Need A Break? Here Are Tips To Reduce Financial Stress In Your Life
Jan 20, 2021
We live in uncertain times. Many people face acute financial stress that reaches extreme peaks compared to previous decades. Add in social media and large technology changes, there are a lot more problems that we face.
But you don’t need a global pandemic to trigger that financial stress.
If you’re earning minimum wage and your car breaks down, or you have to plan for a funeral, you’re going to struggle. Besides, as the world reorders itself and many professions become obsolete, many Singaporeans will lose their jobs.
But here’s the thing:
Strong people who survive are the ones who can adapt.
Read this guide below to find out more techniques to reduce the financial stress in your life and get back the reins.
1. Find A Valve For That Financial Stress
When you’re feeling stressed out, your body responds with a whoosh of cortisol and adrenaline. These hormones are helpful in the short-term, say if a mammoth is attacking you in the wilderness. They wake you up and fill you up with energy so that you can fight.
You need to understand that too much of this energy has adverse effects in the long term. You become exhausted and irritable, your sleep quality decreases, and your endocrine system gets out of whack.
After a few months of this thing, your heart health will deteriorate, and your body may start attacking itself. In recent years, there’s been an increase in the number of mental health cases mainly caused by stress.
That’s obviously not good.
Here’s what you can do:
– Try talking about your problems with a loved one or even a therapist, and they can help you see the situation for what it is. More often than none, this disabling fear you feel is a creation of your brain. Brains are fantastic movie directors – but remember, those movies you see in your head are not real.
– Try meditation. Getting yourself in the zone regulates your breath and your heart rate. Meditation helps calm you down, bringing you to a place where you can judge your problems rationally.
– Try a sport. Physical exercise helps your body consume that excess cortisol, but even better than that, regular exercising is shown to increase your emotional resilience.
After this first step, you’re ready to take charge. Here’s how to work on your financial stress by rooting out what’s causing it:
2. Share Your Financial Stress With A Partner
You may feel acute financial stress because you’re taking on much more than you can handle. Often, you’re having problems because you don’t have the tools to solve those problems.
Take this situation for instance:
You’re self-employed, and your income has been plummeting for a few months. In the hopes of getting back on track, you’re working more than ever.
As a consequence, you’re more on edge and sleeping poorly.
Here’s the solution:
Think outside of the box. Stop and ask yourself whether you have the skills to do something else. Maybe you and your partner can agree to sell your wedding suits or rent a room in your apartment.
If that doesn’t work either, consider specialised assistance. Many credit counselling agencies in Singapore will help you with reading resources and one-on-one discussions. At the end of a session, you’ll have a personalised plan to get out of the problem causing your financial stress.
3. Do Your Budget
Did you know that 41% of Singaporeans don’t have a financial plan?
Although studies show we’re extremely good at saving, planning isn’t in our DNA. Luckily, there’s never a wrong time to start.
Here are at least two advantages you haven’t considered:
Firstly, planning your budget entails some degree of foresight because you will know which expenses to look forward to. That way, you have fewer chances of an emergency taking you by surprise.
And secondly, planning will help you root out mistakes you’ve been making.
Surprise-surprise, these mistakes cause your financial stress.
– You may be spending too much on a membership that you’re no longer using. The most common being a gym membership or a country club membership.
– You’re not reimbursing a small loan with a tremendous interest rate that keeps burdening your monthly budget. For couples who are financially smart, they will refinance their home loan to lower the interest paid.
– You’re making useless purchases, such as too many handbags, shoes, or expensive clothes.
4. Set Goals, Have A Direction
Your financial stress will decrease rapidly if you have a plan and use it to attain specific goals.
For example, building an emergency or a savings account is a worthy financial goal because having this side money ensures you won’t have as many problems.
Other examples include:
– Paying off pre-existing debt
– Improving your financial education
– Working towards your financial independence
– Living better
Financial goals have a general feel to them, and, as you can see, they’re representations of your values and needs. By comparison, objectives are more specific and measurable.
Pro tip: Choose one goal per year and deconstruct it into smaller objectives to reach it faster.
For example, a strategy for working towards your financial independence can be:
– Ask for a 10% raise on Monday.
– Start looking for freelancing opportunities (e.g. tutoring, ghostwriting) on Friday.
– Increase my gains by 30%/ month by April.
– Open up a high-interest deposit account by May to deposit those gains.
– Invest 10% of my income into stocks.
– Start my own online shop by September next year.
Are you wondering why does setting goals help?
Instead of letting yourself be consumed with worry, you’re taking charge of your life. And that gives you a fantastic rush – plus much more opportunities to improve your life.
5. Repay Your Debt
Unpaid debt is a significant cause of financial stress. Debts become that rock at the back of your mind. If you can’t handle your loans anymore, here are some things that you can do.
Start repaying your debt
– Find a way to save some money each month.
– Use this money to put up more money towards your smallest loan.
– Of course, you’re going to repay the other loans’ installments diligently as well, but you’re just going to put more money towards this small loan.
– Once you’re rid of this loan, use its corresponding installment towards paying your second-smallest debt.
– Rinse and repeat until all debts are paid.
Did you know that you can always negotiate with your lenders? Circumstances may change and your lenders will be able to emphasize with you.
If you can’t repay a particular loan, be honest about it with your creditors. Chances are they’ll understand and even help you craft a better repayment scheme. Some will freeze payments towards your principal amount and allow you to pay just the interest for some time. Others will cut back on interest or even accept a smaller amount, especially if you’re on the verge of bankruptcy.
Consider a debt consolidation loan. Debt consolidation loans amass all of your loans into a single one. That decreases the pressure of several deadlines zeroing in on you and of several interests accumulating. Instead of these distinct loans, you’ll have to repay just a larger loan that’s arranged on a longer tenure and thus features lower installments.
Pro tip: Automate your expenses as much as possible.
Many people are tempted to “forget” about specific bills or postpone paying their credit card balances. This can happen to you, too, if you need emergency dental works or if you need to take a trip to unwind.
Of course, that’s a mistake.
Here’s what to do instead:
– Automate your financial life. Ensure all of your recurrent bills are on auto-pay and that part of your salary goes towards your CPF account.
– Use your emergency fund for emergencies; after all, that’s why you have it in the first place.
– Consider a loan for things you can’t afford through your emergency fund. Licensed moneylenders in Singapore have crafted unique offers for anything you need, from medical loans to renovation loans to education loans and more.
6. Eliminate Uncertainty
Once you have a budget, you can eliminate useless expenses. That means you have more money to use, yay!
However, you should use it carefully.
One celebratory night out is perfectly understandable if you’re just rid of your financial stress. However, it’s wise to prevent future stress too.
Here’s how you can do that:
– Create a savings account. It’s excellent to have a savings account if something goes completely wrong in your life, like an accident that leaves you disabled, job loss, or a pandemic. Financial experts advise Singaporeans to have at least six times their monthly salary in a savings account or 12 times that amount for self-employed people.
– Create an emergency account. Emergency accounts are different from savings accounts in that you’ll stash less money here. You won’t live off this cash, but you’re going to need it, for instance, to pay for emergency pet surgery, an expensive dental procedure, or a funeral.
– Consider passive or active investing opportunities in Singapore. For example, you can place your saved money in safe government bonds or ETFs. Alternatively, you can consider renting a room in your house.
Pro tip: Consider a personal loan to create your savings account or emergency account now.
That advice can sound slightly counterintuitive – after all, why borrow money now instead of when you actually need it?
Getting A Loan To Consolidate Debts
By the point when an emergency happens, and you’re unemployed or homeless, you may not be granted a loan at all. Alternatively, you may get a smaller loan with steeper interest rates.
Need more help getting out of the thing that’s causing financial stress?
Get a fast loan with immediate disbursement at GS Credit today. Everyone’s welcome.