Some degree of stress in life is normal and actually healthy, as it keeps us on our toes.
But too much stress can damage both your health and relationships.
There are though some simple steps to take to remove stress from your financial life.
These simple ways to remove stress from your financial life need not cost much money or take much time.
1 – Sort out your paperwork.
Take your financial paperwork out of the envelopes they came in or the plastic bags from under your coffee table.
Get rid of the stuff that you really don’t need to keep, such as marketing brochures and policy valuations from 2003.
Keep the certificates and documents that are valuable and securely shred the rest.
Work on the basis that if you have a letter or report the person who sent it to you has a copy as well and can always provide a copy to you if you need it.
Tidying up your records like this helps you to feel more in control.
2 – Work out a budget based on how much committed spend you have and compare that with your net income.
This will help you to identify how much discretionary spend you have available.
Budgeting like this will also help you to protect yourself against overspending.
Keep records of what you spend your money on and work out if there are things that you can do to save money. Buy a flask and take coffee to work thus saving a fortune on the stuff you buy in paper cups from the High Street.
3 – Calculate your net wealth figure.
Add up the value of any savings, investments and pension funds that you have as well as the current value of your property. Deduct the value of any outstanding debt.
Hey presto, that’s your net worth position.
If this is a negative figure because of debt start working out how much you can afford to spend to reduce your debt.
£2.50 per day saved on a cup of High Street coffee x 48 weeks x 5 days = £600. You could pay off that credit card in a year.
Don’t even get me started on the amount you could save if you gave up smoking!
4 – If you have a partner or spouse and particularly so if you have children MAKE A WILL.
Do it now go and see a Solicitor.
You are a grown up for goodness sake, you know you need to do this so stop messing around and get it done!!
5 – Work out how much retirement income you are likely to achieve.
Chances are it won’t be enough for you to have the lifestyle you want or enable you to retire when you want to, so the next step will be to work out how much more you need to save.
Retirement income is simply deferred pay; putting aside some pay today so that you can have an income later on.
I have never met someone with too much retirement income.
Most financial stress is created by ignoring a situation until it blows up in our face.
Stress is removed when we feel more in control of our personal finances.
