Protect Your Health (And Relationship) Against Financial Stress with a Budget Plan

Do these statements sound familiar to you?

  • I don’t know where my money goes every month.
  • I have credit card debt, but I have no idea how much.

Maybe you’d rather not know because it’s scary and stressful. No surprise there — money is the number one reason Americans are stressed and the number two cause for divorce. Stress can cause anxiety, depression, migraines, ulcers and high blood pressure, to name a few.

You can reduce your stress by getting your finances in order. These six tips can help you get into a more budget-conscious mindset. They are mental tricks and behaviors you can easily implement to make your financial planning a little less scary and stressful.

1. Get to zero credit card debt

Pay off your credit card debt and get to zero!

There are a few strategies to pay off debt. List all of your credit cards and the balances and APRs for each. This may be an eye opener. It’s good to know how much debt you’re in so you have a clear view of your starting. Try not to put more debt on your credit cards as you’re paying them off.

After listing your cards and balances, one strategy is to tackle the cards with the smallest balances first. This way, you can knock out the balances quickly and stay motivated to keep going. Alternatively, some people choose to pay off credit cards with the highest interest rate first.

Try increasing the amount you’re paying off each month by adjusting how much you’re spending elsewhere. There’s no right or wrong way to do it, as long as you’re paying more than the minimum balance and you’re paying it on time.

If you have lots of credit cards with different payment dates and high APRs, consider taking out a personal loan to consolidate your credit card debt. You’ll only need to remember to make one payment a month, plus you may get a lower APR, which can save you interest.

2. Scale back on the obvious

Just like dieting, suddenly cutting your spending can be really difficult. You don’t need to become an overnight expert at reducing your spending. Start with the easy stuff.

Making food, snacks, juices and coffee at home are easy ways to save money. Some other things you can do include:

  • Cancel subscriptions (such as Spotify, Netflix and magazines).
  • Limit how much you dine out at restaurants or bars. (Reduce it to once a month or eat at home until you pay off all of your credit cards.)
  • Limit or stop taking Ubers or Lyfts. (Bike, walk or take public transportation whenever you can.)
  • Stop buying clothes and wear what you already have.
  • Find cheaper alternatives for expensive cell phone plans.

3. Know your net worth, even if it’s scary

Get in the habit of checking your accounts on a weekly basis.

Take 10 minutes to gather all of your financial account (checking, savings, IRAs, credit cards and loans) logins and passwords in one place by using a free personal finance tools like Mint or Personal Capital.

Both tools show you your net worth.

Knowing this number can be a powerful reminder to set goals for yourself and stay on track.

4. Automate your savings

Set up your bank account so it automatically pulls your paycheck from your checking into your savings account. You may be able to do a version of this through your employer as well. Try contacting your job’s accounting or HR department to split your paycheck so a portion goes straight into your savings on payday.

This is more of a mental hack than anything else, but what you don’t see, you won’t spend. It also ensures you’re saving with each paycheck. Even if the amount is small, you’re at least creating a behavior of saving.

Bonus tip: Reevaluate using your big-name bank’s savings account, because you’re most likely getting less than 1 percent in interest. Online-only banks like Ally and Capital One 360 offer higher interest rates. At the time of writing, Ally’s savings account interest rate is 2 percent and Capital One 360 savings is 1 percent.

5. Don’t forget the “fun fund”

While you’re being responsible and putting your money in the right places, don’t forget to save for activities that help you relax and have fun. If you have an online savings account, you can set up “sub accounts” for free, which means you can label it based on goals (i.e., “Dream Travel” or “Date Night”).

This fun fund is about more than just saving. It helps you focus your spending on what matters to you, so you can be mindful about where your money is going.

6. Block out time to go over your finances

Open your calendar and schedule time on a regular basis to go over your long and short term goals, especially if you live with a spouse or partner. A short-term goal might be to pay off the last of your credit card debt, while a long-term goal might be to save for a house.

Check in to see how it’s going each week and keep the lines of communication open.

Budget bonus: Get a side gig

Increasing your income could be a good way to get rid of debt or save faster. Side gigs aren’t for everyone, but if you have the time and motivation, you may be able to reach your goals faster.

Side gigs can include foodservice, freelance writing, designing websites, babysitting, delivering for UberEats, driving for Uber or Lyft, or tutoring online. There are so many ways to earn extra money!

Having a budget is simply creating a plan that tells your money where to go. It also involves improving your behaviors around your spending and saving habits. When you have a plan in place — and stick to it — you can greatly reduce your money-related stress.

Claire Tak writes for Upstart about all things personal finance. She has a background in finance technology, and her work has appeared in major publications such as Forbes, Bloomberg and FOX News. Claire is based in Oakland, California and enjoys traveling in her spare time.

 

33 comments

Mia B
Mia B7 days ago

Thanks for sharing

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Barbara S
Barbara S10 days ago

tyfs

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Angela K
Angela K21 days ago

noted

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Mike R
Mike R26 days ago

Thanks

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Sherry Kohn
Sherry K26 days ago

Many thanks to you !

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Sophie A
Sophie A26 days ago

thank you for posting

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Ruth R
Ruth R26 days ago

Don't get into debt, it's that simple. A cousin of mine built his own house on weekends. It took ten years but no martgage needed.

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Naomi D
Naomi Dreyer26 days ago

I was taught how to budget at an early age and have continued all my life. Financial Literacy or Education must be taught from early ages and continue throughout life.

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Angeles M
Angeles Madrazo26 days ago

Thank you

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Christine D
Christine D27 days ago

My mother taught me how to budget when I entered my teen years and I have utilized one ever since. I've never had any debt except for a student loan that I paid back in 6 months after graduating university, and a mortgage that we worked hard to pay off early. I've even paid cash for all my vehicles because as soon as I get a newer one, I start saving for the next one.

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