Money Management Causes Stress and Anxiety
Are you worried about money management? How are you spending and saving your money? Have you made wise investments? Are you protecting your money for the future, as things change in the present? Do you have a plan in place to deal with higher interest rates or inflation?
These money management questions are causing Americans stress and anxiety. Americans are more stressed about money than they’ve ever been. Eighty-seven percent of Americans said that inflation and the rising costs of everyday goods are what’s driving their stress.
Three ways to help you control your money management
Budget
Inflation is at a four-decade high, and we should all be taking stock of what we spend and how we save. In September, Moody’s Analytics analysis found Inflation is costing the average U.S. household an additional $445 per month.
As your household expenses are different from everyone else’s, get your bills and bank statements together and do a proper budget. This will give you a clear picture of what your incoming money versus outgoing expenditures is.
You must factor in everything from food and housing (whether that’s mortgage or rental) to your transport costs, education, clothing, heating etcetera. Add up everything.
Comparing your expenditures to the same time last year may not be as easy and as simple as it seems. Many were still working in different environments. The pandemic was still being dealt with, so many people didn’t take vacations or splurge on dining out or entertainment.
The idea is to calculate how inflated your costs have become over the past year. 2022 has brought higher inflation and higher costs but you need to calculate what those costs are for you.
Cut down on debt
Minimizing the debt you carry puts you in a far stronger position financially. Your financial plan should have access to some debt facility, so you can cope with sudden emergencies or occasions where a credit card is required such as traveling or hiring a car.
Keep an eye on what you are spending on that card. Set spending limits and set alerts so you’re not caught with a big bill or a large debt you are unaware of because you’re not tracking what you have charged on the card.
Keep saving and investing
For both your current goals, emergencies, and the future, it’s vital to put money away.
This is where a financial plan is a critical part of your money management. Never make rash decisions motivated by anxiety and fear. Talk to a financial advisor and put together a strategy to give you peace of mind.
“Never place your savings in risky investments,” says Scott Ente Senior Vice President of David Lerner Associates, “A sensible middle ground of Investing is the best way to minimize losses and have peace of mind. You want to keep your money as safe as possible, so get professional advice and don’t invest rashly.”
No matter what stage of life you’re in, you need to be sure that you have control of your money, or it will soon control you.
IMPORTANT DISCLOSURES
Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.
To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.
Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.
David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC