March 8, 2024

5 Steps To Manage Financial Stress And Fix Money Issues Permanently

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No one is immune to financial problems. Bad money habits or going through a tough time, such as a divorce, illness or unemployment, can really tip the scales. Need help? Here are 5 powerful tips to manage financial stress in your life.

First you need to figure out where you REALLY stand with your money issues (and thus, your future), check out these ‘5 warning signs’ that you could be headed toward a big financial stress. (If any of them ring true for you, don’t worry – you’ll also find tips on how to manage financial stress in your life and fix your money problems!)

Warning Sign #1 Of Financial Stress - You have only $20 (or less) left at the end of each paycheck.

Does this sound about right for you? Are you down to your last $20 by ‘the day before payday’?

Do things get a little ‘tight’ by the end of the pay cycle? Having only a trifling amount left before the next paycheck – when you’re not putting any of that paycheck aside in savings - is the definition of living ‘paycheck to paycheck’.

And it’s a major sign of money problems that you are spending too much for your income.

If you want to get ahead with your money issues there is really only ONE simple rule: Spend less than you earn. The less you spend, the more there is left over.

The more there is left over, the more of a surplus you have. And having a surplus is really what it’s all about, isn’t it?

To cut out your money issues and worries right now  to build up savings NATURALLY and WITHOUT EFFORT OR BUDGET and to sleep easier at night, all you have to do is spend a little less.

Do it sensibly, though to manage financial stress in your life. Don’t start trying to live on cat-food and Alpo. Pare down in an area that suits you.

For example, if clothing is an area that you really like to drop a little dosh in, it wouldn’t make much sense to start shopping at thrift stores all the time.

That would just make you miserable. Likewise, if you go to yoga class five days a week, don’t try to cut back there.

Cut back in the areas where you can COMFORTABLY DO SO. (But you’ve got to cut back somewhere, so make a decision where it’ll work for you. Food or clothing? Socializing or exercise? DIY or music equipment?

Pick an area, and pare way back.)

Warning Sign #2 Of Financial Stress - You’re not saving any money.

Listen up: saving money is what will help you get ahead and allow you to get rid of your financial problems.

And I’m not just talking about ‘retirement’, or ‘putting money aside for your old age’.

I’m talking about right NOW. Yes! Money in the bank will have a direct impact on how nice your life is RIGHT NOW.

Money is tantamount to choice in your life.

The more money you have at your fingertips, the less financial stress and more financial freedom you have to CHOOSE how you want to spend the time you have on this earth.

If you have money in the bank, you have CHOICES. You can make the choice to quit your job, follow your passion and travel for a year.

Or start up your own business. Or go to London to see your sister ‘just for the heck of it’. Or go out for a nice dinner when you don’t feel like cooking. Or fix the garage door when it breaks.

Money is freedom: the freedom to do what you want. And the less of it you have saved up, the less freedom you have. When you have nothing in the bank, you HAVE to work. You have no choice.

Even if you hate your job, you still have to do it in order to survive. If something breaks – the car, the toilet, your leg – the situation immediately becomes very stressful, because now you have to figure out where you’re going to get the money from to fix whatever’s wrong.

If you have no available money and you really need whatever’s broken, life can feel very, very hard and more than a little scary.

Rich people with savings don’t have to think within these parameters, though, because the money they have in the bank enables them to do MORE of what they like and LESS of what they don’t.

If you have lots saved, you don’t have to do ANY of what you don’t want. It’s really quite a nice feeling to put it mildly.

And not to put the frighteners on you or anything, but this isn’t all about milk and roses, either: yes, having savings in the bank will GIVE you a lot of GREAT stuff but money is also useful for preventing the bad stuff from happening.

If you get the pink slip at work, your savings can convert a ‘panicky job-hunt’ into a ‘relaxing sabbatical’ while you calmly and leisurely look for something new (and better) that you’d like to do instead of just hastily settling for whatever comes along that’ll pay the bills.

If your dog or your kid needs an operation, you have the ability to provide. If your car seizes up because you forgot to put oil in it, you can fix it – or just buy a new one.

Money in the bank is what turns a stressful situation into an opportunity to upgrade.

And if you don’t have that cushion in the bank, you’re going to get pretty wet if and when that rainy day comes … and trust me, it WILL come one day.

Sooner or later, you’re going to want that umbrella. To find INSTANT savings, reread tip #1 and spend less than you earn to create an instant surplus.

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Warning Sign #3 Of Financial Stress - You have the best INTENTIONS as far as money goes, but  somehow, you haven’t quite managed to start DOING anything about it yet.

Yeah, you know how important savings are. You’d like to have superannuation (what Americans call 401k) … someday.

You fully intend to buy some CDs and start investing in a low-risk portfolio. You’re going to file a tax return someday just not TODAY.

All of this will happen ‘in the future’, when you grow up a bit more and become a fully fledged member of the adult world, right?

You know along with the people who get their tyres rotated, who get their teeth cleaned every six months, who don’t smoke, who eat fruit for breakfast, and who clean out desk drawers for fun. Yeah, right.

Here’s the deal: you are an adult NOW. And as far as money goes, ANYTHING is better than nothing.

Look, I get it: it’s hard not to be frightened into total lethargy by the high standards set by some self-help money gurus.

You feel like so MUCH is (apparently) necessary in order to ‘get ahead’ with money problems that it’s flat-out impossible, and you’re better off just not even worrying about it, right?

To go from being a happy-go-lucky spendthrift to being told you’ve got to save 10% of your paycheck, donate another 10%, and invest 10% is enough to terrify ANYONE into doing nothing for now. It’s like, ‘Hooray!

Let’s all stop eating out, stop buying new boots, and stop socializing and instead live on dried prunes and gummy oatmeal!’ What could be more fun, right?

But in the REAL WORLD (which is usually quite a different world than what you read about in those all-or-nothing self-help books), life isn’t quite so polarized. It’s not about cutting way back until you can see the glint of bone through all that sacrifice.

You can save money, manage your financial stress and still live comfortably, as long as you don’t become all about ‘all or nothing’.

So I repeat: SOMETHING IS BETTER THAN NOTHING. Small amounts can make a HUGE difference.

You don’t need to be saving money and scrimping in order to make progress here. Let’s be realistic, shall we? If you’ve never saved money before, being expected to suddenly produce 10% of your paycheck, every paycheck, is worse than daunting it’s PARALYZING. And it’s highly unrealistic.

So if you can’t manage ten percent, fine. Try five percent. Try ONE percent! But DO IT TODAY.

Start now. Something is always better than nothing. And by the way the effect of these efforts is cumulative, mentally as well as materially.

Each time you put money aside, not only are you accumulating CASH – you’re also accumulating saving experience.

The more experience you have with saving money, the EASIER it becomes to save greater sums of money.

So if at first you can only manage one percent, great. Start with what you can comfortably manage and continue on. After a couple months, you might find yourself wanting to speed things up a bit so you experiment with three percent, just for a couple paychecks.

And thus the amount slowly starts to climb until one day, at some undisclosed point in the future, you find yourself effortlessly socking away fifteen percent without even FEELING it.

But the trick is to start SMALL, and WORK UP. Your mind will adjust over time to whatever you’re trying to do. ANYTHING becomes ‘ordinary’ if you do it long enough.

And if you start small – which you should, because otherwise the shock will be too great and you’ll quit almost immediately – you can ‘ease into it’ quite nicely and then BAM! Before you know it, you’ve got a considerable cushion in the bank with more added every week.

Start small, and BUILD. But whatever you do, do it now.

Warning Sign #4 of Financial Stress - You sometimes use your credit card to buy essentials and it’s happened more than once in the last three months.

Using a credit card is like swimming, if not with sharks, at the very least with big, slimy river eels sure which will definitely increase your financial stress and money issues.

Because I’ve been there. I still remember the awful feeling of worrying about having my debit card declined when I lined up to buy groceries at the supermarket.

Sometimes I would just hand my credit card straight over to pay, to avoid the embarrassment of maybe having my other card decline. I get it.

But you don’t have to live that way. I’ve got a way out that worked for me and it’ll work for you, too.

The first thing you’ve got to do to extricate yourself from the financial tar-baby you’ve got yourself wrapped up with is to start paying attention to the warning signs of the financial stress.

And using your credit card to buy essentials (groceries, rent, gas, electricity) is a SURE SIGN that something is out of whack with your spending! Don’t worry, I’ll tell you how to fix your financial problems it in just a sec but for now, listen up, because you NEED to hear this. 

The ONLY safe way to use a credit card is when you don’t need to use it! Credit cards are designed to entangle everyday people like you and me with DEBT that we will never get rid of for the rest of our lives.

Here’s a surprising truth: credit card companies don’t want us to pay off our balances every month. If we did that, they wouldn’t make any MONEY out of us, which is the whole reason for their existence.

Instead, they want us to keep making those minimum payments every month which will mean they’ll have their fingers in our pie for years upon YEARS, if not our entire lives.

Imagine that – a customer for life! Now there’s a solid investment. No wonder they spend so much money on ‘free offers’, six month discounts, and flier drops to get us using their product.

Here’s the ‘rule’ for credit cards to ensure a comfortable, debt-free, PANIC-FREE life for you and me:

They are to be used ONLY when cash or debit-card is not an option like if you want to buy something online, for example, and (here’s the clincher) … … YOU CAN TRANSFER THE MONEY IMMEDIATELY FROM YOUR CHECKING ACCOUNT INTO YOUR CREDIT ACCOUNT TO COVER THE AMOUNT SPENT.

This has to be IMMEDIATE, as in, the very same day. If you wait, you’ll very likely lose track of how much you’re spending with’s easy to find yourself suddenly in the hole for $600 when you’re using plastic, because there are no visual cues of how much you’re spending.

That’s why you must be able to transfer the money IMMEDIATELY. You must ALREADY HAVE the identical amount sitting in another account, waiting to be spent, if you’re going to use that card.

If you’re using that card because you ‘need’ the ‘money’ it has on it, WAIT. Don’t do it.

That card doesn’t have ‘money’ on it has DEBT on it.

And if you need to go into DEBT just to cover your basics, you’re in trouble and something is wrong with how you’re spending your money. 

But I’m not going to brow-beat you about it instead, here’s what to do about it.

Look at your weekly ‘budget’ (which means, not a ‘money plan’, but simply how you’re spending your money.)

Figure out, basically, how much money is going on ‘essentials’, how much on ‘fun stuff’, and how much on savings and debt reduction. (You don’t have to get out the calculator and figure it exactly to the nearest penny, but get a reasonably solid idea.)

For healthy spending and easy sleep every night, your spending should closely resemble the 50/30/20 ratio set out by Elizabeth Warren and Amelia Tyagi in All Your Worth: The Ultimate Lifetime Money Plan.

I talk about this ratio often, but to jog your memory, that’s:

  • UP TO approximately 50% of your income on ‘needs’ (rent, utilities, gas, basic food,
  • no more than 30% of your income on ‘wants’ (stuff you buy for fun that you don’t
    ‘need’ to survive.)

If you follow these two pointers, you AUTOMATICALLY have a minimum of 20% of your income left each paycheck for savings (which includes debt reduction.) and you should be able to manage financial stress in your life with ease.

A basic ratio plan like this is like gold-dust when it comes to sorting out your spending and your saving.

You don’t need to tinker around with detailed budgets or lists of ‘haves’ and ‘must not haves’.

Instead, all you need to do is make sure your ‘needs’ don’t come to more than half your income, and that you’re not spending more than thirty percent of your income on ‘fun stuff’.

It’s very, very simple – and beautifully effective.

If your ‘needs’ are much more than fifty percent of your income, you’re going to start feeling the pinch and you’re going to need to shift some priorities around - by moving to a cheaper house, selling something, or getting a second job for awhile -so you can live, save, and spend comfortably.

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Tyagi and Warren go into how to cut back on ‘needs’ in detail in their book, but the obvious options are centered around two basic ideas:

1. Getting rid of expenses that you can do without to fix your money problems.

An easy way to downgrade your weekly living expenses is to bite the bullet and slash your rent or mortgage.

This is the biggest weekly ‘nut’ that most people have to deal with; reducing your living expenses will create an immediate cash surplus.

(Obviously, this involves moving, since most of us would have trouble convincing our landlords or banks to spontaneously lower the rent or mortgage!)

Another option is to sell stuff that eats up money unnecessarily, like a boat, an extra car, or an RV (recreational vehicle) that requires registration, maintenance, and licensing, but which only gets used once a year or so. (Duh. But you’d be surprised at how many people this doesn’t occur to.)

2. Increasing your income to manage financial stress.

You can do this by selling everything you no longer want, use, or need (clothes, cars, kitchen gadgets, everything – have an ‘estate sale’, get rid of your clutter, and make money!) or by creating a regular secondary source of income: yep, getting another job.

This won’t be forever, but a temporary part-time job will definitely help you to get over the ‘hump’ and create that cash surplus while you get your life in order.

Some people deliver pizzas a few nights a week after work; some people take in odd jobs like clothing alterations, quilting, neighborhood car maintenance, or carpentry odd jobs; and some people simply do overtime at their existing jobs.

For more ideas and more detail, I strongly recommend reading this book The Ultimate Lifetime Money Plan; it’s a gold mine of information for living, saving, and spending sanely and comfortably.

Warning Sign #5 of Financial Stress - You LOOK as though everything’s flush … but your kids sometimes eat mayonnaise sandwiches to help make ends meet.

You’re well-dressed, well-heeled, and you look as though everything’s flush but you have no health insurance, car insurance, contents insurance, your car still hasn’t been checked over for what’s making that squeaky noise, and your kids sometimes eat mayonnaise sandwiches for lunch to help make ends meet.

If this is even REMOTELY true for you, something needs to change starting with your ATTITUDE to fix money issues in your life.

Let’s get something straight here: ‘keeping up with the Joneses’ is a great way to BANKRUPT yourself while feeling incredibly miserable throughout the process.

I’m not kidding. ‘Keeping up with the Joneses’ is code for ‘looking like you’re flush even though you’re living on empty credit’, and it’s practically a national pastime – even though we all know that ‘the Joneses’ are in debt up to their eyeballs too!

As far as money goes, appearances count for nothing and REALITY counts for everything.

That means it doesn’t matter how great your clothes are, how well-groomed your house is, or where you go on holiday if your future isn’t secure by which I mean you have enough money in the bank to weather at least one medium size storm, and you’re living WITHIN your means (yep: spending less than you earn.)

To get ahead, you need to get your PRIORITIES straight. Appearances = worthless; reality = gold-dust.

So would you rather look as though everything’s great, but secretly lie awake grinding your teeth in a cold sweat each night out of fear of money trouble or would you rather drive a 15 year old car and wear clothes that maybe aren’t ‘of the moment’– but sleep well every night in the knowledge that your house, your lifestyle, and your future is ROCK-SOLID safe and secure?

Because being ‘well-off’ isn’t about LOOKING like you’ve got it together.

Most millionaires drive a car that’s over ten years old – and they hardly ever buy new wardrobes.

Want to know why? Because they didn’t get to BE millionaires by living like spendthrifts – they got to be millionaires by spending less than they earned. A lot less.

If you want to get ahead moneywise, you have got, got, GOT to spend less than you earn – and you’ve got to spend it on the RIGHT STUFF.

‘The right stuff’ means taking good care of what you already own (maintaining the car, taking the dog for annual checkups), and putting some aside EACH paycheck to reduce debt and save for the future. So: drive a 20-year old car.

Wear clothes until they actually wear out, instead of buying a whole new wardrobe every season.

Focus on actually getting ahead, not just looking like you are. Then laugh all the way to the bank.

This is a slightly less hardcore version of the approach advocated by Dave Ramsey in his Total Money Makeover series: ‘If you’re willing to live like nobody else, later, you can live like nobody else.’

Dave is more about scrimping and saving and eating ‘beans and rice, rice and beans’ until you’ve gotten 100% out of debt than I am (I happen to think you deserve to enjoy yourself today, even if you ARE paying off debt, as long as you can do so sanely and within your means) but the soundbite is good, no? And it’s true.

Especially in the States, most people are TERRIFIED to be seen driving anything less than a new car, or wearing anything less than brand-new clothes.

But if you’ll live like nobody else, later, you can live like NOBODY ELSE.

(And so long as the car works and is safe, c’mon. Take some concrete pills and harden up.

Would you rather be bankrupt but LOOK good – or be flush, but (gasp!) wear the same pair of jeans for two seasons in a row?)

Security is about your PRIORITIES. And the peace of mind that comes with the right priorities is WORTH it.

I will stop here. If you loved reading this article on how to manage your financial stress than please do not forget to share and comment your thoughts.

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Manish Yadav

My name is Manish Yadav and I’m the owner of the blog "Love Finds its Way". My advice does away with the manipulations and mind games recommended by magazines and the surface level advice of TV gurus… We’ll dive DEEP to you actionable steps you can use today. Over 900,000 men & women have transformed their lives, and I've been featured in Lifehack, Return of Kings, Menimprovement, Urban Dater, and so on...
...My only intention is to help you have all of achieve your dreams and desires and live a beautiful and prosperous life.
And we’re just getting started!

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