Financing is providing funds for business activities, making purchases, or investing. Financial institutions, such as banks, provide capital to businesses, consumers, and investors to help them achieve their goals. The use of financing is vital in any economic system, as it allows companies to purchase products out of their immediate reach. Put differently, and financing is a way to leverage the time value of money (TVM) to put future expected money flows to use for projects started today. Financing also takes advantage of the fact that some individuals in an economy will have a surplus of money they wish to put to work to generate returns. In contrast, others demand money to undertake investment, creating a money market.
Ways to manage financial issues
While much of what causes financial stress can be attributed to external factors, there are ways you can mitigate it and take steps to improve your financial security. Here are a few ways to help you manage financial stress during trying times.
. Track your money-saving progress
You won’t know if you’re making progress if you don’t track it. Make sure you know where you stand. Tracking your progress lets you know whether your actions are moving the needle. It also helps to know your progress because when you progress toward your financial goals, like paying off debt, the positive psychological effects can lift your mood and health. If you aren’t tracking your financial goals, you may not realize how much progress you’re making.
. Talk to your lenders
Debt can be both a financial and mental burden. Before you let debt and the stress it causes overwhelm you, talk to your lenders. The lender may be willing to modify the loan, such as extending its term or lowering the interest rate, to reduce your monthly payments. You could also try refinancing.
Consult with financial professionals
Consider talking to a financial advisor to help take some of the weight off your shoulders regarding things like setting goals, saving money, and decreasing debt. Since the COVID-19 pandemic, many services have migrated online, including several in financial services.
. Prioritize what you can control
You can’t change everything that is causing you stress. Some things are simply out of your control. If you dwell on things you can’t control, it’s likely to cause you even more stress as you get frustrated with being unable to change them. Focus instead on the things that you can control so that you can work to improve your situation. For an easy example, consider something simple, like your food budget. Unless you are already on a bare-minimum food budget, look for ways to shave a few dollars off your grocery bill, like going with the cheaper store-brand items. You’ll save money, and the feeling of accomplishment and being in control may also help reduce your stress.
. Find ways to earn more money
You can only cut a budget so far, and you’ll want to be careful that your tight budget isn’t a source of additional stress. With the price of consumer goods being higher than normal, line items in your budget are likely already under strain. It might be worth looking for ways to increase your income instead. Some ways to do so include:
Work a few extra hours: Try talking to your employer about spending extra time each week if you’re paid hourly or at least eligible for overtime pay.
. Pay essential bills
If you are worried about being able to pay all your bills, prioritize essential bills first. Sorting through your bills and prioritizing them serves two purposes:
. As a budgeting exercise, it guides you to deliberately think through what you spend your money on. . You may find that some bills can be eliminated or reduced.
By knowing beforehand which bills you will pay first, you won’t have to scramble to decide if you do find yourself in a bind later.
Both of these outcomes will help reduce your financial anxiety and hopefully allow you to sleep better.
Conclusion
Financial stress and anxiety are common, especially when the world seems pitted against you. Though it will take a little effort, there are ways you can curb financial worries and stay ahead of expenses, whether it be writing out a budget for your bills or tracking savings progress. Also, don’t be afraid to reach out to a financial advisor or a trusted friend or relative for advice.
When it comes to saving, a money-saving new saving app or look into what savings features your bank’s app might come with.
