The five rules to be stress-free with your money

It should come as no surprise that money and stress are often interlinked.

A 2017 study by ASIC found more than a third of respondents agreed that “dealing with money is stressful and overwhelming”. But this doesn’t have to be the case.

There are many ways you can come to grips with your finances and these five rules you can help you build a solid financial future.

Spend less than you earn

You’ll always be under pressure if you’re spending more than you earn, this road leads to debt, which leads to interest and ultimately, more debt.

As far as principles for de-stressing go, this is definitely the most important. So how much do you spend?

Most people know what they earn but until you sit down and write up a budget you’ll never have a concrete understanding of where your money is going.

Once you know what’s coming in and what’s going out, what do you do if you are spendingmore than you earn? Put simply, you either spend less or earn more.

Spending less is about looking through your budget and finding those discretionary items that you can do without.

It can also be looking at your debts and bills and looking for better deals.

Earning more can come from increasing your skill set or education to get a better-paying job, or starting a second job on the side.

Be open about your goals

When we talk about financial stress, there’s more to it than just money.

When you combine your finances with a partner you open a whole new can of worms.

If you’re trying to save for the future and your partner is off buying gadgets or expensive clothing, then this mismatch is sure to create tension.

The best way to avoid this is to have an honest and frank discussion with your partner about your financial goals.

Sit down and outline both of your big financial goals, then work out how you can achieve them together.

That’s not to say you have to stop your partner’s spending.

If shopping is important to you or your partner, then consider allocating each of you a spending account.Put aside a set amount each pay that you can spend however you like.

Not only will this make you feel happier, it’ll be much easier to factor your spending into a budget and make sure you’re achieving the first rule, spend less than you earn.

Kill your impulses

Many a budget has been blown due to impulse purchases. It’s easy to get caught up in theemotions of buying, that’s what a lot of marketing relies on.

Grabbing that perfect $40 shirt might not bust the bank, but what about that shiny new iPhone? You need to draw the line somewhere.

Implement a 24-hour rule to bring these impulses under control.

For purchases over a set amount, say $100, force yourself to wait 24 hours before purchasing.

If at the end of this period you’re still obsessed with buying it, then make it happen.

But use that time to consider whether it’s actually something you need and to shop around.

Not only will this cut down on impulse purchases, you might also save some cash by finding it cheaper elsewhere.

Start saving

Once you’re in a position where you spend less than you earn, what do you do with the surplus?

First off, you’ll want to start building an emergency fund. Putting some money aside for a rainy day is a little like your car insurance.

You don’t ever plan on needing it, but when something happens you’ll be glad you’ve got it.

A great rule of thumb for an emergency fund is being able to cover at least three months’ earnings.

This will cover most surprise expenses without derailing your finances.

And as long as this money is easily accessible, you can use whatever savings vehicle you’re most comfortable with.

Plan for the future

With all the above in place, you’ll be in a great financial position for the time being.

The final step towards stress-free finances is to consider what happens when you stop working.

Retirement may be a long way away, but the earlier you start to save for it, the less stressfulit becomes.

By taking advantage of superannuation rules and incentives, every dollar you put aside now can be worth a lot more when you retire.

Take these five rules to heart and start feeling comfortable about your finances. They’re simple and achievable, so there’s nothing stopping you from beginning today.

And if it all starts to feel a little difficult, remember there’s plenty of professionals out there willing to give you the help you need to succeed.

Olivia Maragna is the co-founder of Aspire Retire Financial Services and is a respected and independent financial expert. Olivia’s advice is general in nature and readers should seek their own professional advice before making any financial decisions.

You can follow Olivia on Facebook or Twitter at https://twitter苏州美甲学校/oliviamaragna

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