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How To Deal With Money Stress

How To Deal With Money Stress

Back in 2009, at the peak of the debt crisis, a friend went through bankruptcy. His small off-license News shop closed within a matter of months. The bank got the verdict from the court ordering him to pay $1 a month.

Apart from the usual stress of dealing with bankruptcy, he went through the stress of managing his finances post-bankruptcy. It was tough for him to do it – to find new work and restart everything. Fortunately, he did it. Currently, he is running a small business, however; bankruptcy is still on his records.

Bankruptcy is a major event in anyone’s life and surely it creates stress – a lot of stress to deal with new realities appearing after declaring yourself bankrupt. However, managing money and finances in our daily life can also be the cause of stress. Money stress is a reality and the cause of major stress for most of Americans.

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There can be many reasons for this stress – not earning enough, spending more than what we earn, carrying a large amount of debt (even private small business loans taken in the shape of MCA or investor loans which are generally given on soft terms to small business owners) trigger stress.

Coping with money stress

If you are facing such a situation or someone you know is going through this, it is time to look inside and become more aware of what coping mechanisms you can develop and follow to deal with money stress.

Part of it is related to our emotional style and DNA and part of it are simply developing a system which can boost willpower and motivation to feel positive when faced with making difficult money choices.

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Here are three simple routines which can help you to cope with money stress:

1. Morning routines

I’m not a night owl! I get up around 4 am, and till 7 am I use the time as my own sacred time to contemplate, plan, review and learn new things.

If you can afford to get up at least 1 hour before your usual time, I suggest you to use that time bucket for making your money decisions for the day. Our willpower decreases as the day passes and with more to deal with during day time, it is better to make most important decisions concerning money first thing in the morning.

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Let’s say, you are planning to buy groceries today or want to order pizza later that night, it is better to decide the same in morning. It will cause less stress to make this decision early in the day.

Making monthly budgets, recording your daily expenses, checking and tallying your bank statements and even reading your credit card bills first in the morning can easily offer you an opportunity to think in a clearer manner and develop strategies to deal with various aspects of your money. To deal effectively with money stress, develop morning routines and make your important financial decisions early in the day.

2. Be a stress stopper

Another reason money creates stress in our life is because we argue about it. If you and your partnrt are both earning and have divided expenses, arguments are sure to follow. If your spouse is paying the mortgage and he or she missed a payment or two without informing you, most probably, you will end up with a heated argument.

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When faced with such a situation, you can decide who is going to back out from the argument. Carefully discuss with your spouse that if any such situation arises, either you or they have to act as a stress stopper. Or if your kids are old enough, you can ask them to interrupt and intervene. The purpose is to break the chain and stop you from stressing yourself more.

3. Meditate

If you feel that your inability to deal with money is causing you stress and putting your relationships at risk, you should give a try to meditation.

Meditation is a medically proven way of dealing with stress and if you can simply build the routine of even doing a 5 minute meditation twice a day, your ability to deal with money stress can significantly increase. By simply closing your eyes and watching your breath, you can calm your nerves and are fully aware of what to do when faced with tough money choices.

What is more important is how you build small systems and routines to follow to deal with money stress. Early morning meditation, planning for the day and developing a relationship of trust with your family or significant other can greatly reduce money stress.

Featured photo credit: American Herald via americaherald.com

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Adnan Manzoor

Data Analyst & Life Coach

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Last Updated on March 4, 2019

How to Use Credit Cards While Staying Out of Debt

How to Use Credit Cards While Staying Out of Debt

Many people will suggest that the best thing to do with your credit cards during these tough economic times is to cut them up with a pair of scissors. Indeed, if you are already in huge debt, you probably should stop using them and begin a payback strategy immediately. However, if you are not currently in trouble with your credit cards, there are wise ways to use them.

I happen to really love my credit cards so I will share with you my approach to how I use mine without getting into deep financial trouble.

Ever since about 1983 when I got my first Visa card, I continue to charge as many of my purchases as possible on credit. Everything from gas, groceries and monthly payments for services like my cable and home security monitoring are charged on credit. Despite my heavy usage, I have maintained the joy of never paying any interest fees at all on any of my credit cards.

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Here are some tips on how best to use your credit cards without falling into the trap of paying those nasty double-digit interest fees.

Do Not Treat Credit Cards as Your Funding Sources

Too many people treat their credit cards as funding sources for major purchases. Do not do this if you want to stay out of trouble. I use my credit cards as convenient financial instruments so I do not have to carry around much cash. In fact, I hate carrying cash, especially coins. When you buy things on credit, the purchases are clean and you will not get annoying coins back as change.

I do not rely on my Visa, MasterCard or American Express to fund any of my purchases, large or small. This brings me to my golden rule when it comes to whether I will pull out any of my credit cards either at a retail or online store.

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I never purchase anything with my credit cards if I do not have the actual cash on hand in my bank account.

If I really cannot pay for the item or service with cash that I already have at the bank, then I simply will not make the purchase. Remember, my credit cards are not used as funding sources. They are just convenient alternatives to actual cash in my pocket.

Make Sure to Always Pay Off Balances in Full Each Month

The next very important part of my overall strategy is to make absolutely sure that I pay the balances in full each and every month no matter how large they are. This should never be a problem if the cash has been budgeted for my purchases and secured in the bank. I have always paid my full balances each month ever since my very first credit card and this is why I never pay interest charges.

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Using Credit Cards with Rewards

Most of my credit cards are of the “no annual fees” type, including one MasterCard on a separate account I keep at home as a spare in case I lose my wallet or incur any fraudulent charges. However, I do use a main Visa card which does have an annual fee because all purchases on that card reward me with airline frequent flyer points. For me, the annual fee is worth it since I do travel and I get enough points to redeem many free flights.

You have to decide for yourself if you will charge enough purchases on credit each year without paying interest charges to warrant a credit card that rewards you with airline points (or other rewards). In my case, the answer is “yes” but that might not be the case for you.

I occasionally use a MasterCard or American Express card on small purchases just to keep those accounts active. Also, I have been to the odd retailer that accepted only a certain type of credit card, so I find that having one from each major company is quite handy. Aside from my main Visa card which earns the airline points, the rest of my cards are of the “no annual fees” variety.

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So this is how I use my credit cards without getting into any financial trouble with them. This strategy is recommended only if you are not in debt, of course. In fact, it is worth keeping in mind once you’re out of debt so that you can keep your credit cards active and treat them responsibly.

What are your credit card usage strategies? Let me know in the comments — I’d love to hear what methods you use.

Featured photo credit: Artem Bali via unsplash.com

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