for your attention and it’s enough to make you throw your hands in the air and go shopping. To gain control over your finances the first step is to identify and establish your priorities.

Make a list Make a list of the financial responsibilities and goals that you have pulling at you. They might include things like student loans, retirement, car payment, rent, saving for a house, paying off credit cards, etc...

Rank the items The next step is to rank the items in terms of wants and needs. For example, if you’re paying off a loan or credit card debt, that’s a need. If you hope to save up a down payment on a home, that’s a want.

Prioritize and negotiate Taking a look at your needs, the items that you must manage, prioritize them in order of importance. For example, maybe paying off your credit cards is more stressful to you than your student loan. Also look for opportunities to negotiate with the lender. You may be able to get different payment terms for a student loan for example, and thus give you more cash to pay back your credit cards.

Prioritize your wants as well. What is the most important want on your list? What will help alleviate some of your stress? An emergency savings account for example, may relieve more stress than a down payment on a house.

Create a plan Once you have your priorities in order, it’s easier to create a plan to tackle them. You can focus your energies on your priorities. Sometimes all it takes to reduce financial stress is a plan. Next, we’ll talk about budgets. They’re the foundation of a good financial plan and can help you feel more in control over your money.

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Budgets Really Do Help The word “budget” seems to be a bad word to many. They hate saying the word and they dislike thinking about it even more. Why do we feel such animosity toward budgets? It’s probably because people feel that they’re restrictive.

When you create a budget you limit your spending. You allocate a predetermined amount to enjoying things like dinner out, new clothes, movies and nights out with friends. Another reason that people probably dislike budgets is that they force you to face reality.

You can see on paper how much money you have coming in and how much money you have going out. It can be enough to make you cry.

However, when you create a budget you also empower yourself.

You know the phrase, “knowledge is power”? It’s most definitely true for your finances, and a budget gives you knowledge about your financial situation. Sure, it may not be pretty. Yet once you have that knowledge you can begin to take positive steps to change your situation.

Creating your budget The first step to creating your budget is to find a system that you’ll use consistently. It’s not enough to create a budget today and then never look at it again. You need to be able to review it on a daily, weekly, or monthly basis and track the money. You need to be able to see if you’re over or under budget and then you can make better decisions about your money.

Budget systems range from grabbing a pencil and some paper and drafting one yourself, to using an online template, to using budgeting or accounting software. Use whatever makes the most sense to you.

The second step is to sit down and actually fill in the blanks. What are your monthly expenses?

How much do you make? How much do you have left over at the end of the month and where should that surplus, if any, be allocated?

Take a look at your financial priorities to help you decide this. For example, is your top goal to pay off credit card debt? Then that’s where your surplus should go.

The next step, once you have a budget, is to track your money. Know what you’re spending in your various categories and make sure that you’re sticking to your budget. For example, if you decide that you have $100 a month to dine out, then make sure you stick to that limit.

A budget doesn’t do any good if you don’t stick to it. Review your budget at least once a month and make adjustments. Your budget isn’t set in stone; it changes as your financial situation changes.

Next we’ll talk a bit about how you can shift your money mindset so that you feel more in control and positive about your financial situation.

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Change Your Money Mindset Ask just about anyone what their biggest stressor is and they’ll say that it’s money. Even the people who seem to be carefree and positive will admit to powerful money stress. How you feel about money and your financial situation can have a dramatic impact on your health and happiness.

There are simple steps that you can do to shift your mindset. When you do this, you can reduce some of the stress that money causes. And let’s face it, if you can approach your financial situation with a more positive attitude, you might be able to make better decisions about how to manage your money. You won’t be so emotionally connected to the outcome.

Gratitude One step you can take to feel more positive about your financial situation is to feel more gratitude for what you do have. When you focus on what you presently have, you’re less focused on what you don’t have.

For example, if you’re grateful for the car you drive, you’ll be less likely to want a new car. If you’re grateful for the house you live in, you’ll be less likely to want to move into a bigger and better house. When you start feeling stressed about money, focus on gratitude.

Limiting beliefs What are some thoughts or beliefs that you have about money? For example, did you grow up hearing “The rich get richer and the poor get poorer” or “Money doesn’t grow on trees”? These sayings are limiting. They don’t give you a positive feeling about money but rather make it feel like a scarce commodity.

If you have limiting beliefs about money, think about where they came from and if they’re actually true. Replace your limiting beliefs with empowering and positive statements like, “I am so grateful for all the money I have now” or, “I embrace positive new beliefs about money.”

Take small and positive action A third way that you can begin to shift your mindset about money is to begin making positive changes in small ways. For example, start paying for things with cash. Begin saving all of your loose change in a jar. Buy used instead of new when you absolutely must buy something and replace spending habits with good self-care habits.

You’ll begin to shift how you approach your finances and your mindset toward money. As you become more positive, your spending will change and your stress level will lessen.

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Next, we’ll take mindset and lifestyle to a new level and talk about the benefits of a minimalist lifestyle. There are simple steps you can take to begin reducing your expenses and enjoying life more.

Embrace a Minimalist Lifestyle The minimalist lifestyle is gradually taking hold in many households. People are attracted to a life with less stuff and more freedom. If you are trying to overcome money stress, the minimalist lifestyle might be for you. Let’s talk about what it is first and then provide a few steps to begin to embrace this way of life.

What is a minimalist lifestyle?

Minimalism is a way to leave consumerism, material possessions and clutter behind. Instead of focusing on things, you focus on what provides your life with meaning and purpose. You focus on what gives you joy. The movement became popular as a way to escape debt, distractions, clutter and noise.

Minimalists often live comfortable yet uncluttered lives. The material items that they do own have purpose and meaning to them.

Embracing a minimalist lifestyle The first step to embracing this lifestyle is to start removing clutter and possibly downsizing your life. Begin making your way through your closets and storage areas and getting rid of the items that you don’t need or use. You can donate them. However, if you have financial stress, consider selling your items. Earn money as you remove clutter.

Downsizing is the process of reducing your needs. For example, you might sell your Cadillac and buy a used fuel efficient car. You might sell your 3000 square foot home and move into a 1500 square foot home in a less expensive neighborhood. Determine what you need in life and clear out the excess.

The next step to embracing a minimalist lifestyle is to change your shopping habits. Instead of shopping as a habit, shopping should happen only when it’s essential. You only buy what you need and your concept of “need” might change. For example, if your jeans get a hole in the knee, do you need a new pair or can you mend the jeans with the hole?

Minimalism doesn’t mean shabby or cheap or boring. It means cutting back and only bringing into your life the things that you need. And when you really think about it, we don’t need much to be happy, right?

In the next section we talk about the other side of the financial coin, your income. We’ll explore opportunities to increase it.

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Tips to Increase Your Income There are many different causes or components of financial stress. Ultimately, it all boils down to more money going out of your bank account than is coming in. One solution is of course to reduce your expenses.

You can also take steps to increase your income. It doesn’t have to mean taking on an additional, regular part-time job; there are simple things you can do to increase your income.

Sell your stuff You can remove clutter from your home and your life and profit in the process. Sell your gently used items at consignment stores, via auction sites, on Craigslist, or in a yard sale. Some retailers like Amazon also offer store credit on trade-in items.

Become a service provider Do you love to teach? Are you an animal lover? Are small children your favorite people to be around? You can earn extra money by tutoring, walking dogs, house sitting, and babysitting. It’s a simple way to earn a little extra cash.

Freelance If you have specialty skills you can freelance to bring in some extra cash. From writing and design to coding and administrative work, there is a huge demand for freelancers. You can even become a consultant and earn extra cash.

Ask for a raise It’s worth a try, right? Work hard and position yourself as an asset before you ask for the raise and then go into your boss’s office with your head held high and present your case.

Start an online business It’s easy to start an online business and there are many opportunities to do so. You can become an affiliate marketer and blog about products and services that you love. You can blog and make money from advertisements. You can also create and sell specialty information on a topic that you enjoy talking and writing about.

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Finally, consider looking for unique opportunities to make a little extra cash. It all adds up. You might join a focus group and earn money for your opinions. You can teach a class locally or online and charge a small fee. You can even write a book and self-publish. The opportunities are all around you. Choose the one that seems the most interesting and start adding to your income.

One step that alleviates a significant amount of financial stress is an emergency savings account. Let's take a look at what that is, why it’s so powerful, and how to create one.

Create an Emergency Savings Plan When your money is tight almost anything can feel like a financial crisis. Your car needs new tires; that’s a $1000 financial crisis. Your water heater explodes; that’s a financial crisis. You need to fly home to take care of a loved one; yep, you guessed it – financial crisis.

And suddenly not only are your finances in turmoil, your stress meter has just skyrocketed. You have to figure out how to find the money to cover the surprise expense. It often means borrowing and incurring debt. This causes more stress and sets you back on your financial goals and plans.

An emergency savings account can completely eliminate this stress. When you have a little money set aside for emergencies, and you only touch it when there is a true emergency, life’s little surprises lose their impact. You no longer stress about your ability to cover the expense.

You use your emergency savings fund, avert the crisis, and live to save another day.

Creating your emergency savings fund This type of fund should take priority over all other financial goals. It doesn’t take long to save up and it really can make a difference in your life. Decide what a reasonable emergency savings fund should be. A good rule of thumb is to have $500 per person in your home.

If you have a four-person household then the minimum savings in your account should be $2000. It’s also important to look at what’s possible. If you can set aside $500 a month for six months, then do it. If you can only set aside $50 a month, then that’s your plan.

Shift your finances so that you’re only making minimum payments on credit card debt if you have to until your emergency account is funded. Once you’ve reached your goal, stop adding money to your emergency account and shift it back to debt and other savings goals.

It makes sense to fund your account as fast as you can. You might use any income tax returns to fund it or sell a few items that you no longer use to get the ball rolling.

When it comes time that you have to use the money (remember it’s for emergencies) then quickly refund the account as soon as possible. You want to always have that backup ready and waiting for you.

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If you want to reduce your money stress, an emergency savings account is a must. Another critical step to making your finances easier is to automate as much as possible.

Automate Your Finances Technology has come a long way in the past few years. You can now monitor your bank accounts, make transfers and pay bills right from your smartphone. You can even pay for items simply by using your thumb print on your phone.

You can use the technological advances to simplify and automate your finances. Let’s start with a question: Have you ever missed a payment because you forgot about it?

99% of the people you ask will answer “yes” to this question. When you miss a payment, your cash flow is messed up. You pay late fees and it can derail your budget and your confidence.

And if you miss more than one payment, it can hit your credit score and impact your interest rates and your ability to get a loan.

You can set up automatic payments with just about every bank and account you have. Even your utilities probably have an automatic payment option.

Take this step. Go through your accounts one by one and automate each and every payment possible. Keep your budget by your side as you do this and know when you have money coming into your account and when it’s going out.

For example, if you schedule all of your payments to be paid on the first of the month, you might overdraw your account. Then you pay overdraft fees. Make sure you are able to spread out your payments so your cash flow stays positive.

Automate reminders too. In addition to automating payments, many companies allow you to receive payment reminders. This can remind you that the money is being taken out of your account on a specific day. It can also let you know that a payment is due for accounts that don’t support automatic payments.

Automate your savings too In addition to automating your bill paying, consider setting up an automatic savings plan. Some companies support savings that comes right out of your check before you receive it. This is a great way to stay on track with your savings goals, particularly retirement savings.

You can also set up automatic transfers from your checking account into a savings account. The money is automatically dedicated from your account and you don’t have to worry about it.

Leverage technology to make your finances easier. Automate your bills so you never miss a payment or pay a late fee ever again. Automate your savings so you stay on track to achieve your goals.

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Next we’ll take a look at some key ways to reduce your expenses. The less money you have going out, the easier it is to save and pay off debt.

Nine Tips to Help You Reduce Your Monthly Expenses It goes without saying that if you have less money leaving your wallet, you have more to work with. You can save money, pay off debt, and feel much less stressed about your current financial situation. Here are some key tips you can use to help reduce your monthly expenses.

1. Get a roommate – If possible, consider getting a roommate to help pay your rent or your mortgage. It can help defray your costs and make saving and paying off debt much easier.

2. Downgrade your luxuries – Do you have a cell phone? Why not cut back to a less expensive plan? Do you have cable television? You can cancel it or cut back to a less expensive plan.

3. Negotiate your interest rate – Credit card debt can consume a lot of your monthly income and if you’re paying high interest rates, it can feel near impossible to catch up. Ask your credit card companies for a lower interest rate. The money you save can really add up.

4. Clip coupons – It takes a little time and planning; however, clipping coupons is something that you can do while you’re watching television or unwinding at night. You can save hundreds of dollars off your grocery and household budget each month.

5. Buy from the mailer – Each week your supermarket announces sales on produce. Use those sales to plan your meals and shop based on what’s on sale. It’s just one more way to save on your monthly food costs.

6. Buy used – When you do have to buy something, consider buying new instead of used.

You’ll have to do more homework and make sure you’re buying a good product from a reputable source. However, used can save you a lot of money. For example, you can buy a refurbished tablet computer for hundreds less than a new one.

7. Downscale your home – Consider moving to a smaller place with a lower rent or mortgage. Saving even a few hundred dollars a month can really add up over time and it can dramatically reduce your financial stress.

8. Downscale your car – If you live in an area with good public transportation, consider selling your car. There are car memberships you can join for a few bucks a month that allow you to use a car when you need it. It’s much more cost effective than owning a car. If public transportation isn’t an option, consider downscaling to a less expensive car that gets good gas mileage. You can at least save money on car payments and fuel costs.

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9. Have dinner parties instead of eating out – If you are social and spend a good chunk of money going out with friends, consider hosting dinner parties instead. You can alternate houses and each person can host one party. Everyone saves money and still has a great time.

These are just a few of the many ways that you can save money each month. Look at your budget and evaluate ways that you can cut back. It all adds up and no small savings is too little.

We’ll finish by taking a look at how to create systems and processes to achieve your financial goals and stay in control over your money.

Recognize Your Financial Success – Creating Financial Systems As you begin to take positive steps to change your finances for the better and to look at your current situation more positively, you’ll achieve small successes. Each success, if you recognize it and celebrate it, can help you gain momentum.

For example, if your proximity goal is to pay off your credit card debt, each payment you make that is more than the minimum required payment, is a success. Take a minute to acknowledge that success. When that card is paid off, take a few minutes to celebrate. Do something nice for yourself to acknowledge your achievement.

Create systems and processes for more financial success It’s much easier to recognize your finical successes if you have systems in place. Creating your monthly budget is a system. Setting up automatic bill pay is a system. Creating reminders for yourself and automating your savings are systems as well.

Each system helps position you to anticipate, create, and recognize financial successes. For example, if you get a reminder that you have a bill due, you can look at your budget and your current cash flow. You might be able to pay a little more on that bill than normal and help reduce your debt. That’s a success.

Organization matters One of the reasons why budgets are difficult to keep is because people are disorganized. Keep your receipts in one location. Try to use cash only or one payment source to keep all the information in the same account.

The more organized you are, the easier it is to stick to your systems and to feel in control over your finances. When you’re in control, you’re less likely to feel overwhelmed and stressed.

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Get help Finally, you don’t have to go it alone. If you’re feeling stressed and overwhelmed by your finances, there are resources. Get help building a plan to pay off debt, save more money, and reduce your expenses. Get help setting up a budget and automating your accounts. There are experts who can help you create good financial systems.

Financial stress doesn’t have to be part of your life. There are simple steps you can take to gain control over your life. You can live better on less, create systems that support you, and shift your money mindset.

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