Money is the root of all evil, as one of the famous sayings goes. But while there's no statistical proof to this age-old adage, there is truth to the fact that money adds stress to people's lives. Financial problems can hinder peace of mind and relaxation. It can lead to people overworking themselves to the point of burnout. And since you can't really just abandon the use of cash altogether, there must be some compromise so that you can use money as an effective tool to bettering your situation, rather than it giving you a hard time. Here's five ways on how to purge your life from the stress that's brought by personal finances:
Do Your Homework
Allotting an hour of your time every week to sit down and go over your budget can make all the difference in your net worth. Although change in personal finances don't regularly happen, expenses and lifestyle needs can change unexpectedly. Stay on top of the money that comes in and out. As a starting point, figure out your net worth, or the amount that you own minus the amount that you owe. If you have a salary of $60,000 but is paying off credit cards or student loans on the side on top of personal expenses including rent and utilities, your net worth may actually be fairly low.
Automate Savings
A lot of people fail to invest in their savings and retirement accounts due to the lack of time to march down to their nearest bank and wait in line to make a deposit. Every paycheck, set up your bank account so that it takes a portion of the amount and puts it into a savings account that's separate from your checking account. Moreover, automate monthly or biweekly contributions to your retirement accounts including 401(k)s and Roth IRAs.
Invest For the Long Term
Day trading can be lucrative, but it's also very stressful. Rather than day trade, create an investment portfolio that is setup to grow both in capital gains and dividend yields over time. Steer clear of bucket shop companies and penny stocks that are extremely volatile and risky. Instead, go for company stocks that are managed by a well-rounded team and are poised to increase in value over the next five to ten years.
Insure Your Most Important Assets
Identify the assets that you use on a daily basis, such as your house, car, and of course yourself. If your car breaks down or you get struck with an illness, your personal finances can be drastically affected. If your primary source of income comes from a home-based company or store, secure a small business insurance policy that covers personal injury or property damages from natural disasters or theft.
Ask Around
Many people still fail to fix their personal finance and improve their quality of life, despite their desire to do so. One culprit to this is the lack of support and guidance. While self-help guides are useful, there is no better advice to follow than the ones you get from people who've been in your shoes at one point in their lives.l Reddit and similar forums are a great online resource for personal finance advice since members are all eager to help and can give specifics, such as which states have lower property taxes, what to do against overdraft fees from your banks, how to resolve a specific loan-related dispute, what mortgages best work for your income bracket, etc. Asking family members and friends take the stress out of having to figure out the most practical decisions for your finances.
Final Thoughts
Wealth doesn't always have to come at the expense of mental stress and burnout. There are ways in which you can manage and set up your personal finances in a way that it grows with minimal to no attention needed.
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