Living above one's means isn't all that hard to do, even when you make a six-figure salary. Delaying retirement planning, a down market or an unexpected event may cause serious financial stress.
Unfortunately, many adults faced with financial stress have a tendency to use denial - rather than a methodical strategy - to cope with the situation. This only leads to increased anxiety. The following tips can help you cope with stress as you begin to create a plan that will get you back on solid financial ground.
Meet with a financial advisor
If you experience financial worry to the point that it's affecting your life, it's time to meet with a professional. Your situation is a common one and a reputable financial advisor will never scold or shame you. Rather, they will give you a clear picture of your financial situation and create a written plan to get you back on track. In many cases, clients are surprised to learn their financial forecast isn't as dire as they thought.
Take a Look at Your Spending
Nobody likes being told to spend less money, but the reality is that, no matter how much you make, you still have limitations on how much you can spend. If you are stressed about your finances, take a look at how much you are spending now and what you are spending it on, and make cuts where necessary to create a more realistic budget. An easy way to do this is to use an online budgeting platform like Mint.com. You can create a budget you can actually stick to as well as get a better understanding of how you’re spending your money.
Listen to Your Anxiety
Often, financial anxiety isn't about money at all. Finances can be a dumping ground for coping with other stress. Worrying about aging, health issues or family conflicts can spill over into your financial outlook even if you’re on the right track financially. Again, a consultation with a financial advisor will give you a realistic perspective about your family’s bigger financial picture.
Pay off Your Debts
Not having those extra credit card, loan, or other monthly payments can make a big impact on your finances. By developing a strategy to get rid of these debts, you can reduce your monthly expenses, pay less in interest, and have one less thing to worry about financially.
One day the market may be down, but the next it can easily go back up and even surpass its starting position. Worrying about the day-to-day activity of the market is an easy way to cause yourself undue financial stress. Instead, focus on the long-term value of your investments and the plan you have in place to help you reach your goals.
Consult with an Expert
When faced with financial stress, it often makes sense to consult with an expert who can manage your financial outlook for you. This prevents you from falling prey to emotional investing, or what we would call the behavior gap. A professional financial advisor can work with you to create, and stick to, a plan that will limit your financial stress and help you reach your goals.
Disclaimer: This blog is intended for informational purposes only and should not be construed as individual investment advice. Actual recommendations are provided by Retirement Advisors of America following consultation and are custom-tailored to each investor’s unique needs and circumstances. The information contained herein is from sources believed to be accurate and reliable. However, Retirement Advisors of America accepts no legal responsibility for any errors or omissions. Investments in stocks, bonds, and mutual funds may increase or decrease in value. Past performance is no guarantee of future results. Any of the charts and graphs included in this blog are not recommendations for the purchase and sale of any security.