10 Tips for Claiming Financial Peace in Your Life
Money is the biggest source of stress for 44% of people. It ranks much higher than personal relationships at 25% and work at 18%.
If you find yourself feeling stressed over money, it can affect your entire life. It's tough to enjoy time with other people or new experiences when you're constantly worrying about money.
When you're in a difficult financial situation, it can feel like financial peace will never happen. But little steps can help you take charge of your finances and feel more at ease about the numbers.
Try these 10 ways to improve your financial situation and feel more at peace with money...
- Create an Emergency Fund
If you find yourself living paycheck-to-paycheck like 78% of U.S. workers, it's natural to stress about finances. One major unexpected expense can completely throw off your finances.
Setting aside money in an emergency fund can give you the peace of mind to know you have cash in an emergency. Instead of worrying about paying off debt, focus on building up an emergency cash fund that makes you feel comfortable.
The exact number depends on your situation. Some experts recommend a starting fund of $1,000. Many suggest saving at least three to six months worth of expenses. When you're living paycheck-to-paycheck, that can seem impossible, so start with something just to give yourself that cushion.
- Know Your Financial Situation
How can you be at peace with a situation you don't fully understand? It's easy to ignore your finances, especially if you're struggling with money. But understanding your current situation is the only way to make changes, improve your finances, and feel better about your money situation.
Start by looking at all the numbers, including what you bring in and what you spend. From there, create a personal budget to help you stay on track financially.
Revisit your spending and budget regularly. Check the math to make sure you're staying within your budget for extra expenses, like eating out and clothing.
- Set Financial Goals
Now that you know where you are financially, you need to have a plan going forward. Do you want to pay off debt, build your savings, fatten your retirement fund, or start investing?
Financial goals are very personal and depend largely on your current situation. You should set both short-term and long-term money goals to guide your spending and saving.
- Communicate About Money
If you're in a relationship where you share finances, communication is key to financial peace. Both partners need to understand your current financial situation and future goals. Being open and honest about money, even when things are tight, creates a sense of teamwork and makes it so you can work through those challenges together.
- Avoid Comparisons
You'll always know someone with more savings, a higher income, less debt, or other financial situations that seem more ideal than yours. It's easy to envy those people, but those comparisons cause negative feelings toward your finances.
Comparing yourself financially to others is dangerous because you don't truly know the other person's finances. They may drive an expensive car, live in a big house, and spend freely, but they could also be secretly drowning in debt.
Even if you know a person's situation is better than yours, comparison doesn't help you. Feeling disappointed because your friend has been promoted multiple times and brings home more money than you just makes you feel bad about your situation. You can take charge of your finances and live well no matter what your income, so don't worry about what other people are doing.
- Change Your Mindset
The way you think about money and finances affects your feelings about the topic. Maybe you believe money controls your life or that you'll never have enough money to have the things you want. Your parents may have taught you that spending money is bad, or maybe they never taught you how to manage money properly.
Confront those issues to improve your attitude toward money. If you feel like money controls everything you do, focus on thinking of it as a tool instead of your master. Being aware of your thoughts and counteracting the negative ones with positives can help you find peace.
- Handle Debt Carefully
Paying with cash can save you stress by eliminating debt. If you do take on debt, make sure you're fully informed. Ask questions when borrowing money to fully understand the terms and expectations.
If you have debt hanging over your head, make a plan for paying it off. Decide how much money you want to throw at the debt to pay it down.
Fighting the urge to buy more stuff can help you take major steps toward financial peace of mind. The pressure to afford the latest car, designer clothes, and other top-dollar items is a huge source of stress.
If you're surrounded by lots of things you don't really use or want, try downsizing. Selling those unused items can help you quickly grow your emergency fund. Removing items that are just taking up space can help you feel emotionally lighter, which supports greater financial peace.
- Automate Your Finances
Instead of spending hours paying your bills each month, use automated options to ensure bills get paid on time. Most companies and services offer recurring payments that automatically come out of your bank account each month. Online banking services also provide bill payment options.
Don't forget to automate your savings. Set up your bank account to automatically transfer a set amount to your savings account as soon as your paycheck hits. It's tempting to spend the money if it's in your account instead of putting it in savings, so automation takes away that temptation.
- Pay Right Away
Do you shove bills in a pile when they arrive? Or do you handle them right away?
Paying your bills when they show up makes you feel accomplished. The task is no longer hanging over your head, which lets you focus on other things. You also avoid forgetting and paying late, which helps you avoid late fees and more financial stress.
Find Financial Peace
Financial peace isn't something that happens instantly. Working toward understanding and controlling your finances through small, intentional steps makes it easier to reduce your stress over finances. Read more personal growth articles on our site to improve your overall well-being and outlook on life.