The last year has been quite difficult for everyone. Not only have we had to deal with fears of getting sick, travel restrictions, and lockdown orders, but many people have also been struggling financially. Research actually suggests that financial distress is at an all-time high in America.
This phenomenon has been explained by the numerous hiring freezes and layoffs brought on by the pandemic. However, financial stress has existed long before the pandemic. It can be caused by a number of things such as unexpected expenses, debt, or impulsive buying decisions.
Without knowing how to cope or find support, it can become even harder to get by. Though, it is possible to get through and live better than before. Let’s take a look at a few simple ways to take control of your personal finances.
Be honest with yourself
This may sound obvious, but many people truly don’t know how much being honest with yourself can help. After you make a budget and an emergency fund, it is time that you face up to some of the hard truths you’ve been running from. If you’re currently affected by financial stress, you’re likely in debt.
This means that you’re either spending more than you’re earning or you’re facing additional stresses such as supporting family members or friends. Luckily, it is so much easier today than it ever has been before to earn extra income. There are plenty of freelancing opportunities out there that pay well enough to earn some extra cash on the side.
You may also consider investing in stocks. Investing in stocks is a great way to get some more cash without having to spend extra time working. Click here to learn about stocks and if investing is the right financial move for you.
However, you must also learn how to manage your money. In the short term, it is far easier to manage your spending than to increase your income. Even if you earn well, it is good to learn how to manage your money correctly to ensure financial stress never occurs.
By being honest with yourself about why you’re experiencing financial stress, you can begin to take control of your personal finances.
Create an emergency fund
You’ve likely heard people going on and on about emergency funds. While you may be sick of it, it is hard to stress just how important an emergency fund can really be. An emergency fund is the perfect and most effective way to reduce financial stress within your life.
If you are either struggling with debt or finding it hard to get by, it can feel almost impossible or unrealistic to create an emergency fund. However, when people say every cent counts, they truly mean it. Even putting aside only $50 a month, you will quickly see an increase in your emergency fund.
To add more to your fund, you may even consider selling some books, clothes, or other valuable items you own. You should aim to have at least 3-6 months’ worth of expenses in your fund to ensure that if something were to go wrong, you have the money to cope.
The bottom line
At the end of the day, financial stress doesn’t and shouldn’t last forever. By implementing the tips above, you will be on your way to long-term financial success in no time at all.
