6 Tips to Ease the Pain When Money is Tight

Are money worries keeping you up at night? If so, you’re not alone.

Chances are you’re part of the 2 of 3 people regularly losing sleep over financial concerns. Money seems to run out faster than it should, and you don’t have a budget. Bills, repairs, holidays, and unexpected expenses catch you off guard. Stressful, right?

Take a deep breath and continue reading. These 6 simple tips will help ease the pain when money is tight. Follow them to simmer down those feelings of financial distress.

1. Start at the beginning

Think about your goals for your money. They may seem obvious at first — pay your bills with less stress. Make all money worries disappear. Dig a bit deeper and assess where you are in the following categories. Do you have:

· $1,000 or more in an emergency savings account?

· A family budget?

· Any debts you want to pay off?

If you’re like most Americans, again 2 out of 3, you have less than $500 in an emergency savings account and nearly $17,000 in credit card debt. Time to turn things around and gain financial peace of mind.

Sample goal: My goal is to:

· Have at least $1,000 in my savings account

· Start following a budget today

· Start paying off my credit card debt

· Put extra money in savings

· When savings = $1,000, put extra money towards credit cards

2. Grab a budget worksheet

Following a budget is the key to achieving your financial goals. It’s easier than you probably think! There are many budget templates out there, but give this free one a try. Scroll down and choose the Zero-Based Budget Template. Download and save a copy then it’s time for the exciting part…filling it in.

3. Create your plan

Create a plan that tells your dollars where to go, instead of letting them roam around aimlessly. The goal is to account for every reoccurring expense. Christmas may sneak up on us but it comes around every year! If you plan for it, you’ll have peace of mind — and money — when the time comes.

1. List all monthly income in the Salary fields on the form (feel free to change the labels to make this YOUR budget). If your income amount is different each month, list the lowest realistic number you’ll earn.

2. List all bills in the Budget column. Start with the items that have fixed dollar amounts (rent or mortgage, electricity, water, phone, daycare, etc.). Check your bill stubs if you need to. Make sure you include things like insurance normally paid quarterly or annually — calculate their monthly cost.

3. List remaining expenses for variable items like food, gas, hygiene, and more. Don’t forget to include things like:

· Medication costs (prescription and over the counter)

· Pet food/insurance

· Holidays (Christmas, birthdays, anniversaries, etc.)

· Children’s activities (dance class, soccer camp, etc.)

· Gym memberships

· Home repairs/maintenance

· All insurances (life, home, car, umbrella, etc.)

· Storage fees

· Pest control

· Vehicle repairs and maintenance

· Vehicle registration

· Dentist, optometrist, etc.

· School supplies

· Clothes

· Dry cleaning

· Entertainment

· Date night/family fun

· Individual spending money

· Other subscriptions or regular expenses

It takes most people about 90 days (3 monthly budgets) to figure out exactly what works for these areas. Don’t stress, start with something reasonable, and you can always adjust it later.

Once everything is entered, take a look at the Total Budgeted Balance number. The goal is to get it to equal zero (income = expenses). If it’s more than zero, great news, you have more money to allocate somewhere. In the sample goal above, it would go into the Savings category to build up your $1,000+ emergency fund. If it’s less than zero, you need to cut back on something in your budget so you don’t overspend. Find variable categories you can reduce until you hit zero on the nose.

4. Fine tune your budget

You’ve created your budget and now you’re ready to put it to work. Before you do, let’s fine tune it just a bit, and search for ways to save you some money.

First, make sure you’ve included something in each of the 4 categories below:

1. Giving

2. Saving

3. Bills and necessities

4. Spending money and fun money

Why? Well…

Giving is a personal preference of course. Maybe you believe in giving back the first portion of your income, or helping those less fortunate. Generous givers are happy and suffer less depression. Many experience great financial success. Some believe giving is good karma and will come back to bless you. Whatever your reason, budget how much you’d like to give. Even small amounts count.

Saving for a rainy day is more than just an old-fashioned cliché. Unexpected emergencies will crop up. Make sure they don’t throw you into an emotional and financial tailspin by bulking up your savings account. Creating a savings safety net takes discipline, but is better than the alternatives. Stop the spiral of credit card usage and debt and start putting money aside for YOU.

No matter how tight money is, save at least $1 monthly. Work up to $5, then $25, and eventually target 10% of your income. Don’t worry about budgeting for retirement savings quite yet. Master your basic budget and emergency savings account first and leave that for another day.

Bills and necessities are, well, necessary. Paying them on-time will avoid late fees, keep your credit score clean, and decrease stress. When the money for basics is there when you need it, you can breathe a sigh of relief.

Spending money. Smart budgeters include some FUN in their budget! Did you think this was all about paying boring bills and saving every dime? Nope. Create your guilt free money zone by setting aside at least a little money for you. Enjoy spending it on whatever you wish, completely guilt free!

Financial budgets are a bit like eating a healthy diet. If you don’t include a few treats now and then, it’s unlikely you’ll stick with them in the long run. You work hard for your money, enjoy a little.

5. Scope for savings

Now that your budget is laid out beautifully on paper (or screen), take a look at your bills and scope for places you may be able to save money. When’s the last time you got a quote on your insurance costs? Do you still need those magazine subscriptions? Can you swap out cable TV for an Internet-based provider? Lower your cell phone bill?

Pick one or two bills to assess and spend the time to shop around. The money you’ll save is money you can, well, save in your emergency fund.

6. Use cash or visual aids

Ever heard that those who pay with cash spend less? It’s totally true. Financial experts recommend a “cash-only diet to clients who need to rein in their spending.” Try using cash only (no cards) for 30 days and you’ll be amazed at the control you regain over your money.

Using cash is a sure-fire way to stick to your budget, especially for things like food and entertainment. If money is incredibly tight or you are laser-focused on achieving your financial goals, stick with cash.

Ready to resurrect your debit card? Try sticking Monopoly money in your wallet along with your debit card to remind you to watch your spending and stick within your budget goals. You could even “count out” the budgeted amount you plan to spend on groceries, entertainment, or other categories in faux money. As you use your debit card, subtract the same amount of pretend money from your stash to easily keep track of how much you have left to spend.

Celebrate the new financial you

If you followed the steps above, congratulations! You are on your way to a happier, healthier financial you. Keep things simple and stick to your plan. Knowing your numbers and making strides towards your goals is cause for celebration! Make sure you include some fun money, and celebrate milestones like sticking to your budget for a week, paying in cash, and having money on hand for next month’s birthday party.

If you’re still feeling lost or overwhelmed, get some help. Have a trusted friend or family member support you to create and stick to your budget. Or hire a financial coach to guide you along the way. Following a budget is worth it. It will ease your financial strain and help you get a better night’s rest — money worry free.

About the author: Selene Nelson is an article writing, novel reading, happily married mama living in sunny Arizona. With over 20 years experience in business and financial services, she thrives on helping clients achieve their goals and is available for hire here.

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