We all have them: financial worries. They can keep us up at night and leave us feeling uneasy about whether we’ll have enough money to do what we want. The money worries that are the scariest are the ones we can't control, like job security. Or you might regret that you didn’t save more in the past and you wonder if it’s too late to make up for it now.
Unfortunately, financial worries won’t ease up if you only focus on the things that are out of your control. Instead, you can improve your financial situation - and plan around some of your current fears - by taking a good hard look at what you can control. Identifying those areas of your financial life is the first step. After identifying what you can control, you can create a plan and take action where an impact can be made.
Here’s are some strategies for how you can start making a difference with your money right now to reduce financial stress. (For more, see: 5 Ways New Investors Can Reduce Stress.)
1. Invest Strategically and With Confidence
You can’t necessarily control the market. But you do get to decide where your money goes within it. And a strategic investment plan set to your goals, needs, risk tolerance and opportunities gives you a lot of control over your wealth. If you’re worried you won’t have enough money to live out the lifestyle you want (now or in the future), investing appropriately can help solve that problem. Here is what you need to consider:
- Whether your passive investing strategy is too passive, causing you to miss out on investment opportunities in long-term mega trends taking place globally, including artificial intelligence, virtual reality, the internet of things, robotics, gene sequencing, 3D printing and blockchain.
- If your investment strategies are designed to help improve your life and are properly linked to your investment goals and lifestyle objectives.
- If your financial advisor is aware of and up to date on new and disruptive technologies and trends, including blockchain, bitcoin and other digital currencies.
Getting the right investment portfolio in place can do a lot to ease your financial worries, because you can trust that your money is working hard for you - just like you work hard for it.
2. Avoid Overspending
It’s a simple fact of financial life: if you spend more than you make, you’re going to be stressed, struggling and unable to sustain your lifestyle. Cutting back on spending is a very simple way to put yourself back in control of your financial situation. Keeping more money in your pocket means more peace of mind and more choice over what you do in your life from a big picture.
The point of financial planning is to help you use your resources wisely so you can learn to create the life that you want today, without sacrificing your future lifestyle. It’s a tricky balancing act. You can have it both ways. It just requires a plan, and it means focusing on what’s most important to you. You really can afford anything that you want. But you probably can’t afford everything. (For more, see: Top 5 Budgeting Questions Answered.)
A plan can help you prioritize and stay focused on what matters. Avoiding more debt is also an important part of this conversation. While there is such a thing as good debt, or financing that you leverage to create an appreciating asset (like an education or a business), most debt will only increase your financial stress.
Take care to avoid getting into things like consumer credit card debt, and focus on paying down your mortgage - especially if that’s something that weighs heavily on you. You don’t necessarily need to pay this down as quickly as possible but if the emotional burden of debt is too much to bear, paying down your home loan can help mitigate some of that stress.
3. Create and Keep a Budget
Budget might seem like shorthand for “boring” but keeping one is a simple, easy way to reduce your financial worries. It’s also your best weapon against overspending. A budget allows you to track your spending while staying mindful and aware about your choices. It can give you a lot of insight into your cash flow and where the money goes each month.
That is, assuming you both have a budget and maintain it. You need to use it if you want it to work for you. There isn’t any one right method or system to use. What’s most important is finding a way to budget that you’ll stick to. Some people like to tinker with spreadsheets, while others need an approach that’s as hands off as possible. Apps like Mint or You Need A Budget can make things simple and automated, and might be good options to start with (especially if you struggle to keep a budget on your own). Most financial planners can also help you with cash flow planning if you need additional support.
4. Don’t Try to Do Everything Yourself
Of course, it might not be the budget that causes you problems. It could be that you just feel overwhelmed from trying to do everything yourself. But you don’t have to go it alone. In fact, the smartest and most successful people in the world know they need help, support and accountability to reach their greatest potential. It doesn’t matter if we’re talking about professional athletes, CEOs or people who grew their own wealth from modest means.
In every case, these people have a team supporting them: coaches and professionals who are experts in their respective fields and who can give advice and guidance to make sure those successful people stay successful. That includes experts like accountants, consultants and financial. You can create your own team to get you to success.
Everything in life costs money, after all, so getting your money in a good place is a critical step to take if you want to align everything else you want to enjoy in your life. (For more from this author, see: What to Pay Off First: An Advisor’s Take.)