11/7/2013 10:45 PM ET|
5 fast ways to ease money worries
If money anxiety has you losing sleep, these approaches may lower your stress in minutes and provide long-term benefits.
When you hear that you may need more than $1 million in savings to retire comfortably, or that you should have six months of living expenses as an emergency cash reserve, it's likely your financial anxieties may spike a bit -- especially if you have little savings, no retirement accounts and several thousand dollars in credit card debt.
If your money worries are already at a high level, you are not alone. According to a 2012 report from the American Psychological Association (APA), 75 percent of Americans report money as a significant source of stress.
"Don't get overwhelmed and do nothing but worry," says certified public accountant and former IRS tax attorney, Sandy Botkin, author of "Achieve Financial Freedom -- Big Time!"
Instead, Botkin says to simply get started. "Take financial action today," he says. "Sometimes, all it takes is a few minutes."
Below are five of his suggestions on how you can reduce money worries, starting today:
No. 1: Track your spending
"You can't save money if you don't know where you are spending it," cautions Botkin. But, in about 20 minutes, you can set up a free online budget tracking service.
Once you see how and where you are spending your money, decide which expenses are absolutely necessary (needs) and which are not (wants) -- a very important distinction, says Botkin. Choose the expenses most important to you and make a conscious decision today to cut the rest.
"You really can have anything you want -- just not all at once," says Botkin.
No. 2: Start the saving process via automatic transfers
If you live paycheck to paycheck and have little or no cash savings, start building a cash emergency fund to protect you from turning to credit cards or payday loans when unforeseen payments, bills or emergencies hit, says Botkin.
Saving money takes willpower. Another 2012 APA study found that while financial resolutions were second only to weight-loss goals among Americans, lack of willpower was one of the major barriers to achieving those goals.
Botkin says to avoid choice in the matter all together.
"Do what the government does with taxes and deduct your emergency cash savings from your paycheck automatically before you get it," he says. You can accomplish this today by simply changing your paycheck direct deposit deductions to funnel 5 percent to 10 percent of every paycheck into a savings account for emergencies.
To get the most from your fund, you'll want find the best savings account interest rates available, but Botkin says the most important thing is to simply park your emergency cash in any FDIC-insured savings, checking or money market account that offers immediate access when you need it.
No. 3: Plan an attack on debt
If you are ready to get rid of credit card debt, spend an hour collecting your credit card statements today and create what Botkin calls, "The Matrix of Debt," a simple chart that lays out your debt repayment plan:
- List your creditors from smallest to largest total amount of debt.
- Next to each, list the total amount due, the interest rate, the minimum payment and the duration to satisfy each debt.
- Start paying more toward the smallest debt first by applying any savings (found by tracking your expenses, above) plus the minimum payment every month until satisfied. Keep paying minimums on all other debts.
- Once a debt is paid off, apply that monthly savings amount -- which should be larger in the absence of the minimum payment from the first debt -- to the next smallest debt's minimum payment.
This approach is designed to shrink the number of monthly minimum payments you need to make and reap the psychological benefits of reducing the number of debts you face. While it takes commitment and a butcher-knife approach to cutting expenses to free up the money necessary to pay debt, when used properly, it can yield progress in a hurry. Also be sure to set up due date payment alerts so you never suffer setbacks from late fees.
More from SavingAccounts.com:
VIDEO ON MSN MONEY
If you really need MSN to tell you this, then you probably aren't going to make it to home plate on time.
Is there a patron saint of lost causes?
This country is getting way too complicated. Something is gonna getcha, or probably multiple things.
In consideration of minimum wage, the real consensus is not a vote by the parliamentary lordship, of our senate and house. It should be a ballot box vote of constituent Americans. Who in their right mind would amplify wages in productive increments of a mere $10 bucks an hour? This would give the opportunity of a high school student, the access to a cell phone and clunker automobile at the rate (before taxes) of a measly $400.00 dollars a week, living with care-givers till 26 years of age. I can tell you a way to parlay this ridiculous pittance into more opportunities in just a few weeks. First: you work the initial week with no pay and do not borrow. Second: you work week two, with your first paycheck and save thee entire amount, no partying or dating or goodies. Starting week three, if work don't meet your job description you could quit with two paychecks, but the amount is inferior to applications needed, so try to work three weeks, and "take this job and shove it." You then set yourself on course to buying a new computer, then add software to your liking and purchase a web site. It will take some minor jockeying for audio and video, but as found on "wordpress" and "arial sound recorder" and "Photo Story 3" your not only in business on a safe non-downloading web site, you can sell audio show CD's and video DVD's on "Create Space" a division of Amazon, then your earning a proper income. What minimum wage would you vote for? Welcome to the "great escape."
( I thought you would be interested in this story I found on news.msn.com: Obama pays tribute to 107-year-old veteran ( , )
If we are going to respect all veterans? Then when are their “homesteads” going to be historic homes, an honor we have only given to near 240 year old houses of the Revolutionary War heroes. Couldn’t we at least up the anti to the Civil War veterans, and improve the value, in history and currency for these near 160 year old antiquities. And speaking of WWI. antique increments start at 100 years of age! Has anyone told our veterans, that their real estate is costlier than average homes in the same neighborhood. Which makes the stake claim of all veterans homes (like famous people) of a superior cost and museum-type, aspect of history to be preserved.
Then let us reveal this to all veterans, that the sale of the home include intrinsic value, that’s if the sale is made at all. Let us preserve of honored veterans historic property, not just with homespun flags, but bronze plaques to cherish for American antiquity.
This is not a reprimand, but a blessed thought, out of loving kindness, with due honor and without thieves.
I don't understand, this gives conflicting information.
First it says to track your spending, then it says to use automatic transfers. If you are doing it automatically, are you really going to keep track of it?
I would highly recommend that one always be consciously aware of what they are doing, how they are doing it, and more importantly, why they are doing it. You can't trust that these automated processes will always work right. Not only that, but the cost in monetary terms for automation can be high too, and many times one is charged for doing so.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
RECENT ARTICLES ON PERSONAL FINANCE
Your health may improve if you cut gluten out of your diet, but your pocketbook will take a hit -- unless you follow these tips.