Money can’t buy happiness, but being poor isn’t any fun either. Short of marrying a millionaire or winning the lottery, here are five ways to help eliminate money anxiety and enjoy life.
1. Set a budget
Hey big spenders – there’s no simpler cure for money worries than living within your means. The easiest way to identify if you’re spending more (or hopefully less) than you’re earning, is by taking the time to track your money and making a budget.
Australians who regularly save are reportedly almost twice as happy as non-savers, with those living within their means more likely to feel that their life has a purpose and be excited about the future.
People who set goals, such as saving for a car or a home deposit, are more likely to feel in control and achieve them, according to Timothy Sharp, founder of the Happiness Institute. Don’t forget to reward yourself for achieving your savings goals too.
2. Stash away some savings
After you’ve set that budget, hopefully you will have found some ways to start saving, whether it’s cycling or walking to work, eating out less, or refinancing your home loan at a cheaper rate. Experts recommend having three to six months’ worth of living expenses stashed in an emergency fund for a rainy day, to cover essential costs such as the mortgage or rent while you get back on your feet.
Examine all your spending in a single month and eliminate anything discretionary that you don’t particularly enjoy, such as those magazine subscriptions you rarely read or pay-TV channels you never watch. You might be surprised by how much you can save.
3. Slash costly debt
Good debt helps grow your wealth, such as borrowing to buy a house or other assets such as shares. However, bad debt accumulated on consumption can quickly add up, particularly if you are a frequent credit card user.
If your credit card bills are getting out of hand, consider refinancing your mortgage or transferring your credit balance to a lower-rate card, perhaps one with an interest free period. While attacking higher-rate debt first is sensible, for those with multiple cards, the “snowball” strategy may pay off. This means paying off the credit card with the lowest balance first, then applying the savings to the next smallest balance and so on, until your extra money snowballs and overpowers the last credit card. This gives the psychological advantage of small wins leading to big gains.
4. Get physical
Massage, meditation and yoga can help you de-stress from money worries, with some business people even turning to hypnosis to cure “money anxiety disorder,” or MAD. Another method is knitting, which according to a US medical institute, can elicit a meditation-like state that slows the heart rate and reduces blood pressure.
Exercise will help you focus more clearly on your financial issues, too. According to a study by the University of British Columbia, regular aerobic exercise which gets your heart and sweat glands pumping, aids the brain area involved in verbal memory and learning.
5. Protect your income
Income protection insurance is important if you are the family breadwinner, as this insurance can help replace income lost through an inability to work due to injury or sickness and is especially important for self-employed people, small business owners or other professionals. It can be more affordable that you think, given the premiums are usually tax-deductible.
Your income is your biggest asset and having this protection should help you sleep easier at night without having to worry about sudden misfortune threatening your financial security.
Not everyone can be a billionaire, but by taking these simple steps you will be well advanced towards defeating any money anxiety.