Each New Year, many people struggle with recent holiday spending and have trouble facing bills during the following months. This not only causes financial concern but also health concerns. Not to worry, with careful planning, you can avoid financial stress and plan for a healthy and prosperous 2017.
Let’s face it — money management is stressful. The annual American Psychological Association’s Stress Survey found that money is the top source of stress for American adults year after year. Unfortunately, people often avoid what makes them feel anxious and financial avoidance can only lead to bigger problems.
With these concerns in mind, now is the time to take action to ensure you have a stress-free year. As with any self-improvement plan, it’s important to establish short-term and long-term goals. The first thing you need to do is complete a spending inventory. Simply list everything you spend for an entire month, whether by check, charge or cash. This will help you locate the waste in your budget. This additional money can be used for savings or getting out of debt. When getting out of debt is your top priority, it affects thinking, decision-making and habits. If going to the mall for lunch means you end up spending money shopping, you need to change your routine. Instead, bring lunch to work and sit outside to enjoy the weather. Daily eating out, a pack of cigarettes per day and/or a morning coffee can often make the difference in meeting or missing your goals.
The following suggestions will help you plan for the coming year without the misery of financial stress:
1. Include your entire family in financial discussions.
2. Use a form to help you be specific about expense categories, including essential and non-essential expenditures.
3. Develop a spending plan – not a budget! By talking about how the family wants to spend money, you develop marital and family expense priorities.
4. Establish a savings account using payroll deduction through your credit union or financial institution with clear goals in mind.
5. Post financial goals with pictures of what staying with the plan will achieve. For example, put up a picture of Disney World as reason for saving and not spending (unless part of the plan).
6. Teaching your children how to know the difference between need and want is one of the most foundational distinctions for effective money management. Talk with your spouse about what he/ she learned about money in their childhood.
7. Whatever happens during the year, do not exceed your budget allotment. By putting money aside for emergencies, you potentially can avoid getting behind in essential payments.
8. Often parents and spouses are driven by guilt and need to keep up with other family members and neighbors. Become creative with gifts and entertainment. Service gifts of your time can be welcome.
9. Consider a plan to pay all expenses with cash for a period of time.