5 Ways to Reduce Financial Stress

Tuesday, June 12th, 2018

From worrying about how to budget better, or wondering how to reduce your loan repayments, or shorten the life of your mortgage – thinking about money matters can lead to real financial stress.

To help you manage your money the smart way without the stress – try these 5 tips for reducing your financial worries.

1. Use an automatic savings account

If you have money coming in regularly from a consistent source, such as an income for a job, or some kind of allowance for study, setting up your bank account to siphon some money off into a savings account is an easy way to help you save. Do a budget first to have a clear understanding of your living expenses and what percentage of your income you can lock away for a rainy day and you’ll find that, simply by seeing less available money in your main bank account, you’ll be less tempted to spend money that you should really be saving.

2. Avoid impulse shopping

Window shopping can seem like a fun thing to do but it’s rare that it doesn’t end in a purchase – usually of something that you had no intention of buying (and, let’s be honest, no real need for).

To avoid the terrible temptation that window shopping can be, avoiding all kinds of impulse buying – from deviating from that planned shopping list to splurging on another pair of shoes you might not wear – can be a very smart protection for your long-term financial health.

If you can’t trust yourself, go out into the world without your credit card – using only a debit card linked to your actual money as your payment option. If you really do see a bargain so good that it can’t be ignored, give yourself 24-48 hours to go away and think about it before jumping in with a spur-of-the-moment purchase.

The time that passes will help get to the bottom of whether it’s a genuine need, or simply a want – and your bank balance will be better for it.

3. Use a Money Management App

Thorough financial planning is all about managing a budget and knowing where every cent of your money goes, every day.  For many people, it’s a task put firmly in the too-hard basket but, thanks to very handy and user-friendly online apps and tools, you can become smarter about managing your money, without the stress.

By setting up a budget based on your real earnings, incoming and all expenses and outgoings, you can track every single item of expenditure and find out where your money is really going. With greater awareness, you can take positive steps to take action and reduce your spending enough to help you be in a position to apply for that much-needed loan – then take your life to another level.

4. Set Financial Goals That Are Realistic

Daydreaming is a lovely thing to do but when it comes to your finances, keeping a firm grip on reality makes much more sense.

When you set realistic financial goals, you are much more likely to work towards them to make them come true, rather than be disappointed by trying to chase the unattainable.

By working out what you hope to achieve in the next 5 years, you can do a realistic budget to see what you need to do to reach those goals. If buying a house is on your list, work out your price range by getting advice from a mortgage broking specialist, then make sure you understand the amount you’ll need to save for a deposit.

With those figures guiding you, you’re in a stronger position to work/save as hard as you need to in order to make those dreams become a reality.

5. Cut Back on Luxuries

Sure, it’s sociable and enjoyable, but can you really afford that third brunch with friends this week? And with Netflix so affordable and YouTube so entertaining, do you really need that cable TV subscription still? Small steps to better budgeting include packing your own lunch to work or uni, without splurging on a meal out every day, or using the fitness benefits of walking more places in favour of jumping into your car for every neighbourhood errand.

Other luxuries you might be able to cut back on include take-away coffee (stick to just one a day!), magazine subscriptions and brand new books. With libraries and friends to rely on, you can still enjoy great reading without the big expense and when it comes to that coffee, investing in a machine for home is not only better on your budget (in the long-run) but also better for the planet (no take-away cups!).

For more information about ways a loan might help ease your financial stress, talk to our loan broking specialists at Loans Actually today.

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