We all have stress in our lives, especially when dealing with money. But there are habits you can incorporate into your life that will reduce money-related worries. By applying these tips, you can be well on your way to gaining control of your finances.
- Quit comparing yourself to others. This is the most damaging money habit we have. Comparing yourself to others not only steals your joy, but also your paycheck. If you don’t get comparison spending under control, it’s easy to spend more money than you can afford in order to live a lifestyle you think everyone else is living and that you’re missing out on.
- Steer clear of debt. When you have debt, you don’t get to decide what you do with your money. You lose the ability to make your own choices about your finances. Debt can’t be part of your plan! You must avoid using credit cards or getting car loans and student loans at all costs. Instead, save up and pay cash for items so you don’t have to worry about the debt they bring.
- Make a plan for your money. Many people think that having a budget means having no life at all, but that’s just not true. The purpose of a budget is to give you freedom — with some boundaries. Create a written budget at the beginning of each month. Figure out how much income you have to work with and list every expense you have. Assign every income dollar an outgo name. This is called a zero-based budget and it works!
- Save for emergencies and the future. It’s important to make saving a priority, because having nothing in savings adds to the stress during crisis moments. That’s why having a $1,000 starter emergency fund is key. After you pay off all your debt, increase that to three to six months of living expenses. It’s also important to save for big life events like weddings and retirement. The sooner you begin putting money away for these things, the more prepared you’ll be when it’s time to pay for them.
We all want a life without added financial worries. By taking these key steps now and creating good financial habits in your life, you can feel confident and less stressed about your finances in the future!
*Rachel Cruze is a seasoned communicator and presenter, helping Americans learn the proper ways to handle money and stay out of debt. She co-authored the #1 New York Times best-selling book Smart Money Smart Kids with her dad, Dave Ramsey. Her new book, Love Your Life, Not Theirs, releases October 2016. You can follow Rachel on Twitter and Instagram at @RachelCruze and online at rachelcruze.com, youtube.com/rachelcruze or facebook.com/rachelramseycruze.