Stress is a silent killer. It makes you age prematurely and can go on to cause or worsen many health issues. It could, for example, increase your blood pressure and your risk of cardiovascular disease. That is stress on its own. Add in any of the unhealthy coping mechanisms and you have a host of concerns ahead of you. One of the things that people are most stressed about? Money and making ends meet.
Why Financial Stress Affects so Many
Financial stress is one of the most common issues that are faced today. This is particularly true considering that today a massive 64% of Americans are living paycheck to paycheck. This is due to inflation, which is still outstripping the rise in wages across the country. With higher costs of living and a minimum wage (and all subsequent wages) that is not keeping up, many are finding themselves feeling stressed over money.
Therefore, if you are in this situation yourself or just want to ensure that money stress can be a thing of the past, take on board this advice.
Always Have Your Backup Plan Ready to Go
You won’t be able to pay for every unexpected cost that comes your way out of pocket, even with savings. This applies to everyone, whether you have a lot of money or are living paycheck-to-paycheck. Having a backup plan means knowing where you can get money in a pinch and all the decisions have been made in advance. Your backup plan could involve taking out a personal loan, for instance.
A personal loan can help you cover costs of several thousands or even tens of thousands of dollars, depending on the lender. With some personal loan providers, checking in advance for prequalified offers doesn’t affect your credit score, either. This makes it an excellent choice for those who need to know where to go when they are in a bind before they are in that bind.
You can even take measures to improve your credit score if you find that your offers are either low or nonexistent. There are secured credit building loans designed for this specific purpose. Of course, if your credit score is low because you are dealing with a lot of debt already, then you will need to first address your debt and get it either forgiven or managed properly.
Manage Your Debts
The only direct loans that you can get forgiven by the federal government are your student loans. You can also, in extreme situations, declare bankruptcy.
For most, however, you are going to need to manage your debts and negotiate your debts. You can consolidate multiple debts into one, which allows you to pay it all off with a lower monthly repayment plan. Before you consolidate, however, making sure to negotiate your debt is essential.
To negotiate, know what you can realistically pay and then lowball it. Don’t agree to pay off a debt that you realistically cannot afford.
You may benefit from getting in touch with a financial advisor, especially if you have struggled with settling your own debts in the past. Being money smart means knowing how to manage your debt and get it sorted so that you can confidently manage the repayment costs. Only once you are in this situation where you can easily repay your existing debt without too much struggle should you then look to a personal loan as an emergency option.
Build Up Your Credit
In every situation building up your credit is a smart move. It will help improve your offers, expand your options, and, of course, can help you get a leg up on several milestones throughout life, from buying a car to getting pre-approved for a mortgage.
Start first simply by being on time with your bill payments. You may have the option to set up a direct debit with them, meaning that you will never miss a payment and have everything automatically sent out. This only applies to bills that are consistent month after month. For the rest, set reminders and prepare in advance.
This particularly applies to your credit card. Most credit card providers have a money management app that makes it easy to pay off your credit card debt fast. In exchange, you’ll get the benefits and be able to build up a lot of credit all at once.
If you don’t have a credit history, meaning that you are just starting out, you can boost your score using a variety of methods. Experian Boost works by looking at your utility, streaming payments, and other accounts that you pay monthly and adding that information to your credit report. UltraFICO also adds information that can help boost your credit score. It uses bank account balances, cash flow, and bank transactions.
The only downside with these two options is that not every company uses these bureaus or scores.
There are even credit building loans that you can look into. These personal loans are designed to help you build credit fast.
Start Being Serious About Your Savings
For those who live paycheck to paycheck, building savings can seem impossible. The only way to get out of this situation is to look at your costs and spending habits. If you notice you are spending way too much on frivolous items, then start by cutting those out. You would be surprised by how much you can spend on coffee-to-go in a month if you don’t monitor your spending.
For those that are already stretched thin and don’t splurge on little pick-me-ups, it is time for drastic measures. Moving somewhere more affordable, switching utility providers, changing phone plans, and the works, you need to do something that is going to save you a pretty penny and more. When you cannot afford to splurge on yourself and irresponsible spending is not the reason why you cannot save money, you need to look at your fixed costs.
Work out all the costs, including the new costs of your commute or utilities, before you make a change. With so many companies now offering remote, or at least flexible work days, many have the opportunity to move out of expensive areas simply because the commute was not feasible. Now you can work from home in a more affordable location, allowing you to save and enjoy a more comfortable work/life balance.
You should aim to save every month, even once you have reached a healthy emergency fund. Keep that emergency fund within easy reach, and then look into more effective savings accounts and even investments that can help your savings go further.