Thought Process Series: Managing Financial Stress

May 19, 2020

Thought Process Series: Managing Financial Stress

Sometimes when we are feeling financial pressure, it seems easier ignore the problem and hope that it goes away.  If we are perhaps not watching spending as closely as maybe we should, has lead to accumulating credit card debt, I feel the best solution is to step back and do something about it.  Paying back amounts with interest does not feel good, but it is necessary to put yourself back on the right track.

Building a budget can be simple, sticking to it…now that’s where the rubber meets the road.  The first step to managing financial pressure is often acknowledging the problem and committing to do doing something about it. 

Here are a few steps to get you started:

  • Gather the data – how much debt do you have, what are the interest rates, how much are the minimum payments, figure out how much you bring home each month and what your required bills/obligations are.
  • Prioritize – if you are tackling debt, sometimes taking care of quick, small obligations can be a great start to lighten the load. Also consider that a potential balance transfer to a 0% promotion if you can commit to paying the debt off in the specified term before interest will apply. 
  • Schedule it out – give yourself a light at the end of the tunnel. Whether you are using an online amortization schedule or another resource, consider snowballing debt payments (when you pay off one debt, apply that payment amount to the next obligation).  Figuring out how long it will take you to pay off obligations X, Y, and Z can give you a goal to focus on.
  • Find an Advisor or another accountability partner – having someone to hold you accountable month by month or quarter by quarter can be instrumental in keeping you on track. Food for thought, your accountability partner might need to be someone who can give you tough love, who won’t just pass off missing a goal. 

Food for Thought:

Financial stressors typically do not accumulate overnight, and the solution is typically not a quick fix.  The most important step you can take is getting started and tackling things step by step.

 

This is meant for educational purposes only.  It should not be considered investment advice, nor does it constitute a recommendation to take a particular course of action. Please consult with a financial professional regarding your personal situation prior to making any financial related decisions. (05/20)