Zac runs through 5 tips that will help ease financial stress

5 tips to avoid financial stress

While some forms of stress can have a positive and healthy impact on your life, financial stress is certainly less desirable. Individual experiences with financial stress vary; some people constantly worry about finances, often due to inadequate financial management. The tips provided below aim to alleviate some of the financial stress you may be experiencing and to reinforce sound financial habits.

 

Tip #1 – Build a cash buffer

  • Living from pay cheque to pay cheque and encountering unforeseen expenses can be unsettling. This can often result in reliance on credit cards, which only intensifies financial strain. Establishing a cash buffer or a “rainy day fund”, will bolster your financial security and reduce stress levels, even though it may require certain sacrifices initially.

 

Tip #2 – If you can’t afford it, don’t buy it

  • Seems simple, right? However, with the emergence of “buy now, pay later” services such as Afterpay, impulse purchases have increased. For individuals who struggle with financial management, services like Afterpay can pose significant risks. It’s important to recognise that, while deferred payments or instalment plans might make purchases appear more tempting and manageable, they ultimately equate to the same total cost. This principle also applies to using credit cards and accumulating bills that can’t be immediately repaid. Such mismanagement can lead to the accumulation of stress-inducing, high-interest payments.

 

Tip #3 – Make a budget and stick to it

  1. Review your current expenditures, particularly underutilised subscriptions like Netflix and Stan, and consider cancelling or possibly sharing these subscription costs. A thorough overview of your spending can reveal areas for improvement. Regularly reviewing your expenditure helps ensure that you adhere to the budget you have set for your goals, fostering healthier spending habits and financial decisions.

 

Tip #4 – Start investing

  • Feelings of stagnation and perceptions of falling behind your peers can significantly intensify financial stress. A practical solution to mitigate this is to start investing. This approach can alleviate feelings of stagnation by providing a sense of engagement and progress. Investing need not be intimidating, nor does it require substantial initial outlays. There are plenty of options available for micro-investing, allowing individuals to leverage the benefits of compound interest through smaller instalments and extra change.

 

Tip #5 – Pay off bad debts

  • Lingering debts, especially those accruing high interest, are major contributors to financial stress. Proactively addressing such debts can stop interest from compounding and considerably alleviate your financial strain. Managing all of your overdue bills and debts through meticulous budgeting can guide you towards a clean slate and enhanced financial stability.

 
Inaction in times of stress only magnifies the issues and has the potential to escalate the situation further. By proactively addressing the areas mentioned above, you can foster your financial well-being, attain peace of mind, and regain control. If you have any questions feel free to send through an enquiry or book a chat with a Pekada adviser.