When I was growing up talking about money was a definite “no”. My parents never discussed things like pay vs. bills, money issues or even how to manage a checking account. So it’s no wonder that today when thinking about money I start to get anxious immediately.
My stomach starts hurting, I can feel my heart beating faster and I want to run far, far away. Even as a business owner dealing with the financial aspects like paying bills, investing in my business or even sending out invoices stresses me out.
I’m tired of feeling like this and I just bet that I’m not alone. Do you feel anxious or stressed when you think of your finances? My biggest fear is becoming homeless even though it’s basically happened twice & we’ve survived both times. I have nightmares of living in a cardboard box, under a freeway bridge searching garbage cans for scraps of thrown out food.
This year, I’ve decided to put myself smack in the middle of that ‘uncomfortable’ feeling and find ways to be able to gain that financial freedom, ditch the nightmares, pull up my big girl panties and put a stop to those overwhelming feeling.
That’s why I’ve partnered with Ellevest who specializes in investing for women. Here is what they say about the ‘overwhelm of money’:
That kind of feeling comes in a lot of different flavors. For some of us, the words “money” and “someday” always go together — it just never seems to be the right time to think about it. Some of us give a hard pass to the thought of making a budget. Some of us have made a few mistakes along the way that we’re scared to face. And some of us just feel lost and overwhelmed about knowing where to start.
So that’s us. If it sounds like you, here’s something good to fight the bad. Those feelings are valid. And they also don’t have to be permanent. You’re not alone. And no matter where you start, there are always things you can do to move forward.
Six Steps To Overcoming Financial Stress
You might think that sitting down to organize your money will be overwhelming and generally unpleasant, but we’re willing to bet that it’ll actually make you feel more in control. All you have to do is do the damn thing.
But you don’t have to go into this process blind. Here’s a checklist of steps you can take (and some deeper advice on each one, too). We recommend starting at the top and working your way down, one at a time, at a pace that works for you.
- Give your brain a boost. Picture a future where you’ve already done the thing. You don’t magically have a ridiculous pile of cash — but you’ve taken the time to think about your goal, you’ve thought about tradeoffs along the way, and you’ve mapped out the steps you’ll take. Sometimes projecting that feeling of accomplishment before you do anything else can get you from “bad feeling” to “hey … I can do this.”
- Look at your current spending habits. Use them to make a high-level spending plan for the future. Here is a great how-to
- Join your employers 401k plan. Here is why they are so important.
- Pay off your highest-interest debt first. It’s costing you a lot so getting rid of that is a huge money-saver. Here are a couple of approaches that can work.
- Set a goal for an emergency fund. Work on building it up so you don’t have to play that dreaded ‘what-if’ game any longer. This can help.
- Make a plan to invest for your goals. That might include retirement, buy a house someday, have kids, starting your own business, or just growing your net worth.
Some Ideas To Make It All Easier
Break It Down
If that list above looks like a mountain, just break it down into smaller more doable bits. Something like this:
GOAL
- Look at your current spending habits and use the 50/30/20 rule to make a future spending plan.
- Log in to your bank account and download your most recent account statement.
- Make three “buckets”: Needs, Fun, and Future You. Categorize each purchase from your bank statement into one of these buckets, and then add them up. This is how your spending looks today.
- Look at your most recent paystub. What’s the final amount of the check? That’s your take-home pay. Multiply that by the number of paychecks you get each month to find your monthly take-home pay.
- Calculate 50% of that number (for needs), 30% of that number (for fun), and 20% of that number (for Future You).
- Look at your current spending habits and see whether you can make adjustments so that you’re spending within those buckets. If it isn’t doable, adjust the buckets’ percentages until they work for your real life.
- Aim to stay inside your buckets next month. Then, next month, see if you can tweak things to get them closer to that 50/30/20 ratio — and then plan to keep adjusting on the reg.
Once you have your little bitty steps, you can start with just the first one. Or maybe you do three little bitty steps at a time. Or you go until you really want to stop, and then you take a break.
This can really help you build momentum — and it can also help you avoid that big overwhelmed feeling by focusing on one small thing at a time.
SCHEDULE A FUN THING LATER
If money stuff has a history of making you feel bad, try this trick: doing it right before doing something you know will make you feel good. Like drinks with friends. Or your favorite workout class. Or curling up with a good book. (Sure, it’s a little Pavlovian, but hey, mood boosters are mood boosters.) if you have something to look forward to after you do The Big Thing, you might be more motivated to keep going as you work through it.
LET GO OF ‘HAVE-TO’
“Ugh, I really do have to sit down and deal with my money this weekend” probably isn’t a mindset that’s doing you any favors. Neither is “I have GOT to stop spending so much” or “Wow, I have to stop being such a hot mess with my money.” You wouldn’t try to motivate your best friend that way, would you?
Switching off the “I must do this” mindset — which can feel unforgiving and judgmental, and who needs more self-criticism? The magic is trying to shift it to something more positive. Maybe a “This is a thing I’m doing for myself” mindset. Or a “Hey maybe I can’t get a raise tomorrow but I can do this” mindset. Or an “” mindset. Or whatever mantra works for you.
THINK OF IT AS SELF-CARE
The idea behind today’s self-care movement is to protect your mental health so that you can bring our best self to your everyday life. The stress will disappear, your self-esteem will get a huge boost & you’ll feel better about today & tomorrow.
But here’s the thing:
While money is people’s number 1 reason for stress , the act of saving and investing are the biggest boost of women’s confidence when it comes to building the future we want. So if finally dealing with the money stuff is going to improve your mental health — by helping to knock out all that stress and guilt and anxiety about money, and helping you feel good about tomorrow — then doesn’t that count as self-care too? (Note: This is also extremely compatible with candles and wine. Just sayin’.)
Bankrate.com has written a great piece on the benefits of paying off debt and you can find it here.
Are you ready to ditch the overwhelm & prepare for the future you want to have?
Give Ellevest a try!
“I’m excited to work with Ellevest to start conversations about women and money. If you become a client, I will be compensated.”
Rena
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I don’t know much about money, but my husband is an accountant. I need to be more independent with this sort of thing.
We used the “pay off the highest interest debt first” and we were surprised at how fast we got rid of debt. It’s so freeing to not have debt looming over our heads.
Great advice! We followed Dave Ramsey’s plan which says pay the low balance first, but on the radio I heard him say that it didn’t matter. My husband would prefer to pay high interest first.
Great tips for a good money plan. My husband likes to handle our finances and has kept us debt free up until now. Saving for the future with a 401k makes a lot of sense if you can.
You make this all so do-able! Thank you!
These are smart ideas. I am always careful with my money and I teach my kids to be the same way. I am blunt when we can’t afford something. I’m all, “Hey, we need to pay bills first.” I hate being in debt.
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I really enjoyed reading this post. Your tips are so helpful. Financial literacy is so important.
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I have always been somewhat open with my kids about money. They need to realize how much money it takes to have a place to live. I’ve never been rich or wealthy but I have always made do with what I had. I’m going through a divorce now and I have been very open with the kids about my plans to buy the single wide manufactured home that we are currently residing in. I don’t want to throw money away forever and rent and the cost of houses are out of my budget. Plus, being disabled, I don’t need a huge house anyhow. I’m planning on using the Dave Ramsey method and paying off that mortgage as quickly as possible. I have had to think about my own future and it makes perfect sense so that my expenses are very minimal after my kids are grown and gone.
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I have always been very careful with money. I was so thankful that we had savings and an emergency fund when I unexpectedly lost my job last month. I was excited to learn about the 50/30/20 ratio. That sounds really smart!
My parents were similar. I had no idea how much things cost until they kicked me out at 19 and then I had a big awakening about money! You’re so talented and have such a great business model with your blog services, Rena, so I think you are a great role model for how a woman can be independent and make her own way. I’ve always been one to live below my means, and we never spent money, always saved, never put a big focus on “things” but more on experiences and on family so now that both our kids are almost done with college, I finally have less stress about money as we’re almost done with all the college costs. You’re very smart and really resourceful and creative so I don’t think you will ever have to worry about becoming homeless.
Great advice. It can be hard to handle money but it’s so important to feel comfortable with it.
I needed this. I’m always in a panic about money and spending. My husband and I are never on the same page about it either so it’s added stress.
Great tips my mom taught me if you can’t buy it twice you can’t afford it and that’s how I’ve lived my life. I think teaching kids these things early helps them and the next generation be better when it comes to money
Thanks for sharing your terrific tips on how to get a grip on saving money. Taking a step by step approach and not getting overwhelmed is definitely the right way to do it.
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This is really a great blog. This could help a lot of people in handling their financial situations. Thank you for sharing your valuable thoughts.
Investments is one of the strongest foundation of having a great future. Saving and handling money is no joke. Good thing I had browse thru this, it expanded my knowledge about it.
I love this blog! Talking about financial situations and how to deal with it. Thank you for sharing your knowledge!
Great tip.s! We are paying more than the minimum and so far, so good. We also make sure to not spend more than we can afford.
Thinking about finances can be so overwhelming! Thankfully, the solutions that you have mentioned can ease that stress.
I motivate myself to save up more especially we have a new member of the family that is due this year. Planning for the future is always a great idea . Plus I have no plan to work all my life anyways.
These are good tips! I’ve learned that money comes and goes so have a good savings plan for those rainy days!!
Really really good tips here.
Once you take small steps to get your budget under control, it totally becomes less overwhelming
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This is excellent advice for everyone.