5 Ways to Calm Your Common Money Fears
It's Halloween season, but that doesn't mean you have to be spooked about your money.
But if you actually do have financial worries and fears, you're certainly not alone. According to a survey by Bankrate, 52% of Americans believe money is a significant stress that impacts their mental health. Let's take a look at some common money fears and more importantly, how to calm them:
- Rising costs - Inflation is real. Just take a trip to the grocery store or look at your utility bill to prove that fact. Soaring costs of goods and services have squeezed budgets and prompted many people to live paycheck to paycheck. You can't control rising prices, but you can control how you choose to spend your money. Take the time to review your budget and look for ways to cut spending on things you don't need. Or, think about getting a side hustle to bring in more money.
- Unexpected expenses - Life is full of surprises. Some are good, but others, like emergency car repairs or unplanned medical bills, can keep you up at night and wreak havoc on already-strained budgets. Having an emergency savings fund can help you prepare for those expenses. Experts recommend having up to 6 months of living expenses saved, but any amount you can put aside can help. The key is to build savings and leave it alone. It's called an emergency fund for a reason.
- Rising debt - From credit card bills to student loans, debt happens. And with soaring interest rates excess debt can really cost you. Be wise about what you spend. If you don't have the cash to pay for something, don't buy it. And when you do use your credit card, try to pay off the entire balance to avoid costly interest. If you've already accumulated credit card or other debt, you can still take charge of it by paying off high-interest balances first or even transferring balances to a lower-interest card or loan.
- Not saving enough for retirement - When you're struggling with meeting rising monthly bills, it's hard to think about saving for the future. But the truth is, saving even a little bit of money now can go a long way later when you retire. If you haven't done so, participate in your company's 401(k) or other retirement plan, especially if they offer matching contributions. If your employer doesn't offer a retirement plan, open and make automatic contributions to an Individual Retirement Account (IRA).
- Affording college - A college education can be a good investment, but it is expensive. To help you manage the cost, you could open a 529 plan and make regular automatic contributions over time. You can also take advantage of other ways to make college more affordable, including financial aid, private loans, and scholarships and grants.