If you’ve never experienced financial stress, it may feel like a foreign concept. But for many people, the loss of an investment, a job, a spouse or other change can put them in a downward spiral that leads to chronic money stress. Financial stress is caused by an accumulation of small stresses and uncertainties that add up over time. It can also be triggered by one-time events such as car accidents or job loss. Once money stress sets in, it feels like there’s no escape. With every passing month and with each new stressful event, things get worse until you feel trapped and unable to recover. You begin relying on emotional support networks instead of your trusted friends and family because they don’t understand your financial plight either. This makes things even harder when they do eventually leave you, which is bound to happen sooner than later. So if you recognize these signs in yourself or someone else and want to take steps to lower your risk of losing everything financially again—here are some great tips on how to do so:
Set up an emergency fund
If you’ve never been in a financial situation where you had to tap into your savings, you may not know what to expect. This is the time when you find out if you have the discipline and confidence to handle a few months of very little income. So if you can set up a small emergency fund with as little as $500, you’ll be pleasantly surprised at how quickly things can get back on track if you have to put your tax refund or savings on hold. Setting up an emergency fund is a good idea for almost everyone. It will give you peace of mind and allow you to get back on your feet faster if you ever need to. If you can’t get your hands on $500 right away, you can set up a smaller emergency fund on a credit card. Make sure that you pay it off each month. This is a great way to save while also protecting your credit score.
Learn to say no
If you’ve never had to say no to a friend or family member, it may be difficult to understand how it feels until you’ve had to turn down a nice dinner. But saying no to things can be an easy way to save money. Let your friends and family know that you’d love to see them, but you don’t have the time or energy to reciprocate their effort. And if someone asks you to take on a project or a new expense, politely decline. You can also choose to say no to expenses that you don’t really need. When you cut expenses that you don’t absolutely have to have, you can then add more to your savings without compromising your quality of life.
Be aware of your debt triggers
Many people in debt find themselves in a downward financial spiral by accident. The smallest of changes, such as a car accident, an unexpected medical bill or a loss of a job can set one person on a path of financial doom. Pay attention to what triggers your debt and keep a mental note of them. If you’re prone to debt, create a mental list of things that could kickstart one of these triggers. Then, make sure you don’t do them when they could set you back. If you’ve got a car loan, keep it in a separate parking lot. If you have a house note, keep it out of sight.
Don’t be afraid to ask for help
While it may feel shameful to ask for help, it’s crucial to build a safety net. This is particularly important for those who have lost a job or who have unexpected expenses that make it hard for them to save money. If you’ve got debt or income issues, you should reach out for help. You have options including filing for bankruptcy protection, negotiating with creditors or receiving debt management or financial counseling. If you’re not sure where to start, you can also consult a website such as Credit Karma. This will give you a detailed snapshot of your financial health and what to watch out for.
Set clear goals and track progress
Once you’ve got a handle on basic money management, it can be beneficial to set clear and specific financial goals. This will help you track your progress and stay motivated when it comes to saving and budgeting. Begin each day by writing down what you’re going to do that day and then checking off each item as you do it. This can also be helpful if you find yourself in a financial trap and need to get yourself out of it. Every time you check something off your list, you’ll feel like you’re making progress.
Financial stress is real and it can be difficult to get out of. But there are a few things you can do to lower your risk of experiencing it. Set up an emergency fund and learn to say no. Be aware of your debt triggers and don’t be afraid to ask for help. Set clear and specific financial goals, and make sure you stay motivated by checking off your To-Do List every day.