|By Sarah Carlson, CFP®, CLU®, ChFC®|
Do you ever lie awake at night worrying about money? If so, you're not alone. A recent study found that money is the top source of stress for Americans, with 72% of respondents saying they worry about it on a regular basis. This type of stress is bad for our mental and physical health. With the holidays around the corner, it can also lead to unhealthy money habits.
In order to help you get a handle on your finances and start taking control of your financial future, we've put together a list of the top 5 worries about money and how to fix them.
1. Worrying That You'll Never Have Enough Money
If you're constantly worrying that you'll never have enough money, it's time to take a step back and reassess your spending habits. Track where you are spending your money for one month and see where you can cut back. You may be surprised how much money you are wasting on unnecessary things.
Once you have a better idea of where your money is going, start setting aside some money each month into a savings account. This will help you build up a cushion so that you don't have to live paycheck-to-paycheck.
2. Worrying about Not Being Able to Retire
If you're worried about not being able to retire, there are a few things you can do to ease your mind. First, make sure you are contributing to a 401k or IRA account. If your employer offers matching contributions, make sure you are contributing enough to get the full match. This is free money that can go towards your retirement.
Secondly, create a budget and stick to it. Make sure you are putting away enough money each month to cover your basic living expenses as well as saving for retirement. If you have debt, focus on paying that off as quickly as possible so that you can reduce your monthly expenses. As a team of Spokane Financial Advisors, we help our clients stay on course with their retirement plan.
3. Worrying about an Unexpected Expense
Unexpected expenses happen to everyone at some point or another. But if you're always worrying about them, it's time to create an emergency fund. An emergency fund is simply a savings account that you only use in case of an emergency, like a car repair or medical bill. It's important to save up enough money to cover at least 3-6 months of living expenses in case of job loss or other unforeseen circumstances.
4. Worrying about Outliving Your Savings
This is a common worry among retirees or soon-to-be retirees. One way to ease this worry is by purchasing annuities or long-term care insurance policies. Annuities provide a stream of income that can last for the rest of your life, no matter how long you live. Long-term care insurance helps cover the cost of nursing home care or in-home care if you become disabled and are unable to take care of yourself.
Purchasing one or both of these types of insurance policies can help give you confidence in knowing that your finances will be taken care of no matter what happens in the future.
5. Worrying about Being Unable to Afford Healthcare
Healthcare costs can be expensive, especially if you don't have health insurance through an employer. One way to reduce this worry is by signing up for a health insurance marketplace plan through the Affordable Care Act (ACA). ACA plans offer subsidies based on income so that health insurance is more affordable for lower-income individuals and families.
Another option is short-term health insurance, which is designed for people who are between jobs or waiting for ACA coverage to begin. Short-term health insurance plans are typically more affordable than ACA plans but do not cover pre-existing conditions.
Money stress can be debilitating, leading us to make poor financial decisions and preventing us from achieving our long-term financial goals. But it doesn't have to be this way! By getting rid of our worries about money, we can take control of our finances and start working towards a bright future. So take a deep breath, relax, and think positive thoughts! You got this!
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