This content is provided by Prosper Marketplace.
Are you stressed about money?
If you answered yes, you’re not alone.
A recent survey conducted by Prosper Marketplace found that nearly 60 percent of Americans don’t have the financial freedom to enjoy life.
Nearly half of the people surveyed said they were living paycheck to paycheck and few have the means to absorb a financial shock. That’s stressful!
The truth is our ability to manage finances affects every part of our life — from the big things, like the flexibility to change careers, to the small things, like whether you can afford a morning latte.
Money can even affect relationships: another survey by the American Institute of CPAs and the Ad Council found that finances are the number one cause of stress for young couples.
Taking control of your finances goes a long way toward improving your overall wellness and a few small steps can make a big difference. So, here are four easy ways to start reducing stress and improving your financial wellness today:
1) Make a budget
The first step towards financial wellness is understanding where your money is going. Start with a list of monthly expenses, including the fixed costs (like rent, phone and car payments), as well as variable costs (like dining and Netflix). Look at your past debit and credit card statements to get an accurate look at where you’ve spent money, and decide whether there are any recurring costs or occasional expenditures you can eliminate.
2) Stick to your budget
Track how much you (really) spend. There are great mobile apps can help keep tabs on what you’re charging and the money you’re withdrawing. Look for tools that categorize your transactions, so you can see your spending at a glance. Check out Young Adult Money’s list of top personal finance apps for the ones we recommend.
3) Save for an emergency
You can’t predict life, but you can try to prepare yourself for it. Experts advise saving a cushion of about six months’ worth of expenses. Even if you don’t have much in your account, you can start small by automatically transferring a small portion of your paycheck into savings each month. Even $10 each week will add up and come in handy if financial disaster strikes.
4) Allow yourself the occasional splurge
It goes without saying that spending too much on frivolous things can set you back. That said, it’s unrealistic to cut out extra spending entirely. It’s kind of like dieting — if you’re too strict with yourself, you end up feeling deprived. Strive to find the right balance of saving and spending, with a few splurges here and there.
________________________
It’s never too soon to get on a path to financial wellness. Building confidence in your ability to save more and chip away at debt will improve your relationship to money. You’ll cross that threshold from being continually stressed about your finances to feeling like you have a handle on your budget – and that’s a major step in the right direction.
Check out some of our favorite personal finance resources:
Are you getting the best credit card rewards? Check out the top cash back credit card offers (updated daily)
Make extra money: 15 ways to make money from your computer
Get the First Chapter Free!
Join our online community and get the first chapter of the book Student Loan Solution absolutely FREE!
Last month I started using Mint for budgeting. My biggest takeaway from reviewing my spend for the prior months was that I was spending way too much on ubers/taxis. I went from averaging $80/month from Nov-Jan to spending $0 in Feb. Just being conscious of this as a category made me motivated to not be lazy and take the subway whenever possible.
Having an emergency fund has provided me with a great sense of security, both financially and psychologically. I currently have 1.5 months of income saved up. I think that is enough for now given the industry I work in and my other savings goals. In the future, I’d like to beef it up though.
George @ Properly Great example, George! I think Uber and Taxis are an easy place to spend a lot of money without realizing it.
Jaime Donovan Great point Jaime! It’s good to pay down debt but having some cash set aside can do wonders when it comes to stress management.
Aliyyah Congrats on building an emergency fund! I agree that the financial security that comes with having an emergency fund can be a huge boost from a psychological standpoint.
Great advice. I believe I’ve got the budgeting thing down but I just need to prioritize saving more for emergencies.
Chonce You are ahead of most people! I’m confident you will quickly build a bigger emergency fund.
I think #4 might be the biggest one. We all need to splurge from time to time or we get discouraged and give up. This is why people who try to lose weight by suddenly cutting calories and not allowing cheat days never make the changes stick. If you deprive yourself too much, you are more likely to give up and fall back into your old ways.