*This article was created in partnership with Experian. To find more resources about financial wellness, visit https://www.experian.com/blogs/ask-experian/
According to our research at Born This Way Foundation, over a third of young people report their own personal or family finances as being a major source of stress. If you’re struggling with financial anxiety, check out these four tips provided in partnership with Experian.
1. Remember that your finances are not reflective of your character
Your finances don’t determine how good, kind, or hardworking of a person you are, and they certainly aren’t representative of your success.
- To help remember this, consider finding a mantra or affirmation that reminds you to separate your character from your finances, such as “I am enough” or “My net worth is not my self worth.”
2. Get organized
We know that looking over your finances can be scary and anxiety-inducing. One way to calm your nerves is to take control and create a game plan by becoming organized. Here are just a few ways to get started:
- Review how much money you have in your checking and savings accounts.
- Get a free credit report (a summary of your credit history) Until Dec. 31st
- Review any outstanding debts
- Note your balances, interest rates and monthly expenses
3. Create a budget
By creating a real working budget, you can have a better understanding as to how your money comes, how it’s being spent, and how much you can put aside. In making a budget, you may want to consider the following:
- Your monthly income after taxes
- Essential expenses, such as rent or mortgage, basic utilities, food, car payments, insurance, and your phone plan
- The amount of savings you regularly set aside for financial goals such as college, an emergency fund, or retirement
- What you spend on everything else, including dining out, entertainment, and travel
To see how your finances are laid out, create a budget spreadsheet and make it a habit to review your budget at least once a month. You can also consider using free budgeting apps or regularly checking your bank accounts and credit cards to ensure you’re not overspending!
4. Set savings goals and be gentle with yourself
If you name a goal, you’re more likely to achieve it faster! Try to start by setting small savings goals, such as saving 10 percent of your paycheck every period. Above all, remember to stay kind and gentle with yourself. Budgeting is a learning process, and it might take a few times to find what works best for you. Check out some small goals you can set for yourself below:
- Make it a point to track or review your spending habits every week or month.
- Pay off a small debt – You can consider the avalanche method, which focuses on paying off debts with the highest interest rates first, the debt snowball method, which has you pay off the smallest debts first.
- Consider financially living by the 50/30/20 rule, where 50% of your budget goes to pay for necessities, 30% or less to discretionary items, and 20% or more to savings and debt payments.
- Improve how you pay your bills and make purchases – This can include automating bill payments so you’re never late or have to stress about paying your bills on time. Or you might want to go old school with envelope budgeting, which involves physically setting aside monthly amounts. The idea is that if you can see the money there in an envelope and know that’s all you have for your pay period to spend on a certain category, you’ll be less likely to overspend.
If you’re still finding your financial anxiety ruling your life, know there are resources to help – you can learn how to get a credit counselor or financial assistance here.